Azernews.Az

By Fatma Babayeva

The transition to the new operating model of currency exchange may be more advantageous rather than maintaining the old format in Azerbaijan, banking circles of the country believe.

Azerbaijan ceased the work of the exchange offices operating outside the banks and their branches in January 2016.

The exchangers that previously functioned outside banks created some problems along with the advantages they had, source said.

More than 200 exchange points functioned in the country which was difficult to control. The owners of currency exchange points did not always adhere to the relevant regulations and even sometimes, changed exchange rates in their own favor that caused to the artificial shortage of currency which experienced during the period of devaluation.

Meanwhile, banks received less income from the exchange points since maintaining them was costly. Rent for a place, payments for utilities, employee salaries and other expenses needed to be covered.

At present, as the exchange points only function within banks and their branch offices.

It is also necessary to take account the security issue which is provided in a higher level at banks and their branch offices.

Currently, all banks have passed into the retrenchment regime. Incomes from foreign exchange operations may seem significant when the volume of credit activities have been reduced.

According to the statistics provided by the Central Bank of Azerbaijan, there were 750 branches of banks operating in the country, and roughly 1,000 people worked in each of them at the end of 2015. The majority of bank branches are located in Baku.

Taking into the consideration the fact that the branches work during weekdays from 9 am to 6 pm and during Saturdays till lunch time, then the absence of exchange points will not create any serious problems for the population and tourists, particularly in the regions of the country, source said.

In this regard, it would be logical to keep exchange points at airports and hotels.

The problem could also be solved via bringing special devices for currency exchange to the country. Such devices take paper money and coins with various value and origin. Initially, Azerbaijan could bring about 50 devices which would have helped to solve the problem about the lack of exchange points to a certain extent.

Moreover, some banks already use such devices. They are installed by PASHA Bank in various hotels. These devices have some advantages such as operating 24 hours and seven days a week and no commission for exchange, etc.

The solution of this problem can also facilitate the introduction of special timetable in the banks’ branch offices or exchange departments, for example during the holidays.

Regarding the issue, the European experience is very interesting. The Polish mBank which is the fourth largest bank of the country moves its branches to the crowded places such as shopping malls. These branches operate on the same principles that stores do in the same malls. They are closed late and work during weekends. It is noteworthy that this approach enabled the bank to triple sales in the branches. Each branch is visited by about 200 people a day. Meanwhile, small branches of the bank function in some malls which are called mKiosks that also provide basic services (opening account, credit arrangements, etc.), the source added.

The source believes that closing the exchange offices outside banks was the right decision. Thus, the Central Bank was able to prevent speculation in the market and reduce agiotage by exchangers.

Currently, the CBA provides banks with the necessary amount of currency through auctions.

Earlier, Zakir Nuriyev, President of the Bank Association of Azerbaijan and the chairman of the Supervisory Board at Rabitabank said that Financial Market Supervisory Board considers the possibility of restoring the currency exchange points. The proposal has already been submitted to the Board during the meeting of the management of this organization with the members of the ABA.

Nuriyev also mentioned that it was proposed to examine the possibility of issuing licenses to legal entities which will allow them to fulfill currency exchange activities, as well as, providing an opportunity to the hotels to exchange currencies without creating exchange points.

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Fatma Babayeva is AzerNews’ staff journalist, follow her on Twitter: @Fatma_Babayeva

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