New Regulations for Financial Regulation Compliance in Armenia: A Look at the Banking Law
In a bid to strengthen financial regulation compliance in Armenia, the National Assembly has adopted sweeping changes to the country’s banking law. These amendments are aimed at enhancing the development, reliability, and regular functioning of the banking system while creating equal competition conditions.
Scope of the Legislation (Article 1)
The revised banking law covers:
- Banking regulations
- Licensing
- Oversight in Armenia
This includes:
- Licenses for domestic and foreign banks, branches, and representative offices
- Complementary legislation such as the Law on the Central Bank of Armenia and the Law on Central Securities Depository
- Regulatory acts from the Central Bank
Objective of the New Banking Law (Article 3)
The primary objective of the new banking law is:
- To foster a robust banking system
- Promote fair economic competition among banks
Key Provisions of the Updated Law
Definition of Banks and Banking (Article 4)
A bank is recognized as a legal entity:
- Authorized to conduct banking activities
- Acceptance of deposits, offering to accept deposits, lending, depositing, and investing on behalf of and at the risk of the entity
Strictly prohibited are:
- Unlicensed banking activities within Armenia’s jurisdiction
- Use of the term ‘bank’ or derivatives without a valid banking license
Use of the Term ‘Bank’ (Article 6)
- Only entities holding valid banking licenses, branches, and representative offices may utilize the term ‘bank’ or its derivatives
- Misleading designations are also prohibited to avoid any confusion concerning the financial position or legal status of the respective bank
Bank Unions and Associations (Article 7)
Banks may join non-profit unions and associations:
- To coordinate activities
- Protect interests
- Exchange information
- Solve related banking issues
However, they may not conduct banking activities themselves.
These amendments are part of a continuous effort to modernize the regulatory framework and facilitate economic growth in Armenia. Further updates to the banking law are expected as global financial norms evolve and local stakeholders adapt to accommodate emerging market trends.