The main goal of the Azerbaijan Deposit Insurance Fund (ADIF) is to more efficiently and effectively complete the liquidation process of banks, Trend reports referring to a source in ADIF.
One of the fund’s functions is to sell bank assets in legislative manner to speed up the process of liquidating banks and fulfilling their obligations to creditors. Namely for this reason global experience has been studied to ensure the sale of banks in accordance with modern standards and in a more efficient way. During the study, it has been determined that of the various strategies used by the leading countries, the most transparent and suitable for Azerbaijan is the auction mechanism.
According to the source, the formats for holding auctions differ, and currently, given the development of more specialized information technologies, including the introduction of a quarantine regime announced in Azerbaijan due to the COVID-19 pandemic, as in a number of other countries, it has become necessary to give preference for e-commerce.
In accordance with the requirements of the time, ADIF plans to conduct the auctions using electronic platforms. By applying the new approach, the fund will accelerate both the repayment by banks in liquidation of their obligations to creditors in the legislative way, and will provide buyers with flexibility in time and space.
In order to prevent the risk of loss of solvency by banks and local branches of foreign banks, loss of deposits by individuals, to ensure stability and development of the financial and banking system, the Law of Azerbaijan ‘On Deposit Insurance’ was adopted on December 29, 2006. Based on Azerbaijani president’s decree dated February 9, 2007, the Deposit Insurance Fund was established, and on August 12, 2007 it began its activities.
The Azerbaijani banks, the licenses of which have been canceled, and which were declared bankrupt by a court decision, or started the bankruptcy process, were transferred to ADIF for liquidation.
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