Financial Stability Council to engage in IBA recovery
By Nigar Abbasova
A special plan of actions will be prepared in order to speed up the recovery of the country’s biggest bank, International Bank of Azerbaijan (IBA).
This is envisaged in President Ilham Aliyev’s decree on approval of the draft state budget for 2017.
The decree instructs Azerbaijan’s Financial Stability Council to prepare the plan of actions.
Under the decree, the Council is instructed to prepare and approve a monetary program for 2017, as well as a plan of actions to ensure macroeconomic and financial stability for 2017 and medium-term period that should include measures on intensifying the IBA’s recovery.
The Financial Stability Council was created under the presidential decree to further strengthen macroeconomic stability and financial sustainability in the country, conduct coordinated policy in this sphere and others.
The council is chaired by Prime Minister Artur Rasizade.
The shortcomings in the management, investment and loan policy of the IBA in recent years, as well as financing of less efficient, risky investment projects worsened the bank's financial state, caused increase in the share of distressed assets and reduced its liquidity.
In July 2015, President Ilham Aliyev signed a decree on the measures for rehabilitation related to the preparations for privatizing the state-owned shares of the IBA.
To overcome the current situation, restore the bank's financial position and ensure its sustainability, the distressed assets of the bank were transferred to the state-owned Aqrarkredit CJSC non-banking credit organization. Bonds worth 3 billion ($ 1.74 billion) were issued under the state guarantee to ensure IBA's liquidity.
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