By Sara Israfilbayova
Azerbaijan should continue restructuring of the banking sector, said Director of the International Monetary Fund (IMF) Department for the Middle East and Central Asia Jihad Azour at a press conference in Baku on September 13.
"We discussed the issue of restructuring of the International Bank of Azerbaijan (IBA), as well as the entire banking sector as a whole, within the framework of meetings with the Minister of Finance, as well as the leadership of the Financial Market Supervisory Body (FMSB) and the Central Bank of Azerbaijan (CBA), and we believe that the government of Azerbaijan took serious steps to resolve issue with problem banks," Azour noted.
Azour went on to say that restructuring of the banking sector will positively impact on its sustainability, increase confidence in the financial and banking sector, and reduce budgetary risks.
The restructuring process of the banking sector in the country began in January 2016. As a result of this process, the licenses of 11 banks, which did not meet the regulator's requirements, were revoked, .Also there was a merger of two banks - Atabank and Caspian Development Bank.
Moreover, 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 International Bank of Azerbaijan JSC.
The shortcomings in the management, investment and loan policy of the IBA, 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.
The IBA has been operating since 1992 and is one of the country's two state banks.
Currently, 31 banks are implementing their activities in Azerbaijan.
The International Monetary Fund (IMF), created in 1945, is an organization of 189 countries, working to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty around the world.
The IMF office was opened in Baku since 1992. The IMF allocated to Azerbaijan loan in the amount of $577.3 million in 1995-2005 to support the program of economic reforms. Azerbaijan fully repaid the loans of the fund.
Starting from 2005, there was no need for Azerbaijanto apply to the IMF financial resources, therefore, since 2006, the IMF and Azerbaijan have cooperated in consultations and technical assistance missions in the main areas of macroeconomic policy.
Follow us on Twitter @AzerNewsAz