Increase in amount of deposit compensation to help attract more deposits

PanARMENIAN.Net - Vice Chairman of Armeconombank Board Hayk Mkrtchyan said that the amendments introduced to the RA Law on Guaranteeing of Compensation for Individuals’ Bank Deposits will not affect the deposit interest rates but will help attract more deposits.

Volumes of deposits have considerably increased in the entire banking system this year, Mkrtchyan told a PanARMENIAN.Net reporter. He added that AMD and foreign currency deposits make 30% and 70% respectively.

Chairman of the Union of Armenian Banks Ararat Ghukasyan said for his part that interest rates for AMD deposits will remain unchanged this year, while those for foreign currency deposits have already started decreasing and soon they will total around 6%, what is an “acceptable rate for depositors.”

On June 24, the Armenian parliament adopted the bill on introduction of amendments to the Law on Guaranteeing of Compensation for Individuals’ Bank Deposits. As per the amendments, the amount of compensation for AMD and foreign currency bank deposits will total AMD 4mln (instead of previous 2mln) and AMD 2mln (instead of 1mln) respectively.

The Board of Trustees of the Deposits Guaranteeing Fund consisting of representatives of the RA government, parliament, KfW bank and Armenian banks will be revising the amounts of deposits guaranteeing once in five years.