Date:22/02/13

Popularity of bank transfer systems increases in Azerbaijan

Work is underway in Azerbaijan to expand the application of bank transfer systems. These measures are being implemented because of the very large volume of cash money supply in the country. According to information provided by “ICTnews” online news service, the Central Bank intends to impose 30 kopecks tariff for each cashed AZN 100 bank-note.

Taking into account the microeconomic development of the country and growing volume of cash money supply, the Central Bank began to carry out valuations on a regular basis to optimize the structure of cash money and insure the adequacy of payments. Based on the results of these valuations the Central Bank established a 0.3 percent tariff for cashing AZN 100 bank-note. This measure was taken with the aim of increasing the efficiency of cash transactions, optimizing the nominal value of currency units, reducing the volume of cash money transactions and stimulating the use of bank transfer systems.

It should be noted that over the last 7 years, the share of AZN 100 bank-notes in the money turnover has increased by 75 percent, which is unacceptable in the international practice. Application of the tariff will decrease the demand for AZN 100 bank-notes and will optimize the structure of cash money supply in the turnover by raising the share of other banknotes in the total volume of transactions and stabilizing the demand for cash many in the country. It should be noted that in most countries central banks handed over a number of their functions, such as issuing, transporting and possessing of monetary units, to the private sector, and commercial banks in most countries are provided with services on a paid basis.

Unlike them, the Azerbaijan Central Bank doesn’t take any fees for cash money transactions.

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