Financial Crime World

Armenia’s Central Bank Tightens Oversight of Payment Settlement Services

The Central Bank of Armenia (CBA) has introduced new regulations to strengthen its oversight of payment settlement services (PSS) in the country.

Regular Monitoring and On-Site Inspections

According to Article 3 of the new regulations, CBA will carry out regular monitoring of PSS operators and participants through statements reported to the bank and on-site inspections. Forms and terms for reporting will be determined by normative regulations of the CBA. Additionally, the bank will conduct on-site inspections of PSS participants as needed, in accordance with the Republic of Armenia Law on Central Bank and CBA’s own normative regulations.

Supervisory Board to Oversee PSS Activities

Article 14 of the regulations allows PSS participants to create a supervisory board to oversee their activities. The terms and conditions for creation and operation of the supervisory board will be defined in accordance with the principles of PSS operations.

Benefits of Supervisory Board

  • Allows PSS participants to oversee their own activities
  • Promotes transparency and accountability

Liability for Infringement of Legislation

Article 15 establishes liability for infringement of legislation by PSS participants. CBA may issue warnings and charge assignments to remedy infringements or adhere to requirements. Failure to comply may result in disallowance of activity or nullification of permission.

Consequences of Non-Compliance

  • Disallowance of activity
  • Nullification of permission
  • Penalties, including:
    • Changing the Armenian PSS operator
    • Terminating or nullifying permission for creation and activities of the Armenian PSS
    • Penalizing participants at a rate of one thousand-fold to two thousand-fold of the minimum salary

Information Release

Article 16 requires the Armenian PSS operator to release information on PSS activities in accordance with forms and frequencies established by CBA Board. Central Treasury of the Republic of Armenia is exempt from this requirement.

Importance of Transparency

  • Ensures transparency and accountability
  • Allows for effective oversight and regulation

Payment Settlement Services and Organizations

Article 17 defines payment settlement services, including:

  • Opening and running bank accounts
  • Receiving/making payments
  • Issuing payment cards and other instruments
  • Processing settlements

Parties Rendering Payment Settlement Services

Article 18 lists parties entitled to render payment settlement services in the Republic of Armenia, including:

  • CBA
  • Banks
  • Payment and settlement organizations
  • Central Treasury of the Republic of Armenia
  • Others

Notification Requirements

Parties rendering these services must notify CBA and supply information on their activities, even if it contains commercial or other secrecy.