CENTRAL BANK RAISES MINIMUM AMOUNT OF BANKS TOTAL CAPITAL TO 30 BILLION DRAMS FROM 5 BILLION DRAMS
YEREVAN, January 12. / ARKA /. Armenia’s Central Bank has decided
to raise the minimum amount of commercial banks’ total capital to 30
billion drams from the current 5 billion drams from January 1, 2017.
According to a Central Bank’s press release, the banks established
before January 1, 2017 will have to meet the new requirement- that
is to have 30 billion drams worth total capital.
According to the press release, the measure is aimed at encouraging
mergers and consolidation of banks, which is expected to create a
sound competitive environment and make banking services more available.
The regulator said also it expects this measure to increase the
flexibility and the ability of the banking system to withstand
shocks in different economic situations, and help advance financial
intermediation.
The Central Bank said a series of meetings with bank shareholders
show that virtually all are ready for raising their capitalization
that will make the system more attractive and steady.
The measure was also welcomed by a number of international financial
organizations, which are ready to make investments in the Armenian
banks.
“The change applies equally to all banks in Armenia. The deadline is
enough for all the banks to bring their activities into compliance
with the regulatory requirement,” the Central Bank said.
The last time the Central Bank increased the minimum size of total
capital from 2.4 billion drams to 5 billion drams was in January 2009.
According to 2014 data, the total capital of only five Armenian
banks met and even exceeded the new requirement, while four banks’
capital was below 10 billion drams. There are now 21 commercial banks
in Armenia and also the Pan-Armenian bank.-0-