Deposit insurance in Azerbaijan
- Emil Khudiyev (Lawyer)
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Banks in Azerbaijan now offer very tempting deposit conditions. Interest rates varies from 5% and even reach 11%!
But the client of the bank is more concerned about will he even receive at all back with interest rate? So the first question that comes in to a person’s mind before investing money in a bank in Azerbaijan is “Will they return it to me if something happens?”.
This is an adequate reaction, because you don’t want to expose your hard-earned money to the risks that the bank may face.
So, how to keep your deposit in a bank in Azerbaijan in case of financial turbulence?
Let me explain…
What is deposit insurance?
Insured deposit – is a sum, payed as a compensation by Azerbaijan Deposit Insurance Fund upon the occurrence of an insured event.
When making a deposit in a bank, a person should clarify the issue of insurance with the bank where he’s going to make a deposit. The next step is the process of signing the deposit agreement.
Important: In case of depositting money, the depositor doesn’t pay extra fees for insurance!
Also want to point, that all banks of Azerbaijan are members of Azerbaijan Deposit Insurance Fund.
Amount of deposit insurance in Azerbaijand
According to the Law of Azerbaijan “On Deposit Insurance”, in the event of an insured event, the amount up to 100.000 AZN is asap paid to the depositor in full (within 90 days from the date of application to the Fund).
The following deposits are protected in the event of an insured event:
1. cash on current accounts;
2. funds on business accounts (up to 20.000 AZN);
3. deposits of individuals (up to 100.000 AZN);
4. funds on deposit accounts of Notaries.
Only deposits with annual interest rate of up to 12% (in AZN), and in foreign currency (US dollars, Euro) up to 2.5% are protected.
Compensation of deposit in case of an insured event
In the event of an insured event, the depositor, at his request, is immediately paid the insured part of the deposit (100,000 manats), as well as the accrued interest until the moment occurrence of an insured event.
To receive a compensation, you must submit an application to the Fund and attach the following documents:
1. Bank deposit agreement;
2. ID Card;
3. Power of Attorney (if a representative applies for the depositor);
4. Checkbook (or other document confirming the bank deposit).
The approval of the compensation payment is confirmed by the Board of Trustees of the Fund.
Fund accepts applications from depositors within 1 year from the date of publication of the first notice of insurance payments.
FAQ
What deposits are not insured?
1. deposits attracted by bank branches opened outside the territory of Azerbaijan;
2. cash deposits related to the legalization of money or other property obtained by criminal ways and financing of terrorism;
3. deposits determined by a court decision as a commission of a crime;
4. seized deposits;
5. deposits accepted with an annual interest rate above the limit established in accordance with the Law of Azerbaijan “On Deposit Insurance” (Article 8.1.20);
6. funds over 20.000 AZN in bank accounts opened by entrepreneurs;
7. funds of individuals held in trust management of the bank.
Can I receive uninsured part of my deposit?
Yes. You can get an amount exceeding 100.000 manats by standing in the queue for payment and periodically contacting the bank so that you are not forgotten.
What deposits are insured?
1. cash on current accounts;
2. funds on business accounts (up to 20.000 AZN);
3. deposits of individuals (up to 100.000 AZN);
4. funds on deposit accounts of Notaries.
In case I have deposits in different branches of the same bank, how will they be returned?
In this case, the deposits are summed up and paid out as one single deposit. Payment is made in manats.
How EMZE can help you?
When banks go bankrupt, as was the case in the crisis years of 2014-2015, citizens usually don’t know how to behave and how to protect their finances. When such cases arise, legal mistakes are often made (the application was not submitted on time, the necessary documents or information were not provided, etc).
Lawyer’s assistance in such cases guarantees the protection of your rights in the process of obtaining compensation. First of all, it’s recommended to consult with a lawyer, because the competent construction of a strategy lays a solid foundation for the proper conduct of a case from the very beginning.
Other legal services in the field of migration law, you can find in “My Services” section.
Need a Lawyer in Azerbaijan? Just Call Emil!
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