Central Bank Launches Deposit Compensation Fund


YEREVAN, FEBRUARY 21, ARMENPRESS: Armenian Central Bank called a
special news conference on Friday to announce the inception of a
special bank fund that will recompense individual clients’ deposits in
case a bank goes bankrupt. The fund’s board of trustees comprises two
deputy finance and economy ministers, Central Bank chairman, a member
of the Union of Banks, as well as a parliament member. A competition
will be announced for the position of the fund’s executive manager.

Central Bank chairman Tigran Sarkisian said the fund is established
to raise the reliability of deposits’ return.

The fund will have a special account in the Central Bank and each
of commercial banks will have to contribute to it a sum equal to 0.2
percent of all its deposits. If a bank goes bankrupt the fund will
compensate all dram accounts not exceeding 2 million and also accounts
in US Dollar equal to 1 million drams. The difference is to foster
clients to keep their deposits in the national currency.

At present the fund has on its account 2 million US Dollar worth
drams and another 3.5 million euros are expected to come from the
government of Germany.

The aggregate amount of individual deposits in all commercial banks
amounts now to 110 billion drams, the majority of accounts-95
percent-are in US Dollars.