YEREVAN, May 6. /ARКА/. As a solution to the problem of growing financial fraud, the Central Bank of Armenia has recommended banks to freeze all credit obligations that have signs of fraud, said Martin Galstyan, head of the Central Bank of Armenia.
“We have undertaken the obligation to study all episodes of fraud that have taken place in Armenia. This requires quite a large resource, because each case is special, it is the fate of a person or a family,” Galstyan said at a press conference on Tuesday.
He explained that the share of fraud is 0.1% of the total loan portfolio of Armenian banks.
Galstyan also said that in the event of fraudulent activities being detected, the entity that encountered the problem must be held accountable.
“If the problem were static, like two or three years ago, it would be very easy to solve. But in a situation where new products appear every day and every week, we cannot keep track of everything. The Central Bank does not have 7,500 employees who could monitor these 7,500 products. There are about 10 people in the Central Bank department that monitors banks. We understand the problem and are trying to solve it as quickly as possible,” Galstyan said, adding that the Central Bank is conducting an in-depth audit in 3-4 banks.
According to Galstyan, some cases have something in common: there was phishing, the person voluntarily provided data, but there are also differences, so an attempt will be made to group the cases.
“If the problem is in the product, we must respond to it, if the problem is in the regulation, then we must respond to it as well. If the problem arose due to carelessness on the part of a person, then we have little opportunity there,” he said.
Galstyan pointed to the problem in the context of banks using innovations, since proper regulation is needed, but noted that if we return to an analog economy or allow banks to operate without any identification, compliance with cybersecurity rules, the results will be negative. “That’s why we are trying to understand where the golden mean is, where innovation and consumer protection will converge,” Galstyan said.
Armenia has seen an increase in financial fraud lately, especially in the area of online lending and phishing. Victims are taking to the streets to protest. -0-
