The banking system of Azerbaijan is a two-stage banking system of the Republic of Azerbaijan , regulated by the Law on Banks. The two-stage (first stage: National Bank of the Azerbaijan Republic ; second stage - commercial and other credit institutions) banking system is based on market relations [1] .
There are two factors that to some extent affect the structure of the country's banking system:
- legal factor;
- economic factor [2] .
Central Bank
The central figure in banking (banking) of Azerbaijan is the Central Bank of the Republic of Azerbaijan , which ensures the availability of money in circulation in the country and also regulates the activities of commercial banks in the country. The Central Bank of Azerbaijan is managed by the Board of the Bank, consisting of seven members. Members of the Management Board are appointed for a period of 5 years. The Central Bank is accountable only to the President of the Republic of Azerbaijan. [3]
The activities of the Central Bank are regulated by the Constitution , the Law "On the Central Bank of the Republic of Azerbaijan", the Civil Code and other legislative acts [4] [5] .
Non-Bank Credit Organizations
The activities of non-bank credit organizations are regulated by the Constitution, the Law βOn Banksβ, the Civil Code, the laws βOn the Central Bank of the Republic of Azerbaijanβ, βOn Credit Organizations that are not Banksβ and βOn Credit Unionsβ and other legislative acts [4] .
Measures
There are also about 70 foreign and local banks in Azerbaijan. Of the four state banks, the largest is the International Bank of Azerbaijan , founded in 1992 . Among foreign banks there are Standard Bank , Unibank , DemirBank , AG Bank and others.
As part of a program to improve the banking system, in 2000 reforms were carried out with the aim of restructuring, as well as improving public banks. The number of privatized banks has risen sharply [1] .
The Baku Stock Exchange was opened in 2001 as a trading place for short-term treasury bonds and ordinary shares of privatized state-owned enterprises. The exchange has a trading room of 30 workplaces, allowing trading on securities of any kind, and also has its own depository . The 16 largest banks of Azerbaijan, two financial companies and the Istanbul Stock Exchange became the founders of the Baku Exchange .
According to the new development program, in 2002 the process of restructuring the banking system began [1] .
To achieve certain strategic goals, specific tasks were set, such as improving banking legislation and bringing it into line with international standards, improving the reliability and health of the banking system, expanding access to banking services, increasing the transparency of the banking system and strengthening market discipline, and organizing effective banking control [1] .
Due to the improvement of the banking business, Internet banking, a mobile bank, and automated banking centers that provide access to financial services at a remote level have been introduced into the banking system [1] .
At the beginning of the first decade of the 21st century, the Law on Currency Regulation was adopted, according to which the restrictions on the export of foreign currency were somewhat relaxed [6] .
In 2008, the Deposit Insurance Fund was established [1] .
In March 2014, Fitch assessed the situation in the banking sector of Azerbaijan as βgenerally stableβ [7] [8] .
In March 2016, the Law on Full Deposit Insurance entered into force, according to which all deposits of the population in banks were subject to insurance for three years [9] .
Currently, more than 45 banks, 530 bank branches, 96 non-bank credit institutions operate in the territory of the Azerbaijan Republic [1] .
Azerbaijan is a shareholder of ECOBANK [10] .
Statistics
In 2008, the populationβs deposits amounted to 1.468 billion manat, and deposits - 2 billion manat [1] .
In 2010, the number of banks' assets amounted to approximately 13290.81 million manat [4] .
In 2015, POS terminals were installed in the country [10] .
About 60.7% of the population is involved in the banking system in Azerbaijan [4] .
In 2016, 11 banks of the republic suspended their activity [9] .
According to the statistics of the Azerbaijan Financial Market Supervision Chamber , the net profit of banks in 2017 amounted to more than 479.7 million manat. [eleven]
In 2018, the number of banking assets amounted to 27,990.4 million manat. [12]
Currently, 16.389 thousand people are involved in the banking sector of the republic. [12]
Banking sector in Azerbaijan in 2005-2013
| Indicators [13] | 2005 | 2006 | 2007 | 2008 | 2009 | 2010 | 2011 | 2012 | 2013 |
| Number of financial organizations licensed to conduct banking operations | 114 | 129 | 138 | 142 | 140 | 142 | 146 | 169 | 176 |
| Number of banks - total: | 44 | 44 | 44 | 46 | 46 | 46 | 45 | 44 | 43 |
| Including: state | 2 | 2 | 2 | 2 | one | one | one | one | one |
| private | 42 | 42 | 42 | 44 | 45 | 45 | 44 | 43 | 42 |
| Number of banks with foreign capital: | 15 | 18 | 20 | 21 | 23 | 23 | 22 | 23 | 22 |
| including with authorized capital from 50% to 100% | five | five | five | 6 | 7 | 7 | 7 | 7 | 6 |
Characteristics of the banking sector of Azerbaijan in 2006-2013 \
| Indicators [13] | 2006 | 2007 | 2008 | 2009 | 2010 | 2011 | 2012 | 2013 | Growth for 2006-2013 |
| Loans | 1268.9 | 2128.6 | 4,393.9 | 6816.9 | 7963.6 | 8574.3 | 9118.4 | 10681.3 | 8.4 times |
| Assets | 2252.0 | 3778.0 | 6725.7 | 10273.5 | 11665.2 | 13,290.8 | 14205.01 | 17643.45 | 7.8 times |
| Liabilities | 1863.7 | 3174.7 | 5627.6 | 8568.8 | 9660.2 | 11121.7 | 11748.17 | 15088,13 | 8.1 times |
| Deposits | 1380.9 | 2233.1 | 3437.9 | 4055.8 | 4293.4 | 5165.3 | 6606.1 | 7710.9 | 5.6 times |
| Capital | 388.9 | 603.3 | 1098.1 | 1704.7 | 2005,0 | 2169.1 | 2456.8 | 2555.3 | 6.6 times |
Representative offices of commercial banks of the Azerbaijan Republic abroad
| Bank [2] | Subsidiary bank | Branch |
| International Bank of Azerbaijan | Russia (Moscow with branches in St. Petersburg and Yekaterinburg), Georgia (Tbilisi) | - |
| Caucasian Development Bank | - | Georgia, Tbilisi) |
Foreign presence of commercial banks of the Republic of Azerbaijan
| Type of presence [2] | Total | Post-Soviet space | Europe | America | Asia |
| Subsidiary bank | 2 | 2 | - | - | - |
| Branch | one | one | - | - | - |
| Representation | five | - | 3 | one | one |
| Main countries | - | Russia, Georgia | Great Britain, Germany, Luxembourg | USA | UAE, Turkey |
See also
- List of banks in Azerbaijan
- Azerbaijan economy
- Ministry of Finance of Azerbaijan
- Azerbaijan financial policy
- Azerbaijan Financial Market Supervision Chamber
- Central Bank of the Republic of Azerbaijan
- Baku Stock Exchange
Notes
- β 1 2 3 4 5 6 7 8 Azerbaijan - Banking System . www.azerbaijan.az. Date of appeal October 12, 2018.
- β 1 2 3 Banking system of Azerbaijan .
- β MGIMO professor Vladimir Sukhoi: The banking system of Azerbaijan is a path to recovery (Russian) . Date of appeal October 12, 2018.
- β 1 2 3 4 Central Bank (azerb.) . www.azerbaijans.com. Date of appeal October 12, 2018.
- β Creation of the National Banking System of Azerbaijan . www.dslib.net. Date of appeal October 12, 2018.
- β Banking system of Azerbaijan: challenges and prospects of globalization . cyberleninka.ru. Date of appeal October 12, 2018.
- β Barnett, Ryan . Fitch: Azerbaijan banking sector βbroadly stableβ (March 12, 2014). Date of treatment March 20, 2014. (English)
- β RPT-Fitch Affirms Five Azerbaijan Privately-Owned Banks (March 11, 2014). Date of treatment March 20, 2014. (English)
- β 1 2 Changes are needed now, otherwise the banking system of Azerbaijan will finally collapse (Russian) , ECHO (November 26, 2016). Date of appeal October 12, 2018.
- β 1 2 In 2013, the banking system of Azerbaijan expects positive efforts (Rus.) , Trend.Az (December 26, 2012). Date of appeal October 12, 2018.
- β Statistical data .
- β 1 2 Assets of the banking system of Azerbaijan decreased for 1 quarter (Rus.) , Abc.az. Date of appeal October 12, 2018.
- β 1 2 Mammadov, Famil Nazim. The banking system of Azerbaijan at the present stage: problems of competitiveness (Russian) // Scientific journal NovaInfo.Ru. - 2016.
Links
Literature
- Gadzhiev D.F. Monetary system and the International Bank of Azerbaijan. Moscow: Finance and Statistics, 2008, 240 p.
- Ismailov E.M. Currencies of the countries of Central Eurasia in the context of financial globalization. Stockholm: CA & SS Press, 2009,132 p.
- Kerimov A.E. Banking services market: theory and practice (on the example of commercial banks of the Azerbaijan Republic). Baku: iqtisad Universiteti, 2010, 400 p.
- Mamedov Z.F. Banking crisis and banking sector reform in the context of globalization. Baku: Azerneshr, 2007, 392 p.
- Mamedov Z.F. Banking sector of Azerbaijan: analysis and evaluation // Scientific works. Academy of Management under the President of the Republic of Belarus. 2014. - Part of IC
- Murshudli F.F. Banking services for foreign economic activity of Azerbaijan in the context of financial globalization. Baku: Sharq-Qarb, 2013, 416 p.
- Rustamov E.S. Economic modernization of Azerbaijan: challenges and solutions. Moscow: Econom-Inform, 2010, 367 p.
- Statistical Bulletin of the Central Bank of the Republic of Azerbaijan. 2009, N 1 (107).
- Statistical Bulletin of the Central Bank of the Republic of Azerbaijan. 2013, No. 1 (155).
- The annual report of the Central Bank of the Azerbaijan Republic (for the relevant years).
- Financial Sustainability Review. Baku: Central Bank of the Republic of Azerbaijan, 2013.
- Rybin EB Ways to increase the competitiveness of Russian banks. Moscow: Finance and Statistics, 2008.
- Fundamentals of banking (Banking). Ed. K.R. Tagirbekova. M .: Infra-M, The Whole World, 2003, p. 26.
- Development concept "Azerbaijan - 2020: a look into the future." Baku, 2012.