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Consolidation of Armenian commercial banks’ capital is adequate economic process – economist

YEREVAN, September 24. /ARKA/. Consolidation of Armenian commercial banks’ capital is within the frames of normal economic processes and contains no risk, Tatul Manaseryan, an economist and the head of Alternative Research Center, said at a news conference on Wednesday.

«I take consolidation of banks normally and I don’t share fears that many bank employees will lost their jobs creating a social problem,» he said. «Consolidation of banks may drive demand for skilled specialists up.»

In his words, the consolidation process was seen yet before the required minimum size of banks’ total capital was increased – many banks were already merging.

The economist considers the emission of stocks by several banks for capital replenishment as a new business culture in Armenia and thinks this is one of options to those who have to build up their capital.
«Economy can’t be harmed by that, and those who have large capital are able to implement large projects,» he said.

Manaseryan finds the central bank’s policy properly balanced. He said even rich countries couldn’t avoid devaluation of their national currencies and faced major financial problems, while Armenia’s banking sector retained stability.

He said some banks don’t run the risk and are rather anxious to have their lent money returned. Others extend loans secured by immovable property.

However, certain business programs can secure loans, but nothing like this is in practice in Armenia’s banking sector.

«In my opinion, time has come to think about integration of banks with the real sector, and stability should remain the top-priority goal,» Manaseryan said.

The Centarl Bank of Armenia has obliged the country’s commercial banks to have by January 1, 2017 at least AMD 30-billion capital instead of the present AMD 5 billion. –0–

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