OREANDA-NEWS. August 24, 2010.  Objective obstacles to establishment of a specialized agrarian (agro-industrial) bank in Azerbaijan have been eliminated.

The  governmental sources informed Fineko/abc.az, only the global financial crisis has impeded  creation of such bank,  that was envisaged  in the  government program of food safety development.

“If the crisis did not  influence negatively  on the financial market, the issue of establishment of the  agrarian bank would be already considered and resolved. Nevertheless, development of the country’s financial market doesn’t allow to hope today that specialized bank will replace commercial banks, and decisions on creation of agrarian bank are the most actual today,” source informed.

It  was initially planned to create the new bank on the basis of non-bank credit organization Aqrar-Kredit with attraction of external technical and financially investment support from abroad.

“We, as the Rosselhozbank, observe  closely development of process of creation of the  agrarian bank and we hope that the country’s government and the Aqrar-Kredit will reach a  positive decision,” a representative of the Rosselhozbank in Azerbaijan Bakhtiyar Agayev said Fineko/abc.az.

“The main issue here – privatization of  Aqrar-Kredit at transformation in the bank. Consultations concerning  this issue are carried out  with the World Bank (WB), the International Finance Corporation (IFC), the European Bank for Reconstruction and Development (EBRD) and others. The decision should be taken by shareholders – the Ministry of Finance and the Ministry of Economic Development, but demand for the  special bank for agrarian sector is available ” M. Musayev said.

Earlier, the Credit Agricole, the Rosselhozbank and other agrarian banks of the world expressed preparedness to render the technical assistance in setting  up  specialised agrarian bank, transfer of experience and others.

Earlier, it was intended to transform the Aqrar-Kredit into bank by sale of equity participation to a foreign investor. Today, capital of the organization by 100% belongs to the Azerbaijani government. However, in connection with global financial crisis those 2-3 European banks, with which negotiations were held concerning subject of participation in privatization of equity stake in capital of the organization, stopped this process.

IFC has kept interest to participation in the process longer than all the others.

Earlier, the EBRD Credit Committee gave its consent on the beginning of talks with the Azerbaijani government on acquisition of the Aqrar-Kredit’s shares. The subject of talks is purchase of 25%+1 share of the organization.

In accordance with preliminary scheme of privatization, 25% stake in the Aqrar-Kredit will be privatized primarily and then full privatization will take place.

In accord with international practice it is planned to establish a private bank, which will render services to agrarian sector.