Head of VTB (Azerbaijan): Necessary to change the individual deposit insurance system

In Azerbaijan, it is necessary to change the system of insurance of individual deposits and shift to the classical scheme, which provides for the introduction of the maximum amount, chairman of the board of VTB (Azerbaijan), Yevgeny Kirin said speaking at a press conference.

"The current system applied by the Azerbaijan Deposit Insurance Fund (ADIF) was an anti-crisis measure designed for 2015-2016, and it was justified. However, today, with a stable manat rate and positive forecasts by international rating agencies, there is a need to move to the classical insurance scheme of deposits, which will allow a more responsible approach to investors when choosing a bank for deposit placement," said Kirin.

According to him, in the conditions of high macroeconomic indicators in the country, it is time to return to the old scheme. This contributes to the stabilization of the deposit market and the normalization of rates depending on the level of inflation and interest rates on loans: "The risk appetite and interest rates are different for each bank, resulting in a maximum deposit rate set by ADIF above the deposit attraction rate of banks."

ADIF began operations on August 13, 2007. The upper limit of the interest rate on insured deposits in foreign currency is three percent. The maximum level of the annual interest rate on insured deposits in national currency shall not exceed 15 percent.

According to the law "On Full Insurance of Deposits," for three years, deposits of the population, the annual interest rate for which does not exceed the maximum level set by the ADIF Board of Trustees, will be insured, regardless of the amount of the deposit.