Document from CIS Legislation database © 2003-2024 SojuzPravoInform LLC


On May 2, 2000 No. 876-IQ

About credit unions

(as amended on 26-12-2023)

This Law establishes economic, legal and organizational basis of creation and activities of credit unions in the Azerbaijan Republic.

Chapter I. General provisions

Article 1. Concept of credit union

1. The credit union is the non-bank credit institution created by the physical persons and (or) legal entities which are the small business entities which are voluntarily uniting on the basis of community of interests for mutual lending by concentration of the free money.

2. Mutual lending is the short-term and long-term loan issued at the expense of the funds raised in credit union for payment of economic and social needs of his members.

3. The credit union has own property, can acquire on its own behalf the property and non-property rights, to be claimant and the defendant in court.

4. Provisions of this Law extend also to credit cooperatives, except as specified establishments of other rule the Law of the Azerbaijan Republic "About agricultural cooperation".

Article 2. Legislation on credit unions

2.1. The legislation on credit unions consists of the Constitution of the Azerbaijan Republic, this Law, the Civil code of the Azerbaijan Republic, the Law of the Azerbaijan Republic "About non-bank credit institutions" and other legal acts of the Azerbaijan Republic.

2.2. The relations in the sphere of credit unions in the Alyatsky free economic zone are governed according to requirements of the Law of the Azerbaijan Republic "About the Alyatsky free economic zone".

Article 3. Basic principles of activities of credit union

1. Treat the basic principles of activities of credit union:

1.1. Consolidation of members on the basis of community of interests and mutual trust;

1.2. Voluntariness of membership;

1.3. Publicity of activities;

1.4. Coordination of private interests with collective interests;

1.5. Equality of members irrespective of the size of shares;

1.6. Personal participation of members in management of credit union;

1.7. The direction of the received funds for business activity;

1.8. The Osnovyvany organizations of activities on self-checking.

2. The credit union is forbidden to attract deposits from legal entities and physical persons.

Article 4. Rights and obligations of credit union

1. The credit union has the right:

1.1. Obtain the credit, grant in banks, the international and foreign financial and credit structures;

1.2. Issue in the procedure specified by the charter the credits to the members taking into account requirements of the Civil code of the Azerbaijan Republic;

1.3. Make free money on the deposit in banks, and also spend them for acquisition of government securities.

2. Credit unions perform the obligations provided tax and other legislations of the Azerbaijan Republic.

Article 5. State and credit unions

1. The state takes measures for creation and stimulation of activities of credit unions.

2. After the constituent assembly the credit union undergoes state registration as the legal entity in the procedure corresponding to the legislation of the Azerbaijan Republic.

3. If the credit union in the time established by the legislation did not undergo state registration, it is considered not founded and shares within 15 days are subject to return.

4. In case of refusal in state registration of credit union founders can take a legal action. In this case the term of return of shares can be prolonged before the judgment.

5. The state does not answer for obligations credit union, and credit union - for obligations of the state.

6. The state guarantees protection of legitimate rights and interests of credit unions and their members.

7. The damage caused to credit union as a result of actions (failure to act) of public authorities is compensated by the specified bodies.

8. For issuance of credits according to article 4 of this Law the credit union in the procedure established by the legislation  shall obtain the license from the Central bank of the Azerbaijan Republic (further - the Central bank).

9. In case of refusal in licensing, the Central bank, shall motivate the refusal. The refusal in licensing can be considered in court based on the statement of founders.

10. Central Bank, can establish to credit union standard rates of economic regulation and the requirement to professional suitability of board members, and also to apply to it sanctions:

10.1. Require implementation of the measures directed to elimination of the revealed violations;

10.2. Stop action of the license or cancel it.

11. The measures for supervision of activities of credit unions including performed for this purpose are performed by the Central bank according to the Law of the Azerbaijan Republic "About the Central bank of the Azerbaijan Republic".

Chapter II. Creation of credit union and membership in credit union

Article 6. Creation of credit union

1. The credit union is established in stipulated by the legislation procedure at least than 11 by physical and (or) legal entities.

2. The constituent assembly of credit union makes the decision on creation of credit union, approves the charter, elects governing body and control.

Article 7. Charter of credit union

1. In the charter of credit union it is specified:

1.1. Name and address of credit union;

1.2. Purpose, object of activity of credit union;

1.3. Regulations of Admission in credit union members and exit from membership, and also the basis for exception of membership;

1.4. Rights, obligations and responsibility of credit union members;

1.5. Terms of office of governing bodies of credit unions;

1.6. Rules of convocation of extraordinary general meeting;

1.7. Rules of compensation of the damage caused to credit union by his members;

1.8. The amount of the minimum share in credit union, procedure, term of its payment and responsibility for their violation;

1.9. Creation of property of credit union and use of the income;

1.10. Conditions and rules of receipt of the credit by members;

1.11. Governing bodies and control of credit union, their power, rule of creation and adoption of the decision by them;

1.12. Creation of funds of credit union;

1.13. Rules of suspension of activities and liquidation of credit union;

1.14. Rules of return of share in case of the membership termination;

1.15. Other questions connected with activities of credit unions which are not contradicting the legislation also can be provided in the charter.


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