ArmInfo. Commercial banks of Armenia agreed to forgive their customers fines and pennies on loans in excess of 7 billion drams (about $ 15 million), Acting Prime Minister Nikol Pashinyan wrote on his page on Faceebook.
According to him, this was achieved thanks to legislative changes proposed by the government in July 2018. In total, 14963 borrowers enjoyed the loan amnesty. Loan history of about 124 thousand banking clients was revised. This process will be continuous. "Citizens who have credit debts must visit their bank in order to agree on the issue of fines and penalties," Nikol Pashinyan wrote.
To recall, the National Assembly of Armenia at the plenary session on June 21 adopted amendments to the Tax Code of the Republic of Armenia, which provided an opportunity for commercial banks of the country to obtain the right to write off fines and pennies of a certain category of debtors - individuals without tax costs.
According to the Financial Rating of Banks of Armenia, prepared by the ArmInfo, the volume of overdue loans at banks in Armenia increased 31.4% per annum by October 1, 2018, while a year earlier there was a decline of 5.2% in the same period. Due to the rising dynamics of overdue loans, the share of NPL in the loan portfolio increased by 1 October 2018 to 11.2% from last year's 10.2%. In the loan portfolio of 3.1 trillion drams ($ 6.4 billion, with a y-o-y growth of 17%), overdue loans accounted for 354.5 billion drams ($ 734.3 million), of which 39% fall to a dubious group, 35% - to hopeless, and the proportion of controlled and non-standard groups is 13% each. A year earlier, in the structure of overdue loans, the lion's share fell on a hopeless group - 59.4%, and the proportion of the doubtful group was much more modest - 12.7%, while the other less risky loans were: controlled - 17.9% and non-standard - 10 %.
The y-o-y growth in overdue loans was triggered by a sharp increase in a doubtful group of loans 4- fold and non-standard almost 2-fold, with a very modest decline in bad loans and controlled ones - by 24.2% and 3.2%, respectively. Against this background, standard loans grew 16.7% in y-o-y terms. To note for comparison that a year earlier, bad loans showed an increase of 15.7%, while the other less risky groups were in decline: doubtful - by 44.8%, non-standard - by 22.1%, controlled - by 5 , 3%, while standard loans showed an increase of 14.3%.
In bad loans structure share of consumer loans is - 25.8%, the retail sector - 16.4%, the agricultural sector - 12.7% and industry- 8.7%. In the total volume of overdue loans, these areas also dominate: consumer loans - 25%, trade - 14%, agricultural sector - 13.4% and industry - 12.2%.