Royal Bank was a private commercial bank established as ÖZ BANK on 2 August 1993. The bank provided financial services for individual customers, small- and mid-size businesses. The last supervisory board took the control over the bank in 2004 and initiated a program on restructuring the financial and control systems.
Royal Bank was included into the Baku Stock Exchange in 2006. It had 32 regional branches including the branches in Baku.
On 12 July 2012, Central Bank of Azerbaijan cancelled the license of Royal Bank due to the unfulfilled liabilities and the written notifications of the Central Bank. On 2 August 2012, the Administrative Economic Court in Baku announced that Royal Bank went bankrupt.
Credit (from Latincredit, "(he/she/it) believes") is the trust which allows one party to provide money or resources to another party where that second party does not reimburse the first party immediately (thereby generating a debt), but instead arranges either to repay or return those resources (or other materials of equal value) at a later date. The resources provided may be financial (e.g. granting a loan), or they may consist of goods or services (e.g. consumer credit). Credit encompasses any form of deferred payment. Credit is extended by a creditor, also known as a lender, to a debtor, also known as a borrower.
Credit does not necessarily require money. The credit concept can be applied in barter economies as well, based on the direct exchange of goods and services. However, in modern societies, credit is usually denominated by a unit of account. Unlike money, credit itself cannot act as a unit of account.
Movements of financial capital are normally dependent on either credit or equity transfers. Credit is in turn dependent on the reputation or creditworthiness of the entity which takes responsibility for the funds. Credit is also traded in financial markets. The purest form is the credit default swap market, which is essentially a traded market in credit insurance. A credit default swap represents the price at which two parties exchange this risk–the protection seller takes the risk of default of the credit in return for a payment, commonly denoted in basis points (one basis point is 1/100 of a percent) of the notional amount to be referenced, while the protection buyer pays this premium and in the case of default of the underlying (a loan, bond or other receivable), delivers this receivable to the protection seller and receives from the seller the par amount (that is, is made whole).