The advantages of innovations in salary and pension payments
The procedure for paying salaries and pensions may change in Azerbaijan. According to a new proposal, salaries and other payments to employees will be transferred via an electronic payment system to a bank account chosen independently by them.
What benefits does this innovation promise?
According to Day.Az, economist Elchin Rashidov stated this in an interview with Globalinfo.az. He noted that there is currently a banking monopoly in the country's pension payment sector.
"The Chairman of the Central Bank of Azerbaijan, Taleh Kazimov, also spoke about this during a meeting with us. If pensioners are given the opportunity to receive pensions through different banks, this will first of all provide them with convenience. People will be able to choose a bank located closer to them. In addition, queues at ATMs of a single bank will decrease, as the workload will be distributed among different financial institutions. Thus, the banking monopoly will also be eliminated.
As a rule, people more often take out loans, use other banking services, and prefer cards of the banks through which they receive their salary or pension. In this regard, connecting other banks to the system will provide them with equal competitive opportunities," the economist noted.
According to Rashidov, the decision on the procedure for paying salaries is made by the enterprises themselves.
"The choice of which bank to cooperate with and through which to transfer salaries remains with the enterprise. Therefore, we cannot speak of a monopoly by any specific bank on a nationwide scale in this area. At the same time, due to certain factors, individual banks may gain an advantage in servicing salary projects. This process can even be influenced by opaque mechanisms, various kinds of pressure, or the interests of individuals.
Connecting other banks to the system will allow salary recipients to independently choose the most convenient bank for them, including one located closer to their place of residence. At the same time, competitive conditions between banks will become more equal, which will have a positive impact on the banking sector as a whole," he explained.
The economist also noted that companies might suffer to a certain extent from the changes.
"If previously an enterprise transferred salary funds through a single bank, now it will have to cooperate with several banks at once. Under the former system, companies working with one bank received discounts on certain services, enjoyed more convenient service, and simplified accounting. The new rules may increase the workload on accounting departments and lead companies to lose certain benefits," Rashidov added.
