Tweet
FINANCIAL MEDIATION INDEX TO BE INCREASED FROM CURRENT 10% TO 40-60% IN ARMENIA
Noyan Tapan
Jun 25 2007
YEREVAN, JUNE 25, NOYAN TAPAN. The index of financial mediation
should be increased from the current 10% to 40-60% (as in developed
countries), for which the 20-30% growth, which was registered with
respect to the main indices of the banking system in recent years,
should be increased to at least 40%. The Chairman of the Central
Bank of Armenia (CBA) Tigran Sargsian said this at the June 25 annual
meeting of the Union of Armenian Banks.
According to him, out of 763 thousand customers of 21 Armenian banks,
only 39 thousand are legal entities, while 54 thousand legal entities
and 48 thousand private businessmen are now regsitered in Armenia. He
said that only 30-35% of registered enyerprises really operate. In
his opinion, these indices show that a lot of enterprises operate in
the shadow sector.
Out of the problems facing the Armenian banking system, the CBA
chairman pointed out the reduction of 10-13% difference (which is
the highest in the world) of the interest rates of credits provided
by Armenian banks and deposits attracted by them. With this aim,
the standards of corporate governance, as well as the requirement of
having a minimum capital of 5 billion drams (about 14.5 million USD)
were introduced in banks. Besides, steps were taken to attract foreign
banks in order to increase the competitiveness in the RA banking
system. As a result, PostBank (the Netherlands), GasPromBank (Russia),
Raiffaizenbank (Austria), ByblosBank (Lebanon) and ProKreditBank
(Germany) have expressed an intention to operate in Armenia.
The CBA will also take steps to raise the portfolio of mortgage credits
provided by Armenian banks from the current 30 billion drams to 350
billion drams within the next three years.
The CBA chairman appreciated the fact that Armenian banks and
enterprises issue bonds. In his opinion, the entrance of the
Swedish-Finnish company OMX AB into Armenia will be conducive to the
issue of other securities: OMX is expected to purchase the Armenian
Stock Exchange by late 2007.
T. Sargsian said that the mitigation of normatives helped develop
the Armenian banking system in recent years. It is envisaged that the
regulation of banking activities will pass from the CBA to the Union of
Armenian Banks when the latter works out the norms of self-regulation.
Noyan Tapan
Jun 25 2007
YEREVAN, JUNE 25, NOYAN TAPAN. The index of financial mediation
should be increased from the current 10% to 40-60% (as in developed
countries), for which the 20-30% growth, which was registered with
respect to the main indices of the banking system in recent years,
should be increased to at least 40%. The Chairman of the Central
Bank of Armenia (CBA) Tigran Sargsian said this at the June 25 annual
meeting of the Union of Armenian Banks.
According to him, out of 763 thousand customers of 21 Armenian banks,
only 39 thousand are legal entities, while 54 thousand legal entities
and 48 thousand private businessmen are now regsitered in Armenia. He
said that only 30-35% of registered enyerprises really operate. In
his opinion, these indices show that a lot of enterprises operate in
the shadow sector.
Out of the problems facing the Armenian banking system, the CBA
chairman pointed out the reduction of 10-13% difference (which is
the highest in the world) of the interest rates of credits provided
by Armenian banks and deposits attracted by them. With this aim,
the standards of corporate governance, as well as the requirement of
having a minimum capital of 5 billion drams (about 14.5 million USD)
were introduced in banks. Besides, steps were taken to attract foreign
banks in order to increase the competitiveness in the RA banking
system. As a result, PostBank (the Netherlands), GasPromBank (Russia),
Raiffaizenbank (Austria), ByblosBank (Lebanon) and ProKreditBank
(Germany) have expressed an intention to operate in Armenia.
The CBA will also take steps to raise the portfolio of mortgage credits
provided by Armenian banks from the current 30 billion drams to 350
billion drams within the next three years.
The CBA chairman appreciated the fact that Armenian banks and
enterprises issue bonds. In his opinion, the entrance of the
Swedish-Finnish company OMX AB into Armenia will be conducive to the
issue of other securities: OMX is expected to purchase the Armenian
Stock Exchange by late 2007.
T. Sargsian said that the mitigation of normatives helped develop
the Armenian banking system in recent years. It is envisaged that the
regulation of banking activities will pass from the CBA to the Union of
Armenian Banks when the latter works out the norms of self-regulation.