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.
