Financial Crime World

Armenia’s Banking Sector Navigates Complex Regulatory Landscape

Armenia’s banking sector is subject to a vast array of legal acts ensuring the industry adheres to international standards and protects consumers’ interests. This article provides an overview of the main legislations regulating banking services in the Republic of Armenia.

  1. Civil Code of the Republic of Armenia

    • Serves as the legal foundation for all financial transactions, including banking services.

  2. Law “On Banks and Banking”

    • Defines the legal status, organization, and operation of banks in Armenia.

Regulatory Bodies and Complaints

  1. Law “On Financial System Ombudsman”

    • Establishes the role and functioning of the Financial System Ombudsman.
    • Responsible for handling complaints and disputes related to financial services.

  2. Law “On Bank Secrecy”

    • Protects clients’ financial information confidentiality, subject to specific exceptions.

Deposit Protection

  1. Law “On Guaranteeing the Remuneration of Banking Deposits of Natural Persons”

    • Guarantees depositors’ funds up to a certain amount in case of bank insolvency.

  2. Law “On Attracting of Banking Deposits”

    • Regulates deposit taking, interest rates, and related matters.

Consumer Credit

  1. Law “On Consumer Crediting”
    • Establishes standards for consumer credit.
    • Includes interest rates, repayment terms, and collection procedures.

Currency Regulation and Control

  1. Law “On Currency Regulation and Currency Control”

    • Regulates the use, exchange, and transfer of foreign currencies in Armenia.

  2. Law “On Non-Cash Transactions”

    • Regulates electronic funds transfers and other non-cash transactions.

Anti-Money Laundering and Counter-Terrorism Financing

  1. Law “On Combating Money Laundering and Terrorism Financing”
    • Ensures compliance with international anti-money laundering and counter-terrorism financing standards.

Capital Market and Securities Activities

  1. Law “On Securities Market”

    • Regulates stock exchanges, securities activities, and other capital market-related matters.

  2. Law “On Payment and Settlement Systems and Payment and Settlement Companies”

    • Governs payment systems, their operation, and regulatory requirements for payment and settlement entities.

  3. Law “On Transfer of Funds by Payment Orders”

    • Regulates the transfer of funds through payment orders.
    • Includes procedures, fees, and settlement mechanisms.

  4. Law “On Residential Mortgage Credit”

    • Regulates residential mortgage lending and related matters.
    • Includes collateral, interest rates, and repayment terms.

Additional Regulations

  1. Regulation 8/01: “On Explanations and Examples of the Calculation of Annual Percentage Rate of Charge”
  • Guides banks in calculating the annual percentage rates of charge on loans.
  1. Regulation 8/02: “On the Calculation of Annual Percentage Yield of Bank Deposits”
  • Defines how banks calculate annual percentage yield for deposit products.
  1. Regulation 8/03: “On Publication of Information by Financial Organizations and Financial Groups”
  • Requires financial organizations to disclose specific information to the public.
  1. Regulation 8/04: “On Minimum Conditions and Principles for Internal Rules, Regulating the Procedure of Examination of Complaints/Claims of Customers”
  • Establishes procedures for handling customer complaints.
  1. Regulation 8/05: “On Rules of Business Conduct of Financial Institutions”
  • Sets ethical conduct standards for financial institutions.
  1. Regulation 8/06: “Business Conduct Rules with Guarantors”
  • Regulates the business conduct of financial institutions when dealing with guarantors.
  1. Regulation 113-N: “On Establishment of a Loan Register-Credit Informational System and Procedure of Participation of Banks, Credit Companies, and Branches of Foreign Banks Operating in the Republic of Armenia Therein”
  • Establishes a loan register and sets procedures for its use.
  1. Regulation 113-N: “On Requirements on Activities of Entities Carrying Out Investment Activities”
  • Regulates investment activities in the country.
  1. Regulation 5/15: “On the Operation of Participants Register of the Mandatory Cumulative Pension Funds and Activities of Account Operators”
  • Governs mandatory pension funds and related activities.

These regulations ensure that Armenia’s banking sector remains compliant with international best practices and maintains a stable financial environment.