AzFina: Older generations still distrust banks

In Azerbaijan, older generations still distrust banks, Edgar Abdullayev, chairman of the Board of the Azerbaijan Fintech Association (AzFina), said in response to CBA Chairman Taleh Kazimov's statement that approximately $10 billion is being kept "under the pillow," Report informs.

According to Abdullayev, banks and other financial institutions do not yet have sufficient tools to attract funds held by the population. He cited the excessively high volume of cash in circulation as the main problem.

"About 17 billion manats are held in cash in people's homes, store cash registers, and other places. This means that banks are unable to attract these funds for investment. Certainly, 6-7 billion manats in cash should remain in the economy, but the remaining 10-11 billion manats should be returned to circulation," he noted.

Trust is the key to solving this problem, he said.

"Many people, especially the older generation, retain negative memories and experiences associated with the events of 30 years ago, including the history of Vahid Bank. This is why they still distrust the banking system," Abdullaev emphasized.

Vahid Bank, an Azerbaijani private bank that went bankrupt in the mid-1990s, was widely considered a financial pyramid scheme by experts and the public. Its collapse resulted in significant financial losses for many depositors, whose savings were never returned.

($1=1.7 manats)