The process of closure, liquidation, revocation of licenses of banks is underway not only in Azerbaijan, a similar situation is observed in many countries, Babayev said.
“New members constantly join banking market, while old participants leave it,” he noted. “A bank’s license is revoked if the bank cannot fulfill its obligations in accordance with the law or if it voluntarily leaves the market.”
“Prior to license’s revocation, a bank receives recommendations to fix flaws in its work,” Babayev added. “The closure of banks in Azerbaijan is a normal process, and it is not new. During 25 years there was a time in the history of Azerbaijan when the country had more than 200 banks.”
Licenses of 10 banks were cancelled by Azerbaijan’s Financial Market Supervisory Body during 2016.
The licenses of the banks were cancelled as their assets were not classified in line with the law, they didn’t create adequate reserves and the aggregate capital of these banks doesn’t meet the minimum requirements [50 million manats]. In general, they haven’t fulfilled the regulator’s instructions.
Thirty-three banks currently operate in Azerbaijan.
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