BAKU, Azerbaijan, October 15. In Azerbaijan,
banks are required to analyze customer transactions and set
appropriate limits to prevent risky transactions, including money
transfers related to illegal gambling, the Executive Director of
the Central Bank of Azerbaijan, Shahin Mahmudzade, said at a press
conference on Thursday dedicated to the presentation of the
Financial Stability Report, Trend's correspondent reports from the event.
He added that the Central Bank of Azerbaijan (CBA) sets general
requirements in this area, while the application of specific limits
depends on each bank’s own risk assessment.
According to him, under the Central Bank’s requirements, banks
must identify risks such as money laundering, illegal gambling, and
funds of unknown origin entering the banking system.
“We require banks to identify high-risk transactions. A bank
must know its customers and analyze the number, volume, and nature
of their day-to-day transactions. Banks set specific limits on
their own. During supervisory inspections, we verify whether
high-risk transactions are being identified and whether the bank is
taking the necessary measures to mitigate these risks,” Mahmudzade
noted.
The CBA representative emphasized that banks’ coordination of
uniform limits among themselves for certain types of transactions
is also aimed at reducing risks. At the same time, each bank may
apply additional control mechanisms, taking into account the
specific characteristics of its customers’ transactions.
According to him, exceeding the fixed limit does not mean that
the transaction is automatically illegal. In such cases, the bank
may review the customer’s transactions and assess their nature.
“When a customer contacts the bank and explains the nature of
the transactions, the bank can make a decision based on its own
assessment. In this case, the key is to correctly identify risks
and ensure oversight of suspicious transactions,” he noted.
Mahmudzade added that imposing limits on financial transactions
can, in certain cases, cause inconvenience for customers. However,
the effectiveness of such restrictions should be evaluated by
considering both the difficulties they create and their potential
benefit to society.
“Any regulation imposes certain restrictions. However, it is
necessary to weigh the overall benefit against the potential harm.
We believe that the benefits to society from the limits set by
banks outweigh the associated inconveniences. After all, as a
result of illegal gambling and similar activities, many families
may face serious financial problems,” the CBA’s executive director
emphasized.
He noted that banks’ responsibility for risk management is not
limited to setting limits. Financial institutions must continuously
monitor transactions, promptly identify suspicious activity, and
take appropriate control measures.
