Historical Development of the Azerbaijan's Banking System
Nigar Jabrayilsoy 
Abstract. The historical development of Azerbaijan's banking system reflects the broader political, economic, and social transformations of the country. The foundations of formal banking in Azerbaijan were laid in the late 19th and early 20th centuries during the period of the Azerbaijan Democratic Republic, which sought to establish national financial institutions to support economic growth. In 1919, alongside the creation of other state institutions, early banking frameworks were introduced, primarily focused on credit provision and currency stabilization for trade and public services. The banking system of the Azerbaijan Democratic Republic, in addition to being the first in this field, was also the foundation of independence in the financial sector in our country. With the incorporation of Azerbaijan into the Soviet Union in 1920, the banking system underwent centralization and state control. Banks were integrated into the Soviet financial apparatus, and their operations were closely linked to the planned economy. During this period, financial institutions mainly served as instruments for implementing state economic policies, including industrial and agricultural development. While this system expanded access to financial services and strengthened technical capacity, it limited the independence of banking institutions and constrained the development of modern financial instruments.
Keywords: Azerbaijan banking system, Central Bank of Azerbaijan, financial reforms, digital banking, economic transition