YEREVAN, January 26. / ARKA /. A decision of Armenia’s Central Bank to increase the deposit insurance coverage may force the banks to increase the price of their products, head of the Union of Armenian Banks Samvel Chzmachyan, said in an interview with the local newspaper ‘Golos Armenii’ (Voice of Armenia).
Chzmachyan said it is wrong to cite the example of Russia that doubled bank deposit insurance to 1.4 million rubles ($22,000) in late 2014 December as part of the government’s measures to stabilize the domestic financial system amid the national currency’s depreciation.
“In contrast to Russia, where the Central Bank has revoked licenses of dozens of banks in the last 12 months, the Central Bank of Armenia did so some 15 years ago,’ he said.
Chzmachyan said the Armenian banking system has quite a high liquidity.
“The last time it proved it was last December, when amid the depreciating dram many depositors rushed to banks to withdraw their deposits. I know banks, which returned to depositors millions of dollars in a couple of days and exactly a week later more than half of those deposits were back to the banks again,” he added.
He said the population should not worry about their savings kept in commercial banks, because irrespective of scenarios there is no additional risk to their money.
Under the Armenian law on deposit insurance coverage, the maximum amount of guaranteed deposits in drams is 4 million while insurance coverage for deposits in foreign currency is the equivalent of 2 million drams.-0-
