YEREVAN, December 1. /ARKA/. A revised Armenian law that has increased the amount of insured banking deposits both in the national and foreign currencies has entered into force on December 1, 2020, the Union of Banks of Armenia reported.

The revised law was passed by the parliament on September 15. The changes were proposed by the Prosperous Armenia party.

Under the new law, the amount of insured deposit in Armenian drams is now 16 million, up from the previous 10 million, and the amount of insured deposits in foreign currency is the equivalent of 7 million drams, up from the previous 5 million drams.

If citizens have both dram deposits and in foreign currency and if the dram deposit exceeds 7 million, only the dram deposit of up to 16 million drams is insured.

If citizens have deposits in drams and in foreign currency, but the dram deposit is less than 7 million then the dram deposit is insured in full, while the foreign currency deposit in the amount of the difference between 7 million drams and the refunded bank deposit in drams.

“The purpose of the law  is to increase the reliability of the banking system of Armenia and to protect the interests of depositors,” the Union of Banks said. It added that under the law all monetary deposits of one person in one bank are considered as one deposit and all deposits in foreign currency as one deposit.

“If you have deposits in several banks operating on the territory of Armenia, they are insured by each bank,” the Union said.

Today only banks, which are part of the deposit insurance system, have the right to accept deposits of individuals. These are all Armenian commercial banks.

If a bank's license is revoked, or it is declared bankrupt in other similar cases, the Deposit Insurance Fund will compensate for depositors' funds in accordance with the law.

The Fund, established by the Central Bank of Armenia, is a non-commercial legal entity. Its main goal is to ensure the stability and reliability of the country's banking system by insuring deposits of individuals and private entrepreneurs.

According to the Central Bank of Armenia, the total volume of bank deposits as of September 30, 2020 stood at about 3.6 trillion drams. Of that amount about 1.7 trillion drams were in deposits in the national currency and the equivalent of 1.9 billion (53%) in foreign currency. ($1 - 506.98 drams). --0--