Approved by Board decision of National Bank of the Azerbaijan Republic of June 28, 2006 the Protocol No. 17

Instruction for involuntary liquidation of banks and local branches of foreign banks

1. General provisions

1.1. This Instruction is prepared according to the Civil code of the Azerbaijan Republic, the Laws of the Azerbaijan Republic "About National Bank of the Azerbaijan Republic" and "About banks" and determines rules of involuntary liquidation of banks and local branches of foreign banks (further banks).

1.2. This Instruction does not extend to the banks which are voluntarily liquidated and announced insolvent.

2. Determinations

The determinations used in this Instruction mean the following:

The temporary administrator - person designated by National Bank for temporary management and management of problem banks on the bases established by the legislation of the Azerbaijan Republic.

The liquidator - the person designated by court based on the appeal of National Bank about involuntary liquidation of bank, performing powers on bank management in the course of liquidation for completion of settlings of the liquidated bank with creditors.

The creditor of bank - person having claims according to obligations of the liquidated bank.

The interim liquidation balance sheet - the report approved by court and reflecting information on structure of property of the liquidated bank, the list of claims of creditors, and also results of consideration of these requirements.

The liquidation balance sheet - the report prepared after completion of settlings with creditors and approved by court.

3. Bases for involuntary liquidation of bank

3.1. The bank from which the license is revoked can be liquidated on one or several bases:

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