By Ofeliya Afandiyeva
Azerbaijani President Ilham Aliyev has approved amendment to the law “On Full Deposit Insurance” to extend the term of insurances, local media reported on April 25.
Under the amendments, the period of full insurance of deposits in the country has been extended for another nine months - until December 4, 2020. Thus, insurance term of deposits has been extended from four years to 4.9 years under the new amendments to the law “on full insurance of deposits”.
Note that in early March, banks operating in Azerbaijan appealed to the government with a request to extend the period of the law “On Full Deposit Insurance” until December 4 this year.
As a consequence, on March 13, Azerbaijani Parliament adopted the bill on amendments to the Law of the Republic of Azerbaijan “On Full Deposit Insurance”, which was proposed by President Ilham Aliyev.
The decision on full deposit insurance entered into force on March 4, 2016, for a period of three years. The goal was to prevent the outflow of deposits from banks after devaluation of the country’s national currency manat twic in 2015. In March 2019, the parliament extended the law for another year.
The adoption of the law paid off, since three months after the document entered into legal force, bank deposits in Azerbaijan began to grow again and reached about $5.17 billion in October 2019, renewing a four-year high.
From March 4, 2016, the insurance system applies to the entire volume of deposits of the population (previously, deposits up to $17.6 thousand were considered insured).
The only condition is that the interest on the deposit should not exceed the limit set by the Azerbaijan Deposit Insurance Fund (ADIF). Accordingly, deposits of the population with an annual interest rate of more than 10 percent in national currency and more than 2.5 percent in foreign currency are not insured.
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