Problems and Major risks in the Banking Sector of Azerbaijan

2021 ◽  
Vol 27 (12) ◽  
pp. 1003-1012
Author(s):  
T. Dzhabieva
Keyword(s):  
Financial Literacy ◽  
Financial Services ◽  
Deposit Insurance ◽  
Banking Sector ◽  
Banking System ◽  
Institutional Development ◽  
Expert Assessment ◽  
Credit Risks ◽  
Depth Analysis ◽  
The Impact

Aim. The presented study aims to perform a comprehensive and in-depth analysis of problems and risks in the banking sector of Azerbaijan and to develop recommendations for improving the efficiency and reliability of its functioning in accordance with national interests.Tasks. The author shows the key problems and risks in the country’s banking sector, focusing on dollarization as the main risk; investigates the content and causes of dollarization; examines new trends, particularly the impact of the COVID-19 pandemic on the banking sector of Azerbaijan.Methods. A systems approach to identifying the major factors affecting the development of the banking sector in Azerbaijan serves as the methodological basis of this study. The author also uses the methods of scientific analysis, such as the statistical method, comparative, fundamental, and functional analysis, and expert assessment. The study reflects the ideas set forth in the scientific works of economists on the problems of the institutional development of the banking system in the country under consideration.Results. According to the results of the study, the patterns and current problems in the development of the banking sector of Azerbaijan after the devaluation of 2015 are identified. Its major risks and current state are analyzed, and the reasons for the dollarization of the economy as the main channel of risk for the banking sector of Azerbaijan are determined. In addition, the impact of the COVID-19 pandemic on this sector is analyzed.Conclusions. Positive and negative aspects are identified by performing a risk analysis of the banking sector of Azerbaijan. On the positive side, there are large strategic monetary reserves, a relatively low level of public debt, a single authority for regulating and supervising financial markets, basic risk management elements, and full deposit insurance. The vulnerabilities of the banking sector of Azerbaijan include fragile capital positions of the banking system, high credit risks of banks, low capitalization of banks, lack of legal mechanisms for regulating and selling non-performing assets, lack of effective tools for the rehabilitation and restructuring of banks, weak corporate governance in the financial services sector, low financial literacy, increased monetary and credit risks in the banking sector.

scholarly journals The level of financial inclusion in Ukraine: Measuring access, quality, and usage of financial products and services

2021 ◽  
Vol 16 (2) ◽  
pp. 59-67
Author(s):  
Yuliia Shapoval ◽  
Andrii Shkliar ◽  
Oleksii Shpanel-Yukhta ◽  
Kateryna Gruber
Keyword(s):  
Financial Literacy ◽  
Financial Services ◽  
Banking Sector ◽  
Global Financial Crisis ◽  
Banking System ◽  
Financial Inclusion ◽  
Clear Understanding ◽  
Financial Products ◽  
Medium Level ◽  
The Global Financial Crisis

While financial inclusion is seen as a goal of socio-economic development, there is still no clear understanding of how to measure it. Following this concern, the paper deals with the computation of the financial inclusion index of the Ukrainian economy using an annual dataset spanning from 2008 to 2020 and following the Sarma methodology. The object of the study is a set of indicators of usage, access and quality of financial products and services. The obtained results demonstrate the medium level of financial inclusion. The improvement of financial inclusion is observed in 2012, 2013, 2020 (namely 0.55 – 0.56 in the range of 0 and 1). From 2015 (0.38) till 2018 (0.39), the revealed downward trend affirms that the withdrawal of banks from the market has deteriorated the level of quality and usage of financial products and services. Financial inclusion declined during the cleaning up of the banking system in 2014–2016, just as it did after the global financial crisis in 2009–2010. Despite the development of the payment infrastructure, there is a need to diversify access, increase quality, and quicken the usage of financial products and services due to existing distrust in national financial institutions. Improving financial literacy and consumer protection, and closing regulatory gaps in the non-banking sector are seen as ways to enhance financial inclusion. Thus, financial regulators should establish an upward trend in financial inclusion that will ensure full access to formal financial services and will not adversely affect the stability of financial system.

scholarly journals Digital Finance and the Future of Nigerian Banking System: A Review

2020 ◽  
Vol 6 (16) ◽  
pp. 24-35
Author(s):  
Gbenga F. Babarinde ◽  
◽  
Matthew O. Gidigbi ◽  
Julius T. Ndaghu ◽  
Idera T. Abdulmajeed ◽  
...  
Keyword(s):  
Financial Services ◽  
Banking Sector ◽  
Banking Industry ◽  
Banking System ◽  
Financial Service ◽  
Digital World ◽  
Services Delivery ◽  
The Future ◽  
The Impact ◽  
Nigerian Banking

Digital finance is a type of financial service that employs digital products like personal computers, the internet, mobile phones, cards linked to a digital payment system. Innovations in the digital world cannot be divorced from Nigerian financial services most notably the banking sector. Therefore, it means that banking industry cannot but embrace digital innovations in their services delivery. Hence, there is a need to review the impact of digital finance in the Nigerian banking sector. Desk research method was used to examine how innovations in the digital world could impact the future financial service delivery in the Nigerian banking sector. From the review, it was that the digital world is quickly changing and this impacts banking in all ramification. It is recommended that the banking industry should try to keep pace with the digital innovations, for them to be able to meet up the demands of their digitally-savvy customers.

SISTEM KOORDINASI ANTARA OTORITAS JASA KEUANGAN (OJK) DENGAN LEMBAGA PENJAMIN SIMPANAN (LPS) DALAM PENANGANAN BANK GAGAL

2017 ◽  
Vol 6 (1) ◽  
pp. 1
Author(s):  
WIWIN WINTARSIH WINDIANTINA
Keyword(s):  
Economic Growth ◽  
Financial Services ◽  
Deposit Insurance ◽  
Banking Sector ◽  
Banking Industry ◽  
Financial Service ◽  
Financial Service Authority ◽  
Insurance Agency ◽  
Financial Transactions ◽  
The Impact

ABSTRACTThe banking industry is a dynamic sector along with economic growth, an increasing of complex financial transactions, and the impact from global trade, therefore the presence of an independent institutions is really needed. The Deposit Insurance Agency (LPS) is an institution that is independent, transparent and accountable in implementing its duties and authorities. As an independent agency, accountability is very important to be applied, so that stakeholders aware of what and how LPS implement the functions and duties as mandated by Law No. 24 of 2004 concerning the Deposit Insurance Agency (LPS). Procedurally, if the Financial Services Authority (OJK) indicate a bank that is experiencing liquidity problems, Financial Services Authority (OJK) immediately inform the Bank of Indonesia (BI) to take steps in accordance with BI's authority. In practise, Financial Service Authority (OJK) coordinate withBank of Indonesia (BI) to make regulatory supervision in banking sector. Coordination in handling between failed banks between the Deposit Insurance Agency (LPS) and Financial Services Authority (OJK) is shown by a confirmation from Financial Services Authority (OJK) to the Deposit Insurance Agency (LPS) about troubled banks that are in the restructuring efforts by Financial Services Authority (OJK), then the Deposit Insurance Agency (LPS) investigate the banks in accordance with its functions, duties and responsibilities. The Deposit Insurance Agency (LPS) as an institution that checks condition of banks surely will review and determine whether the troubled banks will be saved or not saved.

scholarly journals FINTEH IN THE FINANCIAL SYSTEM OF INCLUSIVENESS

2018 ◽  
pp. 100-120 ◽  
Author(s):  
Bohdan LUTSIV
Keyword(s):  
Economic Development ◽  
Financial Services ◽  
Banking Sector ◽  
Banking System ◽  
Inclusive Development ◽  
Social Orientation ◽  
Inclusive Growth ◽  
Market Demand ◽  
The World ◽  
The Impact

Introduction. The middle of 2000 years witness the shift in traditional economic development models to the concept of inclusive growth. The significant stratification of society and the growth of the share of the poor population due to financial and economic crises are the prerequisites for changing the paradigm of economic development of countries. According to the index of inclusive economic development (IDI) of 2018, published on the website of the World Economic Forum, Ukraine ranks 43rd among 74 developing countries. The introduction of the latest financial technologies in the banking system in recent years has significantly improved the qualitative characteristics of financial inclusiveness. The financial services market has radically changed. The boom of Finteh-startups is supported by smartphone population and penetration into all spheres of society of the fast Internet society. The purposeof the article is to assess the impact of financial technologies on the inclusive development of Ukraine in terms of banking sector cooperation with startup companies on the financial services market. Results. Concepts on the further development of the world economy in the long-term perspective are considered. Based on the analysis of modern economic literature, key points of inclusive growth are identified. In this context, the focus of the study is on financial inclusiveness. The emphasis is on strengthening the financial inclusiveness of the population in the adopted Strategy of the NBU by 2020. The most current trends of FinTeh in the world are described and the factors of development of FinTeh in Ukraine are analyzed. The given feature is the latest types of Finteh start-ups, challenges for the development of the FinTeh-market in Ukraine. Conclusions. The development of scientific thought and understanding of the transformation of social processes led to the transition from the concept of economism growth to the concept of inclusive development. The concept of inclusive development of the country is only part of the scientific discourse. Financial inclusiveness has not only financial but also social orientation. In Ukraine, FinTeh is in its infancy, the development of which is supported by a variety of initiatives and activities of the NBU. Given the current market demand, FinTeh solutions that are focused on financial inclusiveness and the mass market have the greatest potential for growth.

scholarly journals Assessing the Impact of Corporate Governance Index on Financial Performance in the Romanian and Italian Banking Systems

2021 ◽  
Vol 13 (10) ◽  
pp. 5535
Author(s):  
Marco Benvenuto ◽  
Roxana Loredana Avram ◽  
Alexandru Avram ◽  
Carmine Viola
Keyword(s):  
Corporate Governance ◽  
Financial Performance ◽  
Banking Sector ◽  
Research Question ◽  
Interactive Effect ◽  
Banking System ◽  
Capital Adequacy ◽  
Banking Systems ◽  
Governance Index ◽  
The Impact

Background: Our study aims to verify the impact of corporate governance index on financial performance, namely return on assets (ROA), general liquidity, capital adequacy and size of company expressed as total assets in the banking sector for both a developing and a developed country. In addition, we investigate the interactive effect of corporate governance on a homogenous and a heterogeneous banking system. These two banking systems were chosen in order to assess the impact of corporate governance on two distinct types of banking system: a homogenous one such as the Romanian one and a heterogeneous one such as the Italian one. The two systems are very distinct; the Romanian one is represented by only 34 banks, while the Italian one comprises more than 350 banks. Thus, our research question is how a modification in corporate governance legislation is influencing the two different banking systems. The research implication of our study is whether a modification in legislation, thus in the index of corporate governance, is feasible for two different banking sectors and what the best ways to increase the financial performance of banks are without compromising their resilience. Methods: Using survey data from the Italian and Romanian banking systems over the period 2007–2018, we find that the corporate governance has a significant, positive and long-lasting effect on profitability and capital adequacy in both countries. Results: Taking the size of the company into consideration, the impact of the Index of Corporate Governance (ICG) on a homogenous banking system is positive while the impact on a heterogeneous banking system is negative. Conclusions: Our study provides evidence of the impact of IGC on financial performance and sheds light on the importance of the size of the company. Therefore, one can state that the corporate governance principles applied do not encourage the growth of large banks in heterogeneous banking sectors, thereby suggesting new avenues of research associated with new perspectives.

IMPROVING THE EFFICIENCY OF USING INFORMATION AND COMMUNICATION TECHNOLOGIES IN THE BANKING SYSTEM

2021 ◽  
Vol 4 (4) ◽  
pp. 41-46
Author(s):  
Ra’no Parpieva ◽  
◽  
Nafisa Norboyeva ◽  
Adiba Turayeva
Keyword(s):  
Information And Communication Technologies ◽  
Information Technologies ◽  
Banking Sector ◽  
Banking System ◽  
Modern Society ◽  
Communication Technologies ◽  
Payment Systems ◽  
Information And Communication ◽  
Effective Use ◽  
The Impact

This article will serve to select the system required for the effective use of information and communication technologies in the banking system and the impact of national payment systems in the banking sector on modern society, the effective use of new modern information technologies in the system.Study of foreign experience to select information and communication technologies that should be used in modern banks with information and communication technologies in the banking system, which have been used before.

COVID -19 and Indian Financial Markets: A Review

2020 ◽  
Vol 16 (02) ◽  
pp. 1-8
Author(s):  
Kamaldeep Kaur Sarna
Keyword(s):  
Financial Markets ◽  
Financial Institutions ◽  
Financial Services ◽  
Stock Markets ◽  
Global Economy ◽  
Banking Sector ◽  
Global Financial Crisis ◽  
Negative Impact ◽  
Management Strategies ◽  
The Impact

COVID-19 is aptly stated as a Black Swan event that has stifled the global economy. As coronavirus wreaked havoc, Gross Domestic Product (GDP) contracted globally, unemployment rate soared high, and economic recovery still seems a far-fetched dream. Most importantly, the pandemic has set up turbulence in the global financial markets and resulted in heightened risk elements (market risk, credit risk, bank runs etc.) across the globe. Such uncertainty and volatility has not been witnessed since the Global Financial Crisis of 2008. The spread of COVID-19 has largely eroded investors’ confidence as the stock markets neared lifetimes lows, bad loans spiked and investment values degraded. Due to this, many turned their backs on the risk-reward trade off and carted their money towards traditionally safer investments like gold. While the banking sector remains particularly vulnerable, central banks have provided extensive loan moratoriums and interest waivers. Overall, COVID-19 resulted in a short term negative impact on the financial markets in India, though it is making a way towards V-shaped recovery. In this context, the present paper attempts to identify and evaluate the impact of the pandemic on the financial markets in India. Relying on rich literature and live illustrations, the influence of COVID-19 is studied on the stock markets, banking and financial institutions, private equities, and debt funds. The paper covers several recommendations so as to bring stability in the financial markets. The suggestions include, but are not limited to, methods to regularly monitor results, establishing a robust mechanism for risk management, strategies to reduce Non-Performing Assets, continuous assessment of stress and crisis readiness of the financial institutions etc. The paper also emphasizes on enhancing the role of technology (Artificial Intelligence and Virtual/Augmented Reality) in the financial services sector to optimize the outcomes and set the path towards recovery.

FIFA – highlighting the links between global banking and international money laundering

2018 ◽  
Vol 21 (4) ◽  
pp. 498-512 ◽  
Author(s):  
Mohammed Ahmad Naheem
Keyword(s):  
Money Laundering ◽  
Financial Services ◽  
Banking Sector ◽  
Due Diligence ◽  
Content Type ◽  
Services Sector ◽  
Financial Services Sector ◽  
Global Banking ◽  
Beneficial Ownership ◽  
The Impact

PurposeThis paper uses the recent (August 2015) FIFA arrests to provide an example of how illicit financial flows are occurring through the formal banking and financial services sector. The purpose of this paper is to explore which elements of anti-money laundering (AML) compliance need to be addressed to strengthen the banking response and reduce the impact of IFFs within the banking sector.Design/methodology/approachThe paper is based on the indictment document currently prepared for the FIFA arrests and the District Court case of Chuck Blazer the FIFA Whistleblower. It uses the banking examples identified in the indictment as typologies of money laundering and wire fraud. Corresponding industry reports on AML compliance are included to determine where the major weaknesses and gaps are across the financial service.FindingsThe main findings from the analysis are that banks still have weak areas within AML compliance. Even recognised red flag areas such as off shore havens, large wire transfers and front companies are still being used. The largest gaps still appear to be due diligence and beneficial ownership information.Research limitations/implicationsThe research topic is very new and emerging topic; therefore, analysis papers and other academic writing on this topic are limited.Practical implicationsThe research paper has identified a number of implications for the banking sector, addressing AML deficiencies, especially the need to consider the source of funds and the need for further enhanced due diligence systems for politically exposed and influential people and the importance of beneficial ownership information.Social implicationsThis paper has implications for the international development and the global banking sector. It will also influence approaches to AML regulation, risk assessment and audit within the broader financial services sector.Originality/valueThe originality of this paper is the link between the emerging issues associated with allegations of bribery and corruption within FIFA and the illicit financial flow implications across the banking sector.

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