Bright Armenia Party proposes caps on loan interest rates

The Bright Armenia Party has pledged to push for caps on bank loan interest rates if it secures seats in the upcoming parliamentary elections, with party leader Edmon Marukyan arguing that commercial banks in Armenia are generating excessive profits.

During a campaign event in Yerevan outside the Central Bank headquarters, Marukyan, a former ambassador-at-large and former lawmaker, called for tighter regulation of the financial sector, as well as measures to prevent conflicts of interest and address fraudulent lending practices.

According to Marukyan, over the past five years, no steps have been taken to implement regulations on high interest rates.

“In the last five years, we have had a situation in which Armenia’s banking sector has simply generated super-profits,” Marukyan said.

He said the Central Bank lends money to commercial banks at an average rate of 6.7 percent, after which those banks issue loans to citizens at rates ranging from 16 to 20 percent.

“We are asking the people to give us the opportunity so that after the June 7 elections, in the newly formed parliament, we can work to limit the ceiling on loan interest rates in Armenia,” Marukyan said.

He further proposed introducing a restriction under which individuals with experience in the Central Bank or Armenia’s financial sector would be barred for several years after leaving their positions from working in private commercial banks, in order to prevent the use of public-sector expertise in favor of private interests.

Marukyan also spoke about the need to tackle fraudsters who take out loans in unsuspecting citizens’ names.

The Bright Armenia Party is among the 19 political forces running for parliament in the June 7 election.