YEREVAN, August 28. /ARKA/. Lenders in Armenia will be not allowed to change the interest rate mentioned in the contract more than twice a year, Armenian Deputy Finance Minister Pavel Safaryan said Thursday at a regular Cabinet meeting where the ministers approved the National Assembly’s proposal to amend the country’s civil code and consumer lending law.
The aim of the amendment is to create additional guarantees for protecting the rights and interests of citizens who have signed loan contracts.
The deputy minister said that the current law allows lenders to change the interest rate or the interest calculation rules leaving room for abuse.
He also said that regulation of loan contracts with a floating interest rate was proposed as well. It means the interest rate may be raised only under particular cases, such as circumstances that don’t depend on the lender and that badly impact the indicators on which the interest rate is based.
“But even so, the interest rate can’t be increased more than twice a year,” Safarysan said.
Arthur Javadyan, the head of the Central Bank of Armenia, on his side, said that in the world practice changes are permitted four times a year, since they carry certain risks. He proposed to discuss the idea of stipulating the same in the law.
However, Prime Minister Hovik Abrahamyan called this proposal unreasonable.
“Before borrowing money corporate clients compose their business plans based on interest rate forecasts, the same applies to individuals,” he said. “And as a result, they face unpredictable changes, but this is not acceptable.”
The premier gave two days to the appropriate officials for making their final decisions–0–
