Armenia strengthening security of bank deposits

17.05.2010 21:28
Armenia strengthening security of bank deposits

YEREVAN, May 17. /ARKA/. On Monday, Armenian lawmakers amended at the first reading the law on safeguarding banking deposits.

Vache Gabrielyan, deputy chairman of the Central Bank of Armenia, said the role of the deposit-safeguarding system is especially significant amid financial shocks and crises.

“An effective deposit-securing system could contribute a great deal to enhancement of public confidence in financial markets,” he said.

Gabrielyan said that the central bank had gauged effectiveness of the present system and had seen the necessity of improving it up to EU and IMF standards.

The amendments enlarge the size of compensation from present amount equal to AMD 1 million for foreign currency deposits and AMD 2 million for dram deposits to AMD 2 million and 4 million accordingly.

Besides, the deposit-safeguarding fund trustee council made up of representatives of the government, the parliament, German KfW Bank, Armenian commercial banks, will revise sizes of compensations once in every five years.

They also can be revised under force majéur circumstances, if a threat is posed to Armenia’s financial system.
Armenian government can provide budget guarantee to the fund and lend money to it trough the central bank.
The fund has been established on the central bank’s initiative.

Its aim is to ensure compensations of individuals’ deposits in the event of a bank’s insolvency.
Deposits in all the 22 commercial banks of Armenia are guaranteed. ($1 = AMD 386.34).-0---


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