Depositors of liquidated banks receive compensations

By Azernews

By Nigar Abbasova

Azerbaijan Deposit Insurance Fund (ADIF) continues to pay compensations to depositors of the recently closed Dekabank, Kredobank, Zaminbank and Parabank.

The Fund has so far paid compensations worth 40.4 million manats ($ 25.09 million).

The Fund has started to receive claims from insured depositors since August 1, 2016 payment of compensations started the same day. The worth of compensable deposits amounts to 110, 71 million manats. ($ 69.84 million). Payments are made in the branches of liquidated banks.

As of August 16, depositors of Parabank and Zaminbank received 16.1 million manats ($ 9.99 million) and 18 million manats ($11.1 million) out of the total compensations of 43.79 million manats ($ 27.19 million) and 36.35 million manats (($22.97 million), respectively.  The number of insured depositors in Parabank and Zaminbank is 18,097 and 10,742, respectively.

The volume of compensations paid to the depositors of Dekabank exceeded 2 million manats ($ 1.2 million) out of the payments’ total volume of 5.59 million manats ($ 3.48 million). The number of insured depositors is 133.

Depositors of Kredobank received compensations worth 4, 3 million ($2.6 million) from the total volume of compensable deposits amounting to 30.21 million manats ($ 18.8 million). As many as 4,542 depositors are insured.

The licenses of DekaBank, KredoBank, Parabank and Zaminbank were cancelled in accordance with the decision of the Financial Market Supervisory Body, dated July 21, 2016.

The insurance covers all deposits in member-banks of the Fund at an interest rate not exceeding three (for deposits in foreign currency) and 12 percent (for deposits in national currency), respectively, regardless the amount of the deposit.

The recently adopted law “On full insurance of deposits” envisages that within three years, the public deposits, with the annual interest rate not exceeding the maximum level set by the Council of Trustees of the ADIF should be insured, regardless of the amount of deposits in banks that are fund-members. 

The compensation of uninsured deposits should be paid according to the “Law on deposit insurance” should the insurance case occur in ADIF member-banks.

Banks of Azerbaijan have been hit by lower oil prices and a double devaluation of the Azerbaijani manat in 2015, which deteriorated situation in the banking sector of the country and resulted in the increase of the non-performing loans and worsened the quality of assets.

ADIF has been appointed a liquidator of four banks on July 21. The fund operates since August 13, 2007.

Currently, 33 banks have licenses for implementing banking activities in Azerbaijan.