Document from CIS Legislation database © 2003-2023 SojuzPravoInform LLC

The document ceased to be valid according to Item 1 of the Resolution of Board of the Central Bank of the Azerbaijan Republic of December 25, 2018 No. 25/2


in the Ministry of Justice

Azerbaijan Republic

On November 16, 2004 No. 3090 

Approved by Board decision of National Bank of the Azerbaijan Republic of November 3, 2004 the Protocol No. 19

Procedural Rules of carrying out bank checks

I. General provisions

These rules are prepared according to the Laws of the Azerbaijan Republic "About banks", "About National Bank of the Azerbaijan Republic" and establish procedural rules of the organization and conducting bank checks by National Bank (further - National Bank) the Azerbaijan Republic in banks and local branches of foreign banks (further - banks).

2. Purpose and tasks of checks

2.1. Main objective of the checks which are carried out by National Bank in banks is assessment of conformity of their activities to the legislation of the Azerbaijan Republic, including observance of acts of normative nature of National Bank, reliability of accounting, risk management, system effectiveness of internal control, financial condition of bank and the prospects of field operations based on source documents, and also identification of the activities of bank capable to pose threat to interests of creditors and investors.

2.2. Check provides accuracy of the information about activities of banks and allows to carry out the analysis of various important issues connected with banks, and in particular, conditions of management.

3. Frequency, planning, types and terms of checks

3.1. The National Bank of times a year makes check in each bank. If based on the analysis of the prudential reporting, and the reporting of bank statistics, and also other information from reliable sources cases of emergence of threat of loss of bank assets, including sharp, or long deterioration in the indicators characterizing quality of bank assets and financial condition, considerable or long deterioration in the liquid means necessary for execution of bank liabilities, or payments, conditions in bank system, capable to create threat for prudential management come to light and also for the purpose of investigation of the facts of violation of the law the National Bank can make additional (unplanned) checks in banks. The National Bank also according to the principle of interaction makes additional (unplanned) checks in banks based on requests of regulating authorities and control of foreign banks, and also the become effective judgments.

3.2. Check of activities of bank can be comprehensive (complex) or target (thematic).

3.2.1. Comprehensive check is the detailed check covering all spheres of activity of bank for assessment of the capital, assets, managements, the income, liquidity and risk exposure and also establishments of compliance of its activities to the bank law;

3.2.2. Target (thematic) checks are the checks directed to specific area or kind of activity of bank.

3.3. The annual schedule of scheduled inspections affirms the authorized officer of National Bank responsible for area of banking supervision (further - the authorized officer of National Bank).

3.4. The decision on additional (unplanned) checks is made by the authorized officer of National Bank based on the petition of the head of the structural unit of the National Bank performing function of banking supervision in the cases provided in Item 3.1 of these rules.

3.5. Checks are made by the structural division of National Bank performing function of banking supervision. In case of need specialists of other structural divisions of National Bank can be involved in checks.

3.6. Frequency of comprehensive check term from end date of the last check made in bank before the next check is considered.

3.7. Verification process of bank is considered begun from the date of representation of the checking certificate to the bank administrator.

3.8. Check of banking activity is made within 45 (forty five) calendar days. The term of checks can be extended to 30 (thirty) banking days by the authorized officer of National Bank which signed the checking certificate.

3.9. Checks are made in the working days and in working hours of bank.

3.10. Verification process of bank is considered come to the end in day of representation to bank of the report on check signed by checking group according to the procedure, stipulated in Item 8.8 these rules.

4. Preparation for check

4.1. Verification process of bank begins with preliminary preparatory work. At this stage the type of check which will be made in bank, and the covered areas, and also its time, term and other questions connected with check is established.

4.2. Check of bank can be made by the prior notice by its National Bank, or without notice.

4.3. The prior notice of check of bank is shown to bank in 10 (ten) calendar days prior to check in the form of the notice in writing. In the notice date, the type of check and the covered period are specified.

4.4. In case of need of urgent checks, including checks directed to investigation of cases of removal of bank assets, sharp deterioration in the indicators characterizing quality and financial condition of bank assets, non-executions of obligations and payments, and also money-laundering from the point of view of state security, financing of terrorism, check, connected with questions observance of the mode of elective accounts can be made by National Bank without prior notice.

4.5. For check of bank the group of check is created. The structure and number of group depends on check type (comprehensive and target), the size of bank and amount of the forthcoming work and its nature. The structure checking based on the principle of reciprocity can include the staff of regulating authorities and control of other country with which the National Bank signed the agreement on cooperation in the field of checks.

4.6. Persons which are part of group of check shall not have direct or indirect family relations and commercial interests with bank which is subject to check. Persons having similar communications and interests shall report about it to the authorized officer of National Bank, and similar persons shall not join in group of check.

4.7. The group of check is headed by her head. The head of group is appointed in 15 (fifteen) calendar days prior to check.

4.8. The head of group prepares "the order on check" and "work plan" of group. In "the order on check" areas of banking activity which will be subjected to check are determined. "Work plan" of group reflects distribution of functions among each member of group, the instructions connected with necessary actions and the program of activities of group during check. In the work plan time necessary for the solution of these or those questions is planned and distributed.

"The order on check" and "work plan" of group affirms the head of the structural unit of the National Bank performing function of banking supervision.


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