YEREVAN, May 13. /ARKA/. The National Assembly’s finance and budgetary committee gave its disapproval to the legislative initiative of Hrant Bagratyan, an MP and former prime minister, who proposes to reorganize the country’s commercial banks into open joint stock companies, according to Zhamanak (Time) Newspaper.
Artsvik Minasyan, an MP from Armenian Revolutionary Federation /Dashnaktsutiun political party, and Levon Dokholyan, an MP from Orinats Yerkir party, upheld the initiative, while four members of the ruling Republican Party of Armenia along with Gagik Minasyan, the head of the finance and budgetary committee, were opposed to it.
Bagratyan, the author of the initiative, is convinced that reorganization will make banks’ activities more transparent.
Besides, he says, the banks’ stocks will be listed at the stock exchange, and it will become clear thanks to that which of them work effectively and which are insolvent and on the edge of bankruptcy.
«Now the only saving instrument in Armenia is bank deposits, and if banks become open joint stock companies, the population will invest their savings into banks’ stocks, filling their capital,» Bagratyan said.
He said blank silence prevails at the financial market throughout 15 years, and the central bank ensures a false stability here by spending the country’s resources to shield banks from bankruptcy and support the system’s sustainability contrary to the normal rational principle in accordance to which ill-run banks should face bankruptcy and should leave the market.
But the main thing Bagratyan wants to do through reorganization is to stop the outflow of the capital from the country.
He said once $50 to 100 million went outside every year, while now the country loses more than $700 million.
«The thing is that even those who earn money in Armenia and have excessive financial resources don’t know where to invest them,» Bagratyan said.
The opponents of the proposal, explaining their attitude, say it is impossible to force private companies to undergo reorganization.
But a really irrefutable argument was put forward by Nerses Yeritsyan, deputy head of the Central Bank of Armenia, who said that to attract extra capital commercial banks, first of all, should need it. Otherwise, the excessive capital will add nothing to effectiveness of the banks’ activity, and will even have adverse impacts on it.
«And that’s so, if the banks needed additional capital, they would be interested in issuing stocks and attracting capital,» is written in Zhamanak Newspaper. «But where it will be invested to ensure its effectiveness? The majority of borrowers in Armenia are not able to repay their loans, and the bankers don’t know how to return the lent money, and how can they think about new lending? This confession means that there is no economy in Armenia, since only if so, banks don’t know what to do with their resources.» –0–
