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Banking Regulations in Armenia: A Guide

Manager Registration

To ensure the integrity of Armenia’s banking system, managers are required to undergo registration before taking office. The Central Bank of Armenia (CBA) assesses professional compliance through examination and verbal interview.

  • Registration Requirements: Managers must be registered by the CBA before assuming their position.
  • Assessment Process: The CBA evaluates a manager’s qualifications through a thorough examination and verbal interview.
  • Qualification Period: A manager is considered registered and qualified until they are removed by the CBA.

Remuneration Requirements

The Central Bank of Armenia (CBA) regulates bonuses and incentive payments to prevent financial instability and ensure prudential standards are met.

  • Limitations on Bonuses: The CBA may limit bonus payments if they contribute to a decline in financial condition or breach prudential standards.
  • Prudent Remuneration Practices: Banks must maintain prudent remuneration practices that align with regulatory requirements.

Anti-Money Laundering (AML) and Counter-Financing of Terrorism (CFT)

Armenia’s banking system has strict anti-money laundering (AML) and counter-financing of terrorism (CFT) regulations in place to prevent illicit activities.

  • Internal Policies: Banks must establish internal AML/CFT policies, risk assessment regulations, and Know-Your-Customer (KYC) processes.
  • Customer Due Diligence: Conduct customer due diligence at business initiation and ongoing service provision.
  • Transaction Risk Evaluation: Evaluate transaction risks and report suspicious transactions.

Depositor Protection

The Deposit Guarantee Fund of Armenia provides protection for depositors in the event of a bank’s insolvency or bankruptcy.

  • Deposit Coverage: The fund covers deposits up to AMD16 million in dram-denominated accounts and AMD7 million in foreign currency accounts, subject to certain conditions.
  • Compensation Events: A compensation event occurs when a bank is declared insolvent or bankrupt, and the CBA notifies the Fund.