YEREVAN, October 30. /ARKA/. Private deposits in Armenian banks have increased tenfold over the last ten years to more than AMD 1 086 billion, and the number of depositors has grown six times to more than 1.7 million, Hermine Harutyunyan, the head of the Deposit Insurance Fund, told journalists on Friday.

She said the calculations are based on analysis of data on deposits and current accounts of individuals.
In her words, the Deposit Insurance Fund was established by the Central Bank of Armenia in 2005 to enhance public confidence in Armenia's banks.

Harutyunyan said that in compliance with the law, every quarter banks transfer 0.05% of the amounts deposited on their accounts, and the fund runs these assets to ensure profitability.
“Over ten years of our work, the size of compensation for insured deposits has repeatedly been increased, and this shows stability of our banking system and development of the fund, which is able to ensure a quite high level of compensation,” she said.

On October 26, the Armenian National Assembly amended the deposit insurance law. The amendment raised the amount of government-insured private deposits in Armenia's banks about 2.5 times to AMD 10 million from the present 4 million for dram deposits and AMD 5 million from the current 2 million for deposits in foreign currencies.

The following scheme is designed for dram and foreign currency deposits: if a dram deposit exceeds AMD 5 million, only the mentioned amount will be insured, if a dram deposit is less than AMD 5 million, it will be fully insured plus a part of a foreign currency deposit, i.e. difference between the dram deposit and AMD 5 million.

“This change will have a favorable effect on the banking system, since it will enhance depositors' confidence and will spur growth in this sector,” Harutyunyan said.

She also stressed that there are no risky banks in Armenia now – banks have no liquidity problems and the system is working properly.

According to the National Statistical Service of Armenia, deposits of Armenian residents in the country's banks totaled AMD 1 422.1 billion in August 2015 (0.8% month-on-month decline). Their deposits in drams amounted to AMD 497.5 billion (3% decline) and deposits in foreign currencies AMD 924.5 billion (0.4% growth). ($1 – AMD 471.86). ----0----