Armenian regulator sets system of differentiated obligatory insurance payments

22.03.2016 13:58
Armenian regulator sets system of differentiated obligatory insurance payments

YEREVAN, March 22. /ARKA/. The Central Bank of Armenia has set up a system of differentiated obligatory insurance payments which Armenia's banks transfer to the deposit guarantee fund.

According to the press office of the central bank, an appropriate law has been amended to allow the regulator to set higher obligatory payments for banks, depending on degrees of their exposure to risk.

The regulator considers high interest rates offered by banks for attracting deposits in foreign currencies as risky factor.

In particular, those banks attracting deposits by offering high interest rates will pay higher deposit security payments to the fund.

«Application of differentiated deposit insurance payments makes the process of forming the fund's financial resources just,» the regulator says in its press release.

Introduction of the differentiated system of securing deposits is expected to drive lending interests down making loans more affordable. On the other side, this will contribute to the central bank’s dedollarization policy and will enhance attractiveness of deposits in drams.

In December 2015, appropriate legislative changes were implemented – banks’ obligatory payment size was increased 2.5 times. In particular, maximum size of bank-insured deposit in drams is AMD 10 million against former AMD 4 million, and that for deposits in foreign currencies is the amount equivalent to AMD 5 million against AMD 2 million respectively.

The regulator says residents’ deposits in Armenia’s commercial banks totaled AMD 1 501.8 billion in late 2015, of which AMD 536 billion is deposited in drams and AMD 965.7 billion in foreign currencies. ($1 – AMD 483.86). --0----


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