LAW OF THE AZERBAIJAN REPUBLIC

of April 7, 2017 No. 569-VQD

About introduction of amendments to the Law of the Azerbaijan Republic "About banks"

Being guided by Item 27 of part I of article 94 of the Constitution of the Azerbaijan Republic, Millie decides Majlis of the Azerbaijan Republic:

In the Law of the Azerbaijan Republic "About banks" (Collection of the legislation of the Azerbaijan Republic, 2004, No. 3, Article 130; 2005, No. 4, Article 276; 2007, No. 5, Article 401, No. 6, Article 562, No. 11, Article 1070; 2008, No. 11, Article 960; 2009, No. 6, Article 404, No. 7, Article 517; 2010, No. 4, Article 276, No. 10, Article 839; 2011, No. 7, Article 590; 2013, No. 7, Article 790; 2014, No. 7, Article 772, No. 12, Article 1517; 2015, No. 11, Article 1262; 2016, No. 6, Article 975) to make the following changes:

1. Under Article 1:

1.1. in the first paragraph of Article to the word "B" to add with figures "1.0".;

1.2. paragraphs to consider second-twenty third Articles 1.0.1-1.0. Point to replace 22, at the end of Articles 1.0.1-1.0.17 and 1.0.19-1.0.22 with semicolon;

1.3. in Article 1.0.13 of the word "legal entities" shall be replaced with words "legal entities …, persons with whom operations were performed, considerably different from market conditions and not having the explicit economic reasons";

1.4. add with Articles 1.0.23-1.0.33 of the following content:

"1.0.23. Fund - the legal entity created according to the Law of the Azerbaijan Republic "About deposit insurance";

1.0.24. The bank which lost solvency - bank which lost solvency or solvency of which under the threat, concerning which one or several bases specified in articles 57.1.1-57.1.3 of this Law are established;

1.0.25. The resolution - implementation by supervision body behind the financial markets of measures, the stipulated in Article 57.6 presents of the Law, for the purpose of immediate and less costly discharge which lost bank solvency including bank holding company from the financial market;

1.0.26. The actions plan under the resolution - the document which reflects method, conditions, term and economic case of the resolution lost bank solvency;

1.0.27. Bridzh-bank - the bank created and managed by supervision body behind the financial markets for the purpose of the full or partial translation and temporary management of healthy assets and liabilities which lost bank solvency;

1.0.28. Bank buyer - bank which according to the procedure, established by this Law, by means of auction acquires assets and liabilities lost bank solvency;

1.0.29. The investor - the legal entity or physical person which addressed to supervision body behind the financial markets for the redemption which lost bank solvency or the bridge bank according to the procedure, established by this Law;

1.0.30. The temporary administrator - the person designated by supervision body behind the financial markets in the cases provided by this Law, performing on behalf of supervision body behind the financial markets all powers on management of the bank which lost solvency within the resolution, including power of general meeting of shareholders of bank;

1.0.31. Healthy asset - asset which according to acts of normative nature of supervision body behind the financial markets is classified as standard asset;

1.0.32. Systemically significant bank - the bank corresponding to the criteria established by acts of normative nature of supervision body behind the financial markets;

1.0.33. Voluntary restructuring of obligations of bank - set of administrative, legal, financial, organizational and technical and other measures and procedures which are performed on the basis of the restructuring plan (further - the restructuring plan) for the purpose of improvement of financial condition of bank.".

2. In Article 10.2.1 of the word "during … years" it is at least shall be replaced with words "during term … years", to replace the word of "three" with the word of "two";

3. At the end of Article 16.1.18 to replace point with semicolon and to add with Articles 16.1.19 and 16.1.20 of the following content:

"16.1.19. if it is provided in the actions plan under the resolution lost bank solvency;

16.1.20. if it is not complete during the term provided for execution of the actions plan under the resolution of bank or if measures for recovery of solvency did not bring results.".

4. In Article 19.1 the word "Bank" shall be replaced with words "Except as specified, the stipulated in Article 57-8 these Laws, bank".

5. Add Article 34.5 with the second offer of the following content:

"The supervision body behind the financial markets has the right to establish concerning systemically significant banks the standard rates and requirements different from the standard rates and requirements established concerning banks according to article 34.2 of this Law.".

6. Exclude Chapter VII.

7. State Chapter VIII in the following edition:

"Chapter VIII. The resolution lost bank solvency

Article 57. Appointment of the temporary administrator to the bank which lost solvency

57.1. The supervision body behind the financial markets makes the decision on appointment to bank of the temporary administrator in connection with loss of solvency in cases when it is established one or several of the following bases:

57.1.1. the size of the aggregate capital of bank reaches 25 percent of the minimum size of the aggregate capital established for banks by supervision body behind the financial markets, or its coefficient of adequacy reaches 3 percent;

57.1.2. the bank cannot provide execution of payments according to any obligation, or has no enough liquid means for obligation fulfillment which term expires, except as specified, the stipulated in Clause 57-11 these Laws;

57.1.3. the banking license is subject to cancellation for other reasons, the established this Law.

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