Will uninsured deposits be returned?

Will uninsured deposits be returned?

02 February 2016, 18:39 947
Recently, in Azerbaijan  licences of some banks have been withdrawn. Consequently, it has brought trouble for people who have deposits in these banks and companies with business bank accounts. Since, according to old law, deposit up to AZN 30.000 were insured. However, there are people and companies having deposits and accounts  more than the above mentioned amount. 

Chairman of Azerbaijani Deposit Insurance Fund, Azad Javadov told in his interview to ATV TV channel that the largest deposit’s amount was AZN 40 mln in the bank that its license withdrawn by Central Bank of Azerbaijan. How  should people demand on their deposits?  In which case return of other part of deposit except insured amount is possible? Which deposits will not be returned. Is there any limit for returning of fund of companies in bank accounts?

Economic expert Vugar Bayramov told our newspaper that, according to current legislation the Central Bank of Azerbaijan defines an agent bank after closure of bank. After that, the CBA transfers all functions of closed bank to the agent bank: "Depositors can get their deposits back in no later than 7 days after definition of agent bank.  Terms for depositors are that only up to AZN 30.000 deposits or its equivalent are insured. It includes deposits with annual percentege rate not more than 12 percent.  Any problem can not be in this issue. Azerbaijani Deposit Insurance Fund pays this money to depositor. A percentage rate of deposit is very significant in this issue. Before, when we were giving any statement to the press, we always called people not to be interested in higher percentages. Vugar Bayramov also noted that deposits with more than annual 12 percentage rate can not be returned by Deposit Insurance Fund, regardless of amount of deposit. That’s why to give back this deposit is impossible. 
According to economic expert, if deposit amount is more than AZN 30.000, in this case, Deposit Insurance Fund can return only AZN 30.000. Getting back of deposit’s other part depends on closed bank's condition: " If bank has opportunity to return other part of deposit, depositor can apply for it.  If bank is not able to give back deposit, then a depositor has right to apply to court for getting back his money completely. During the trial, bank condition and assets will be taken into account. If bank has assets then a possibility of returning deposit will be known. If bank liabilities are more than assets then getting back of deposits may be impossible. Only insured part of deposit will be returned. Since, no one guarantee returning of uninsured deposits. It directly depends on bank’s financial condition.
 Vugar Bayramov also noted that, there is not any AZN 30.000 limit for citizens and companies on bank accounts: "Any limit  is not applied.  In this case bank must give back all money from its current account. The current account does not belong to the bank. This is fund of citizen or company. So, any limit in this issue  can not be applied. All funds of current account must be given back to citizen or company. Otherwise, a citizen or company has right to apply to court and get fully their money back without any limit. Some closed banks were in relatively good condition by shutdown, however some were in worse condition. There were banks that were not able to fulfill their obligations. So, I do not suppose a possibility returning of all deposits. Since, current condition does not allow to do it. Some banks' condition is not satisfactory. Consequently, no one can guarantee unambiguously that uninsured deposits will be returned. 

Bank expert Dunay Gehremanov told that, firstly insured deposits up to AZN 30.000 will be returned by the Deposit Insurance Fund: " Deposits with amount more than AZN 30.000 also will be returned. But it will be realized in next phase. Thereby,  necessary fund will be collected by returning of loans given by bank. 
According to D.Gehremanov, diversity between deposits' amount is not considered mainly during returning of them. A number of citizen’s account is not distinguished. Distribution is planned  equally for everyone.
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