OREANDA-NEWS. February 22, 2011. The Central Bank of the Republic of Azerbaijan held an extensive meeting under the direction of the Governor of the Central Bank Elman Rustamov with the participation of the Banks Association of Azerbaijan, and representatives of the banking sector and banking community, reported the press-centre of CBA. 

The event was attended by the management of the Azerbaijan Mortgage Fund and the Financial Monitoring Service under the Central Bank, as well as the Deposit Insurance Fund.

Elman Rustamov noted in his opening speech that modernization and development strategy of the leadership of the country resulted in rapid growth of the national economy. Over the last 3 years, volume of domestic output increased by 3 times as much, which led to a change in the socioeconomic and cultural profile of the country, creation of modern socioeconomic infrastructure, economic prosperity and revival in the regions. Stable sustainable development prevailed in the country.

Azerbaijan advanced 35 steps and reached the 81st place among 183 countries according to the level of national income. Poverty rate decreased from 40% to 9%. According to the International Competitiveness Index of the Global Economic Forum, the country advanced 12 steps among 139 countries as compared to 2005, and reached the 57th place.

Azerbaijan successfully overcame the transition period and became known throughout the world as a country having dynamically developing market economy. A high international investment rate has established in the national economy and the process continued in the period of the global crisis. The World Bank assessed Azerbaijan as a leader in the world according to the depth of market reforms with the global crisis under way.

As a result of the implemented successive economic policy, the national economy reliably protected itself against the effects of the global crisis. According to the Report on International Competitiveness, the country is on the 13th place for the index of macroeconomic sustainability.
Banking sector played a special role in the rapid growth of the national economy. Deepening of financial intermediation function of banks supported non-oil economy, development of private entrepreneurship and layering of the government.

Key indicators of the banking sector increased by 15 times as much over the past decade. Access to the financial services of the country and international stability rate of the banking sector have improved. Majority of the community, i.e., about 4 million people, is provided with financial and banking services. Banking and electronic payment infrastructure rendering financial services to the business and population is created in the country.

E.Rustamov noted that at the meeting dedicated to the socioeconomic outcomes of 2010, President of the Republic of Azerbaijan Mr. Ilham Aliyev gave instructions on modernization and diversification of the national economy, improvement of business and investment environment, and increase of the role of small and medium entrepreneurship, and offered new strategic initiatives. The Central Bank and the banking sector face serious tasks in the realization of the strategy.

Revision of interest rates on credit products, as well as tariffs for other banking services was touched upon during the meeting, for the purpose to expand opportunities of entrepreneurs and the population to use financial services. To increase profitability rate and competitiveness of the business, significance of the value of financial resources was emphasized. The ways of reducing the cost of services for social payments for low-income people were discussed during the meeting.

A special attention was paid to costs and the structure of banking activity, constituting a kind of business activity, as well as to reduction of the cost of banking services and products. The meeting also covered such issues as realization of deposits, as well as terms and expenses required thereof, there was given information about the work carried out in this sphere, and offers prepared for the improvement of deposit mechanism.

It was noted that, the level of awareness of the population and entrepreneurs on banking services shall be raised, they shall be provided with detailed explanations.

Transparency principles shall be adhered to in bank-customer relations and unnecessary bureaucracy shall not be allowed. Ethical behavior level of bank employees shall be raised, a high corporate culture shall be demonstrated in relations with customers.

Services of the banking sector shall be rendered based on modern technologies, automation level shall be raised, physical contact with customers shall be minimized. Banks shall increase range of their products and services, and offer products meeting requirements of broad population masses and various economic sectors.

Effective funding mechanisms of the agrarian and farming sectors from the point of view of reliable provision of food security were especially discussed. More dynamic activity of the regional network of banks and respective financial innovations were emphasized.

Banks shall increase their social liability, and try to increase financial culture and transparency of the business community and society. Special campaigns shall be implemented by means of special literature, TV programs and other communication tools.

One of the most important tasks is to increase the use of non-cash payments. The Central Bank, banks and respective economic agencies should work actively to expand use of established infrastructure by economic subjects. It will expand the tax base of the budget, and increase investment potential of the banking sector. The population will make payments via safe and convenient means.

Banks must initiate encouraging activities for non-cash payments, try to make deals at more favorable prices, and expand and improve technological infrastructure offered to customers.

Analyses show that there is a great need in mortgage loans and this mechanism shall be expanded. Therefore, it is necessary to use financial means of the domestic market. Applications of citizens to obtain loans shall be considered on a timely basis, unnecessary bureaucracy shall be eliminated, and the role of human factor shall be reduced.

The Financial Monitoring Service operating under the Central Bank will also play an important role in the improvement of business environment. Efficiency of the joint activity of the service with relevant agencies shall be increased. Banks shall strengthen their internal control system to prevent money laundering through the banking sector.

At the end of the meeting, it was decided to create working groups by the Banks Association and the Confederation of Entrepreneurs for fulfillment of issues raised during the discussions. It was noted that the issues raised during the discussions, will be studied again and an action plan will be prepared.