Friday, February 27 2015 21:17

The opponents having no sufficient information about the Armenian Central Bank's decision to increase the commercial banks' minimum total capital standard from the current 5 bln AMD to 30 bln AMD by 2017 have recently been voicing generalized statements and comments on it. The CB press service has told ArmInfo that in some cases the comments of the opponents, who intentionally manipulate the situation, ungroundedly whip up the citizens' concerns. The CB thinks that manipulation on the banks' names allegedly for their own safety is especially inadmissible.      

The CB believes that the tangible growth in the specified standard is aimed at maintaining the Armenian banking system's reliability, ensuring stability in the banking sector and deepening financial mediation.  The source points out that the given measure does not at all aim to close some banks or reduce the number of the banks.    

Before taking the relevant decision, the Central Bank had repeatedly discussed that issue with the shareholders and heads of the commercial banks, which expressed readiness to meet the new requirement.  Several banks have already replenished their capitals, increasing them to the standard level of 2017.    

Not a single bank in Armenia causes the Central Bank's concerns about possible failure to meet the new requirement. "The banking system of Armenia is stable and meets all international standards. So, the customers of the banks have nothing to worry about. Only enhancement of the service quality should be in the focus of their expectations", says the source.   

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.