The authorities gave freedom to the banks, and the banks enjoy that freedom. By setting widespread high prices for intermediary services, they have been emptying the pockets of citizens and businesses for years. Nikol Pashinyan and members of the Communist Party, who once thought that banks were engaged in robbery, have turned the banking system into a scourge for citizens and businesses. Despite widespread complaints, nothing is being done to curb the banks’ appetite.

After massive complaints, recently, of course, the Central Bank decided to slightly reduce the commissions charged for cashless transactions with bank cards for small businesses. But they did it not because they are worried about small business and decided to curb the appetite of banks, but because the interests of the government demand it before the elections. Although it seems that the banks have also found an option to get out of that situation dry. They decided to replace those “losses” by increasing the price of other services.

The appetite of banks is great, especially in the credit market. There is no way they want to reduce the interest on loans, despite the fact that money has become cheaper in the last few years. We are talking about the money leaving the Central Bank.

Three years ago, the price of money coming out of the Central Bank was 10.75 percent, today it is only 6.50 percent. It decreased by 4.25 percentage points.

This is a serious devaluation of money, which implies that the banks should also reduce the interest rates on loans provided by them to citizens and businesses. But the banks, enjoying the patronage and assistance of the government, continue to keep the price of loans high. Not only do they not reduce the loan interest, but they also increase it.

Three years ago, the average interest rate of dram loans with a term of up to 1 year in the banking system was 11.76 percent. At that time, the price of money or refinancing rate was extremely high, it was at the peak of the last years, it was 10.75 percent. And in the conditions of that peak, the loan interest rate was incomparably lower than now.

One year later, in 2024. in January, the price of money was 9.25 percent, and the average interest rate on short-term dram loans increased from 11.76 to 12.76 percent.

They increased the price by 1 percentage point, although the price of money decreased by 1.5 percentage points during that time.

Next: 2025 in January, the price of money coming out of the Central Bank fell sharply, making 7 percent, while interest rates on dram loans with a term of up to 1 year continued to rise, reaching 13 percent.

At the beginning of this year, banks increased the price of such loans again.

Now the price of money coming out of the Central Bank is 6.50 percent, and the average interest rate of short-term dram loans has reached a record 13.41 percent.

Over the course of three years, money became cheaper by 4.25 percentage points, and dram loans with a term of up to 1 year, instead of becoming cheaper, became more expensive by 1.65 percentage points. In the case of this type of loans, the bank margin is already incredibly high. As a result of this, banks get big profits, and these profits are primarily at the expense of citizens, taking into account the fact that short-term dram loans are primarily consumer loans, which citizens are often forced to use to solve their household problems.

Just 3 years ago, in the case of short-term dram loans, the bank margin was only 1 percentage point, now it is almost 7 times larger. The price of these loans is more than double the refinancing rate. This means that when the bank borrows money from the Central Bank at 6.50%, it raises that percentage at least twice and gives it to the citizens.

With such means, money is made at the expense of the citizens, and the authorities follow all this indifferently. Moreover, they do everything so that the banks do not reduce the interest rates on loans. What is needed for that? You just need to subsidize loan interest and keep demand artificially high.

Now they have decided to provide interest-free loans to the villagers on the eve of the elections. Interest-free to the extent that the state budget should cover those interests instead of the peasants. Banks will benefit from this. The victim, naturally, is the state budget. But who pays attention to this? The state’s money has no owner, and the government can afford such extravagances for political purposes. They take the money out of the budget and put it in the banks’ pockets.

According to the latest data, the loans of the banking system approach 21 billion dollars, of which the largest portfolio is short-term dram loans. Such loans, which are primarily of consumer importance, approach 5 billion dollars. They are not only expensive loans, but also, as we see, they are getting more and more expensive. The government is not doing anything to curb the appetite of the banks.

Even the steps of the Central Bank to lower the price of money, which at first glance tend to “force” banks to reduce loan interest rates, are not yielding results. But with the same logic that limited the price of trade mediation for small businesses, they do not intend to limit credit interest. Banks, for obvious reasons, do not tend to limit their own appetite.

And it turned out that as much as possible, they oppress people with expensive loans, they advance the interests of banks. Market pricing and demand have become an excuse to keep the price of loans artificially high.

 HAKOB KOCHARYAN

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