Banking and financial sector in 2020-BRIEF OVERVIEW

The year 2020 was remembered by various changes and events in the banking and financial sector.

What were these?!

Remember:

January 28 – 4 new departments have been established in the Central Bank of Azerbaijan. These include Consumer Affairs , Capital Market and Other Financial Intermediaries , Financial Stability , Prudential Policy and Methodology .

January 31 – The Board of the Central Bank of Azerbaijan (CBA) has decided to reduce the discount rate from 7.5% to 7.25%.  

March 11 – The Ministry of Labor and Social Protection of Azerbaijan, the Central Bank of Azerbaijan and the Azerbaijan Banks Association (ABA) have signed a memorandum of cooperation to assist in the organization of self-employment of sensitive groups.

March 19 – Global Finance named the International Bank of Azerbaijan the best bank in the country  

The bank was awarded for its successful performance and strategic projects in accordance with customer needs. Global Finance has selected banks from more than 150 countries to determine the best of the year.

March 19  – Board of the Central Bank of Azerbaijan was decided to keep discount rate at 7.25%

March 20 – A treasury account is opened for the Coronavirus Support Fund

March 21 – It was announced that Part of the Value Added Tax (VAT) paid by Azerbaijani citizens for goods (excluding oil and gas products) purchased from individuals engaged in retail trade or catering activities in the country will be refunded to them within 30 days.

April 4 – “On a number of measures to reduce the negative impact of the coronavirus (COVID-19) pandemic and, consequently, sharp fluctuations in world energy and stock markets on the economy of the Republic of Azerbaijan, macroeconomic stability, employment and entrepreneurship in the country in 2020 on approval of the  Action Plan on implementation of item 10.2 of the Order No. 1950 dated March 19” 

  1. Payment of a certain part of the salary of employees working in the areas affected by the pandemic (in order not to reduce jobs);
  2. Providing financial support to individual (micro) entrepreneurs operating in areas affected by the pandemic;
  3. To consider the amnesty of capital and property in the country in order to expand the financial sources of economic growth and investment
  4. Entrepreneurship operating in areas affected by the pandemic tax on entities (including small and medium enterprises) granting of benefits and vacations
  5. Allocation of additional funds to the Entrepreneurship Development Fund
  6. Entrepreneurship operating in areas affected by the pandemic 0.5 billion to be given to entities (including small and medium enterprises) issuance of state guarantee on bank loans in the amount of AZN and subsidization of loan interest
  7. Issuance of a lump sum payment in the amount of the subsistence minimum (190 manat) to people registered as unemployed in the State Employment Service
  8. Ensuring temporary employment of unemployed people through the creation of 50,000 paid public job

April 9 – The Central Bank of Azerbaijan establishes a Unified Control and Monitoring System

April 25 – The Central Bank  decided to take additional measures to support the population and business in the context of the coronavirus pandemic. The additional action plan includes the following and other issues:

  1. Restructuring of mortgage loans issued at the expense of the Mortgage and Credit Guarantee Fund until March 1, 2020 on the basis of the Fund’s consent (for this purpose, by changing the relevant regulations of the Fund) until September 30, 2020;
  2. Non-deterioration of credit quality by banks during the restructuring of mortgage loans issued until March 1, 2020 at the expense of the Mortgage and Credit Guarantee Fund;
  3. Recommendation to banks not to charge additional interest, penalties and other payments from the debtor in case of full or partial delay of loan obligations (principal and interest payments);
  4. Submission of negative data on borrowers with satisfactory quality as of March 1, 2020 and delaying credit debt due to the pandemic with a special note to the credit bureau by September 30, 2020 (Non-deterioration of the borrower’s credit history)
  5. In case of restructuring of loans of entrepreneurs with satisfactory quality and subsidized interest rates in accordance with the Action Plan approved by the Cabinet of Ministers of the Republic of Azerbaijan as of March 1, 2020 Non-deterioration  quality of the borrower until September 30, 2020, regardless of the financial situation;
  6. Reduction of service fees charged by banks in interbank payment systems to 50% by September 30, 2020;
  7. Recommend a similar reduction in tariffs for payment services provided to bank customers;
  8. It is recommended to reduce acquirer tariffs by 50% by September 30, 2020 in order to reduce the cost of accepting payments by business cards.

April 27 – The Central Bank of Azerbaijan appointed temporary administrators to 4 banks

By the decision of the Board of the Central Bank of Azerbaijan today, temporary administrators have been appointed to Atabank, AGBank, NBC Bank and Amrah Bank.

April 27 – President of Azerbaijan Ilham Aliyev signed a law extending the period of full insurance of the population for another 9 months, regardless of the amount of all protected deposits.

April 28 – Atabank and Amrah Bank licenses are revoked

April 28 – It was announced that no state funds will be involved in the return of deposits in Atabank and Amrah Bank

May 1-  Board of the Central Bank of Azerbaijan was decided to keep discount rate at 7.25%

May 4 – Kapital Bank was involved as an authorized bank in the process of refunding a part of VAT

May 10 – ABA signed another contract with the self-employed

In connection with the birthday of national leader Heydar Aliyev on May 10, 2020 ABA member banks with citizens whose  involved in the self employment program  next time the relevant grant agreements and serve according to them and assets in production areas (including in-kind materials, equipment and other property) provided free of charge on the basis of a contract for a period of 2 years have done.

May 12 – AGBank and NBC Bank’s licenses are revoked

May 19 – Standard Insurance’s license is revoked

June 1 – The Swiss State Secretariat for Economic Affairs (SECO) approved a program in the field of taxes to be implemented jointly with the Ministry of Economy of Azerbaijan and the World Bank.

June 11 – Students of Baku State University were presented with a “Smart Student Card”

Students of Baku State University were presented with “Smart student cards” of “Kapital Bank” OJSC. These cards were implemented at the initiative of the Ministry of Education of the Republic of Azerbaijan, the Central Bank and BSU, with the support of Kapital Bank and MasterCard.

June 18 – Sarah Michael has been appointed World Bank Country Manager for Azerbaijan

June 19 – The Board of the Central Bank of Azerbaijan (CBA) has decided to reduce the discount rate from 7.25% to 7%.

June 29 – Chairman of the Board of “Industrial Bank of Azerbaijan” Dogan Tandogan died.

July 2 – The Mortgage and Credit Guarantee Fund (MCGF) provides guarantees and interest subsidies for fully unsecured loans, in addition to secured loans.

July 2 – The monetary base in Azerbaijan exceeded 11 billion manat

July 7 – The obligation of the Azerbaijan Deposit Insurance Fund (ADIF) to submit its annual report and audit opinion to the President was canceled

The Fund will then submit its annual report and audit opinion to the body (institution) designated by the relevant executive authority, the financial market supervisory authority and the organizations represented on the Board of Trustees.

July 8 – The Azerbaijani government and the World Bank have signed an agreement to provide an additional loan of $ 50 million to continue reforms in the justice system.

July 9 – The Oil Fund gains from losses on its property in Moscow

July 14 – Azerbaijan became the most cited country in the World Bank report

July 16 – The share of the dollar in SOFAZ investment portfolio exceeded 68%

July 25 – International rating agency Standard & Poor’s (S&P) affirmed Azerbaijan’s credit rating at ‘BB + / B’

July 30 – The Board of the Central Bank of Azerbaijan (CBA) has decided to reduce the discount rate by 0.25 percentage points from 7% to 6.75%.

August 4 – Kapital Bank launched a full digital online account opening service

August 7 – Azerbaijan Investment Holding was established

August 11 – The Central Bank of Azerbaijan and IFC signed a cooperation agreement

The project provides for the creation of a regulatory framework for access to banking products and services, the development of a roadmap for the application of open banking approach, the operation of the Instant Payment System, as well as access to remotely identified banking products and services (opening a bank account, obtaining a loan). It is planned to work in such areas as preparation of recommendations on acts. At the same time, joint cooperation is planned to create a special regulatory test regime that will allow banks and enterprises to test innovative financial services and products.

August 12 – A new payment system is launched in Azerbaijan

In order to introduce new digital payment technologies in the country and increase access to payment services in the framework of the “State Program for the expansion of digital payments in the Republic of Azerbaijan in 2018-2020”, the Instant Payment System (INP) implemented by the Central Bank was launched in pilot mode.

August 18 – Limit on contactless payments in Azerbaijan has been doubled

August 28 – “Azerbaijan Credit Bureau” launched a new scoring service

September 1 – Unified budget classification changed

  The Cabinet of Ministers amended the decision dated October 11, 2018 “On approval of the single budget classification.” According to the decision, according to Article 11.5 of the Town Planning and Construction Code, revenues from services provided in the field of construction activities, as well as revenues from fines for violations of urban planning and construction legislation are included in the single budget classification.

September 15 – Banking services became free for low-income groups in Azerbaijan

As part of the measures taken in this direction, the CBA together with the Association of Banks of Azerbaijan (ABA) prepared a package of free “Basic banking services” for low-income groups and presented it to the banking sector.

September 17 – Azerbaijan again became a donor to ADB funds

Donors of the Asian Development Bank (ADB) have agreed to allocate $ 4 billion to the Asian Development Fund (ADF) and the Special Technical Assistance Fund (TASF), which were established to provide grants to low-income countries in 2021-2024.

September 18 – The Central Bank lowered the discount rate

The Board of the Central Bank of Azerbaijan (CBA) has decided to reduce the discount rate from 6.75% to 6.5%.

September 30 – Banks restructured 1.1 billion manat in loans due to the pandemic

October 12 – The state’s share in the International Bank of Azerbaijan was announced

91.4% of IBA shares belong to the Ministry of Finance, 3.76% to the State Service for Property Issues under the Ministry of Economy, 0.13% to Agrarkredit CJSC non-bank credit organization (NBCO), 4.71% – i belongs to individuals and legal entities.

October 13 – The Central Bank of Azerbaijan launched the Digital Identification System

October 20 – 1, 5 and 50 manat banknotes were renewed in Azerbaijan

The security systems and design of 1, 5 and 50 manat banknotes have already been updated with the application of the latest technology and innovations within the existing concept. The new banknotes with the updated design and advanced security systems will be issued on January 1, 2021.

October 24 – A decision was made to write off the loans of servicemen and civilians who lost their lives in the war.

October 25 – S&P confirms Azerbaijan’s credit rating

International rating agency S&P Global Ratings has affirmed Azerbaijan’s long-term and short-term sovereign credit rating in foreign and national currencies at ‘BB + / B’.

October 27 – SOFAZ removes the Korean won from its investment portfolio

October 30 – The next “Pay by card, win by card” lottery has started in Azerbaijan

October 30–Board of the Central Bank of Azerbaijan was decided to keep discount rate at 6.5%

November 2 – Chairman of the Azerbaijan Stock Market Participants Association changed.

 As a result of voting, Director of PASHA Capital Investment Company Jeyhun Hajiyev was elected chairman. He replaced Jeyhun Ibrahimov, Deputy Director of Invest-Az Investment Company.

November 16 – The State Tax Service launched a new service related to “Easy Signature”

According to the information, this is an online service of online renewal of existing “Easy Signature” certificates and online acquisition of Business (Business) and State and municipal type “Easy Signature” certificates on the basis of private type “Easy Signature” certificate.

November 21 – Fitch confirms Azerbaijan’s rating

International rating agency Fitch has affirmed Azerbaijan’s long-term foreign currency default rating (IDR) at ‘BB +’.

November 23 – The Regulations on the “Electronic Mortgage and Credit Guarantee” system were changed

President Ilham Aliyev has signed a decree amending the Regulations on the Electronic Mortgage and Credit Guarantee System.

According to the decree, another information was added to the list of information transmitted to the electronic system with the provision of guarantees and interest subsidies on business loans.

This is information on the relevant supporting documents when an entrepreneur who has received an investment promotion document or who has received an export promotion in the current year applies for loans in the relevant area of economic activity in which the investment is made.

November 26 – It was possible to buy “ASAN İmza” in the branches of “Kapital Bank”

November 28 – The broad currency in manat in Azerbaijan renewed its historical maximum

As of November 1, the broad money supply in Azerbaijan amounted to 26 billion 947.9 million manat.

December 3 – A joint ATM network of Azerbaijani banks was launched

Eleven Azerbaijani banks – Azerpocht LLC – have signed a collective agreement on the joint use of existing ATM networks

December 9 – 145 million manat loans were issued through the Electronic Credit Platform

December 15 – The State Fund for Standardization was established

December 15 – Azerpocht ”was integrated into the Instant Payment System.

December 16 – Bank Respublika begins cooperation with the famous Bank of New York Mellon

December 16 – Unified budget classification was changed in Azerbaijan

The purpose of the amendment is to change the unified budget classification to the Law on Medical Insurance to adapt to changes. So income part of the classification The words “social contributions” with the words “social and compulsory health insurance contributions” was replaced, some paragraphs have been deleted, auxiliary sections have been added.

December 17 – Azerbaijan’s position in the “Doing Business 2020” report improved by 6 points, our country once again entered the top ten most reformist countries in the world

December 18 – The Central Banks of Azerbaijan and Turkey signed a Memorandum of Agreement

According to the document, the parties will exchange experience in various areas of central banking, conduct joint research, conduct training programs and provide consulting services. At the same time, the memorandum will exchange information and views on economic and financial processes in both countries, as well as central banking issues.

December 18 – The Central Bank of Azerbaijan reduced the discount rate

The Board of the Central Bank of Azerbaijan (CBA) has decided to reduce the discount rate by 0.25 percentage points from 6.5% to 6.25%.

December 18– Central Bank of Azerbaijan (CBA) decided on the optimization of service fees of National Depository Centre

December 22 – New appointment was been the position of Chairman of the Management  Board  of  Yelo Bank  OJSC. According to the decision of the Supervisory Board of the Bank, this position was filled by Anar Hasanov and will start operating on January 5, 2021.

December 26 – The term of full deposit insurance in Azerbaijan has been extended for another 4 months

December 26 – The International Bank of Azerbaijan has joined the VAT refund system.

December 26 – The President increased the amount of compensation for deposit insurance

Compensation for protected deposits of individuals by law amount was increased from 30 thousand to 100 thousand manats (100 thousand manats in foreign currency to the equivalent).

With another change is the opening of individuals in connection  entrepreneurial activities compensation on cash in bank accounts not much from 20 (twenty) thousand manats,  money belonging to individuals in deposit accounts of notaries Compensation in the amount of 100% of those funds will be paid.

December 28 – “Yelo Bank”  received “The most innovative corporate rebranding strategy”  award

December 28 – The representative office of Kommerzbank AG in Azerbaijan was  been liquidated.

December 29 – Centralized trading system in the capital market of Azerbaijan will be established.

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