"Muğanbank"s licence cancelled

Baku/19.10.23/Turan: "Muğanbank"s licence has been cancelled by the decision of the Board of the Central Bank of Azerbaijan.

This was reported by the regulatory body.

The report says that this is due to the fact that the total capital of the bank is less than the minimum requirement (AZN 50 million), and its adequacy ratio is less than 3%, it does not carry out its current activities reliably and prudentially, as well as inadequate internal management and control procedures. Thus, in accordance with Articles 16.1.6, 16.1.7, 16.1.9, 16.1.18, 57 and 61.1 of the "Law on Banks", "Muğanbank"s licence was revoked, a temporary administrator was appointed to the bank and an application was filed with the court for liquidation of the credit institution through bankruptcy. All management powers of "Muğanbank", including the powers of the general meeting of the bank's shareholders, were transferred to the temporary administrator.

Note that "Muğanbank"s share in the assets of the country's banking system is 1.4%, in the loan portfolio - 2%, and in the sector's liabilities - 1.3%. The cancellation of its licence does not pose a threat to the financial soundness and financial stability of the banking sector.

Recall that "Muğanbank" is a member of the Azerbaijan Deposit Insurance Fund (ADIF), and compensation for the deposits of the population insured in this bank will be paid by the ADIF in accordance with the legislation. 

The ADIF will regulate other liabilities of the bank in accordance with the liquidation legislation established by the court. According to the reports submitted by the bank to the ADIF as of 1 October this year, the insured (compensated) deposits amount to AZN 216.7 million, and 99.9% of their depositors will receive compensation. -0-