The state puts interests of banking system over interests of citizens

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- The Constitution Court announced its decision on dollar credits and И unambiguously backed banks, not recipients. Why has the state sided with banks, not ordinary citizens? What is a state"s purpose?

- The state has always put interests of the banking system, exactly the banking system, not separate banks, over interests of citizens. The reason is obvious: the banking system is money, i.e. "blood" for country"s economy, and it has to be guarded. It could not have been otherwise in the capitalst society. It is not then surprising that the state in the person of the Constitutional Court has sided with banks. Unsurprising is also a legally ridiculous substantiation of the decision: allegedly a sharp devaluation is not unsurprising and everybody waited for it to happen. In the meanwhile, if the court turned to the theory of law and foreign expertience, it would accept a well-grounded decision. However, all those familiar with the level of legal law, legal education and competence of most judges in our country would not be surprised with such a decision. That"s all they got!

It is regretful that interests of the state and country"s economy are misunderstood. The banking system is a trust-based institution. У нас и без того подорвано доверие к банковской системе. Unilateral decisions are destroying bygone remains of trust. The population and entrepreneurs begin regarding banks as their enemies. The decision was expected to be in the nature of compromise, at least, towards citizens. Besides, it is interesting why has the issue been raised today and considered secretly at CC Plenum?.

Should he fail to make his statement a month ago, the public would be unaware that the court has been cosidering the case since June this year. In this connection he appealed to the Association of Banks only to deliver its opinion. An impression is that the case had intentionally been left to the Constitutional Court to thus frighten banks, and as soon as the desired result had been effected, the question was settled in favor of banks. In the meantime, a compromise decision could have resulted in the credit reimbursement and finally to the decrease of distressed debt.

At present, borrowers regard the situation as unfair, so they decline from repaying debts. To compare: a few years ago the banks of Spain miscalculated mortgage credit interests. The European Court on Human Rights decided the dispute in favor of borrowers, so the Spanish banks have lost billions of eurocurrency. As a result, not only did the justice triumphed but the banking system of Spain came out of crisis as well and credits repaid. However, our financial authorities are greedy and cannot make it out that the crisis is increasingly intensifying.

- What do you think, will not such a decision undermine a faith in humans and bank investors?

It will, not only banks but justice and court system of the country as well. Note that the situation in the country is very bad around protection of proprietary rights, contracts execution and healthy competition. The reason is the lack of independent, fair and competent court system.

Any trust is out of question because even the Constitutional Court adopts unfair and ignorant decision in such a sensitive and absolutely clear (if not essential alterations of conditions, why is a sharp decision! It is essential to comply with rules of the game It should be noted that the economic development is based on compliance with rules of the game. We face here with ultimate fighting.

- The law in Azerbaijan prohibits to carry on purchase/sale transactions in foreign currency. Why do banks grant credits in dollars, pounds, euro, etc.? Why should not they credit money in manat by current rate in line with existing rules?

- At present, banks lend no credits to the population in foreign currency. From mid-2016 on, the Chamber for financial market control allows credits in foreign currency to physical entities having incomes or deposits in foreign currency. The approach is correct.

However, that does not extend to credits drawn in the previous years. In May 2015, the Constitutional Court legitimized credits in foreign currency even despite the fact that the Constitution and the Civil Code prohibits this. As for transformation of existing credits into manat at the current existing rate, it should be noted that some banks have done it.

However, most credits remain to be in foreign currency, so it is regretful that no appropriate decision has so far been adopted. As a whole, it"d be well if losses from difference in rates after the devaluation would be equally shared between banks, borrowers and the state.

- It is for the second time that the Constitutional Court makes such a decision. Are there other ways to alter the situation and resolutions earlier adopted? Where should borrowers look for justice?

- Most probably, the decision is final and no issue would be followed up. True, the last decision will indirectly enable borrowers to sue the Central Bank: the Constitutional Court substantiated its stand on the issue by the fact that it is the CB responsibility to establish the raste of national currency, so all parties concerned could face it up any moment.

It is well remembered that in February 2015, a few days before the devaluation Elman Rustamov made a statement that no devaluation would take place. Theoretically, borrowers may demand compensation from the Central Bank for losses they incurred due to false information. As a whole, our citizens should struggle for the right of physical persons to file for bankruptcy: at least, half of debtors are actually insolvent.

As a matter of fact, the law warrants but our laws disclaim it. A couple of months ago I filed a complaint to the Constitutional Court but no reply has come so far. In general, no bankruptcy institution works in our country not only in respect of physical but legal enttities as well. With some exceptions, the reason remains unknown.

Ruling in Azerbaijan is a principle typical for barbarian societies "due but repay". Nobody is interested in availibility or lack of debtor"s property. Even debtors unable to pay debts are arrested while it is contrary to international agreements with our country as a party thereto. In this connection I filed three appeals to the European Court on Human Rights, and presently the communication process is underway.

Hopefully, the European Court is expec ted to pass a positive decision on the matter, and our people will get rid of this misfortune. For some time past the law-enforcement bodies are seriously pressuring entrepreneurs even without court decisions. That"s why borrowers should display strong-mindedness and adjudicate their rights. At the same time, debtors-fraudsters must be unmasked and punisdhed. Note that they are unable to cheat without bank employees. Hence, both bank employees granting bad loans and debtors-fraudsters must hold liable for delinquencies.

- At first sight, the fortunes look up in favor of banks but, on the other hand, the number of distressed loans may grow as well which is not lucrative for banks. Is it possible to come to common decision acceptable both for banks and citizens?

- Naturally, it is a serious problem for banks. As a common decision, it"d be expedient to distrubute losses from difference in exchange between three parties: state, bank and borrower. To avoid unnecessary costs, the state shows no interest in it. Some banks transmit credits into manats by preferential rate but this practice is notspread widely. As a consequence, our stingy bankers are headed for a sorry plight. This notwithstanding, they are in blatant disregard of it

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- How are matters of this sort regulated in other countries? What does the foreign experience say about it? What method is to be chosen for getting out of the situation?

- There is second to none country worldwide where banks are granting similar credits in foreign currency. This is undoubtedly Central Bank"s fault. Should it had franted cheap credits to our banks in national currency, they would not have obtained credits in foreign currency from abroad to distrubute them across the country. In other words, they would have grant credits in national currency.

There is an incomplete similarity in Russia, Kazakhstan, Ukraine and other countries where banks made serious concessions on the subject, and as a result the problem aggravated on such a large scale. As a whole, terms of the contract are revised frequently depending on alterations in the economic situation.

A closer look at the German legal system reveals that in the course of the 20 century the courts of this country explaining sharp inflation and devaluation as being due to alterations in the economic situation, had repeatedly altered the terms of contracts to comply with interests of debtors. Unfortunately, our Constitutional Court is unaware of or does not want to know about such a practice.