Tuesday, February 24 2015 18:02

 At today's session of the Armenian Parliament, MP from the Armenian National Congress faction, ex-Prime Minister Hrant Bagratyan strongly criticized the policy of the Armenian Central Bank, which made a decision on Dec 30 2014 to tighten the minimum total capital standard for commercial banks to 30 bln AMD (versus the current 5 bln AMD) starting from 1 Jan 2017. Bagratyan believes that the CB's steps hinder the SME development.     

"In Russia one needs 4 mln USD to open a bank, in Armenia one needs 60 mln USD. How is it possible to develop small business?! The CB intentionally hinders the opening of small banks. If the lending rises, increase the capital. Why should you make the banks leave the market and why should you leave hundreds of people without a job?!" he said.    
He said that the CB's decision has already affected the economic growth rates in January and these rates promise nothing good. 

To recall, January had economic decline not only in 2015, but also in the previous years.  

To note, starting January 1 2017, a new standard of minimal total capital - 30 billion drams versus current 5 billion drams - will be introduced in the banking system of Armenia. The Central Bank Council made the given amendment to the provision 2 of the Law "On Regulation of the activity of banks and basic economic standards of the banking activity" on 30 December 2014.  The amendment will apply to all the participants in the banking system of Armenia. The banks have enough time to meet the new requirements. This tightening will lead to merger of banks and bigger actors will emerge in the banking sector, which, in turn, will ensure a higher quality and more accessible banking services and health- competition.  In addition, the banking sector will become more efficient and stable. Favorable environment will be created for introduction of new technologies and products, which will help involving Armenian banks into the international equity market and creating a basis for further enhancement of cooperation. The banks will become more flexible and resistant to economic shocks. This will promote also financial mediation