Armenia’s Central Bank should reduce obligatory reserve norm, banker says

YEREVAN, April 11. /ARKA/. Armenia’s central bank should reduce the obligatory reserve norm so that banks are able to build up their portfolio with no major capital involvement, general director and chairman of management board of Bank VTB (Armenia) Yury Gusev said.

“There is a room for it, and it will allow many players in the market making additional offers for a number of economic sectors and lending, at present, to really important and promising economic fields”, Gusev told journalists Wednesday.

According to the banker, many Armenian banks able to later provide loans to economic sectors have no opportunity to increase their capital.

“I believe it should be a political decision on priority economic sectors; there should be a state support program, including soft-term financing through the banking sector. We are ready for it and we have our suggestions, one of them relating to asset provisions”, he said.

Under the N2 banking regulations and norms, commercial banks are required to place a minimum obligatory reserve of 12% in foreign currency and 8% in drams in the country’s central bank.

Bank VTB (Armenia) closed joint stock company became a member of VTB financial group in April 2004. The second biggest Russian bank, Bank VTB ojsc is now the full owner of Bank VTB (Armenia). The bank is among leaders of Armenian banking system in a number of basic indicators. It currently has the biggest network in Armenia – 67 branch offices across the country.  –0–

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