Thursday, March 14 2019 16:43
Naira Badalian

Prime minister assistant received representatives of pawnshops and  : they do not give political assessments, but they make  unequivocal statements

Prime minister assistant received representatives of pawnshops and  <exchangers>: they do not give political assessments, but they make  unequivocal statements

ArmInfo. The pawnshops and currency exchange offices operating in Armenia will be able to manage the increase in the annual state duty from the current 100 thousand  to 350- 370 thousand drams for pawnshops and up to 70 thousand drams  for "exchangers" against the current 50 thousand drams. "We'll not  draw more," said Aramais Khachatryan, chairman of the Union of  Currency Dealers of Armenia, after Assistant Prime Minister of  Armenia Nairi Sargsyan received the representatives of the field.

According to the representative of the interests of pawnshops Mher  Gevorgian, Sargsyan listened to their proposals, promised to discuss  the issue with all interested parties, and if necessary to report  also on the problem to the head of government. Nairi Sargsyan  promised to talk about the results of the discussions until Monday.

According to Gevorgyan, they do not exclude that the initiative of  the Armenian government is aimed at reducing the number of operating  pawnshops, and serves the interests of commercial banks. "We thought  about it, but today we don't want to make political statements. But  any sensible person understands that such decisions lead to the  consolidation of the market, that is, only large players will  remain," he said.

At the same time, as Khachatryan stated, today they are protesting  not against the Armenian Central Bank, the mega-regulator of the  financial market, but against the Armenian government represented by  the Ministry of Finance, which is the author of the draft law.  According to him, the representatives of the sphere were not involved  in the Ministry of Finance discussions as part of the development of  the draft law.

When asked whether it is possible that the government intends to  regulate the market of Lombard services due to its insufficient level  of transparency and a significant amount of shadow turnover, Mher  Gevorgyan stated that the sphere is controlled by the Central Bank,  which works "hard", but "good" and hide something from his gaze - is  impossible. Referring to the fact that the Central Bank exercises  financial control, but does not have the right to control the assets  of the same pawnshops where stolen goods can be sold, Gevorgyan  stressed that any stolen thing can be mortgaged in any financial  institution that has a license to issue loans. Recall that a week the  pawnbrokers and currency exchange offices are protesting against the  proposed changes to the Law on State Duty, suggesting a 60-fold  increase in state duty for pawnbrokers and currency exchange offices,  most of them will close and about 1,300 people will remain out of  work. According to the bill, instead of the current state duty for  pawnshops at 100 thousand drams (about $ 205) a bar will be set at 6  million drams (about $ 12.3 thousand), and for exchange points - 3  million drams (about $ 6.1 thousand) instead of the current 50  thousand (about $ 102). As noted, the adoption of the bill threatens  to close more than half of the 128 pawnshops and 200 exchange offices  operating throughout the country. As a result, more than 1,300 people  are waiting for reductions, and the state treasury's tax losses will  reach 900 million drams (about $ 1.8 million).

Owners and employees of pawnshops and exchangers also declare unequal  and unfair treatment of financial institutions - the state duty of  exchange offices owned by commercial banks will increase from 3  million drams to 7 million (2.3 fold increase), for universal credit  companies - to 3 million drams from the previous 500 thousand drams  (6-fold growth), and for pawnshops and currency exchange offices, a  60-fold increase in the tax burden is expected. The new regulations,  according to representatives of the sector, are aimed at withdrawing  small players from the market - lenders and currency dealers. At the  same time, they warn that this step will entail the formation of a  "shadow market", which will act out of sight of the Central Bank of  Armenia.

Meanwhile, according to financial analysts of ArmInfo, the measure to  which the Ministry of Finance wants to resort has quite serious  grounds.

First, the problem is the need to withdraw from , first of  all, uncontrollable from the point of view of tax payments, pawnshops  and private currency exchange points, the real turnover of which,  according to some estimates, repeatedly, and hundreds of times in  exchangers reporting figures.

Secondly: The current low thresholds for entering these segments of  the financial market do not justify themselves at all, since, in  contrast to fully accountable and tightly regulated regulations by  the Central Bank of banks and credit companies, pawnshops feel much  more at ease and as a "last resort" for desperate potential  borrowers, use inflated lending rates and less "attentive" to the  assessment of collateral.

Thirdly: the distribution of licenses by the Central Bank of Armenia  to too many pawnshops (127 according to 2018) and private currency  exchange points (213 for 2018) led to the fact that commercial banks  and credit companies began to noticeably lose their positions in the  market both in the credit and foreign exchange segments, while at the  same time incurring much greater obligations to the state as costs.

Therefore, analysts say, it is possible that in fact the government,  with a completely explainable silence of the mega-regulator  represented by the Central Bank of the Republic of Armenia, wants to  kill three birds with one stone: remove the unorganized, including  the gray market, the cash currency market, increase budget revenues  at the expense of state duties and other payments and to clear the  market for the work of commercial banks and credit companies, forcing  all players to work in a single competitive field. 

POST A COMMENT
Input digits     


News
Termination of service of MIR cards. IDBankTermination of service of MIR cards. IDBank
Economic modernization programme portfolio AMD 228bln as of March 1,  2024Economic modernization programme portfolio AMD 228bln as of March 1,  2024
Mobile trade regulations to be in effect throughout Armenia Mobile trade regulations to be in effect throughout Armenia 
Official cites financial reasons for suspension of Fly Arna airline  operation Official cites financial reasons for suspension of Fly Arna airline  operation 
Subsidiary of Public TV of Armenia to have right to nationwide  broadcasting  Subsidiary of Public TV of Armenia to have right to nationwide  broadcasting  
About 700 Armenian heavy cargo trucks waiting to pass through Upper  LarsAbout 700 Armenian heavy cargo trucks waiting to pass through Upper  Lars
Armenian Economy Ministry, several U.S. government departments form  specific action program Armenian Economy Ministry, several U.S. government departments form  specific action program 
Public TV`s First News Channel to be broadcasted not only in Yerevan,  but also throughout countryPublic TV`s First News Channel to be broadcasted not only in Yerevan,  but also throughout country
Ardshinbank cardholders can now enjoy a 10% cashback!Ardshinbank cardholders can now enjoy a 10% cashback!
“G20/OECD Principles of Corporate Governance” workshop“G20/OECD Principles of Corporate Governance” workshop
ECC, EDB to coordinate funding of joint projects ECC, EDB to coordinate funding of joint projects 
Broadcasting of Russian TV channels to be discussed in Moscow soon Broadcasting of Russian TV channels to be discussed in Moscow soon 
Armenia to host World Wine Tourism Conference,Armenia to host World Wine Tourism Conference,
CBA forecasts 5.5% or 6.4% GDP growth for 2024 depending on inflation  rate  CBA forecasts 5.5% or 6.4% GDP growth for 2024 depending on inflation  rate  
Three Sad Stories about FraudstersThree Sad Stories about Fraudsters
Rafayel Gevorgyan: Armenia`s economic growth potential is 6%Rafayel Gevorgyan: Armenia`s economic growth potential is 6%
TEAM already has over 1 million mobile subscribersTEAM already has over 1 million mobile subscribers
Armenia`s ministry of economy proposes new SAFE format Armenia`s ministry of economy proposes new SAFE format 
CBA Governor: Over 11 thousand Artsakh refugees employed in ArmeniaCBA Governor: Over 11 thousand Artsakh refugees employed in Armenia
Armenian economy is approaching neutral interest rate level- Martin  GalstyanArmenian economy is approaching neutral interest rate level- Martin  Galstyan
CBA: external inflationary impact on Armenian economy continues to  weaken significantlyCBA: external inflationary impact on Armenian economy continues to  weaken significantly
Martin Galstyan: It`s too early to talk about threat of overheating  in consumer lending marketMartin Galstyan: It`s too early to talk about threat of overheating  in consumer lending market
Non-cash transactions surpass cash ones in Armenian plastic card  marketNon-cash transactions surpass cash ones in Armenian plastic card  market
CBA reduces refinancing rate by 0.25 pp. setting it at 8.5%CBA reduces refinancing rate by 0.25 pp. setting it at 8.5%
After construction of alternative route, Lars to become passable all  year round - Deputy MinisterAfter construction of alternative route, Lars to become passable all  year round - Deputy Minister
3,780,052 Drams to the City of Smile Fund: The Power of One Dram Will Go to My forest Armenia in March3,780,052 Drams to the City of Smile Fund: The Power of One Dram Will Go to My forest Armenia in March
Global Finance Recognizes Ameriabank`s Leadership in Sustainable Finance in ArmeniaGlobal Finance Recognizes Ameriabank`s Leadership in Sustainable Finance in Armenia
Project to create unified gas market in EAEU postponed until 2027Project to create unified gas market in EAEU postponed until 2027
Amounts exceeding maximum social payments from several sources to be  returned to individualsAmounts exceeding maximum social payments from several sources to be  returned to individuals
Finance Minister considers leaving EAEU riskyFinance Minister considers leaving EAEU risky
Gevorg Papoyan: There cannot be systemic corruption in Ministry of  EconomyGevorg Papoyan: There cannot be systemic corruption in Ministry of  Economy
Minister of Economy: I see no objective reasons for closure of Upper  Lars to Armenian goodsMinister of Economy: I see no objective reasons for closure of Upper  Lars to Armenian goods
Araratbank plans to implement ESG risk management strategy with  environmental, social and corporate management Araratbank plans to implement ESG risk management strategy with  environmental, social and corporate management 
Well-being and future are impossible without compliance with ESG -  Araratbank rep Well-being and future are impossible without compliance with ESG -  Araratbank rep 
Armenia should completely switch to renewable energy - Jon Dee Armenia should completely switch to renewable energy - Jon Dee 
Connection with Europe via Georgia Armenia`s energy priority -  officialConnection with Europe via Georgia Armenia`s energy priority -  official
Half Price for Everyone and up to AMD 15.000 Welcome Bonus for New Customers. IDBankHalf Price for Everyone and up to AMD 15.000 Welcome Bonus for New Customers. IDBank
Armenia`s economic activity increased by 10.7% per annum in Jan 2024Armenia`s economic activity increased by 10.7% per annum in Jan 2024
Deputy PM: there is need to review current water resources management  policyDeputy PM: there is need to review current water resources management  policy
Armenia`s premier meets with Egyptian businessmen Armenia`s premier meets with Egyptian businessmen 
Hovak Hovakimyan: We should not limit ourselves to domestic market in  development of Armenia`s capital marketHovak Hovakimyan: We should not limit ourselves to domestic market in  development of Armenia`s capital market
Garegin Gevorgyan: Armenia can become trading hub for foreign  securitiesGaregin Gevorgyan: Armenia can become trading hub for foreign  securities
Doing Digital Forum Returns Featuring Brett King as Keynote SpeakerDoing Digital Forum Returns Featuring Brett King as Keynote Speaker
Decline in Armenia`s consumer prices was caused by food products;  while prices for services and gasoline were on riseDecline in Armenia`s consumer prices was caused by food products;  while prices for services and gasoline were on rise
FLYONE ARMENIA offers number of new destinations this summerFLYONE ARMENIA offers number of new destinations this summer
Gevorg Papoyan appointed Armenia`s minister of economyGevorg Papoyan appointed Armenia`s minister of economy
Samvel Khanvelyan: Armenia`s domestic debt market is Samvel Khanvelyan: Armenia`s domestic debt market is "limping" in  terms of investment base and structure 
Armenian capital market is at its initial stage of development -  Deputy MinisterArmenian capital market is at its initial stage of development -  Deputy Minister
Armenia should be among world leaders in a number of technological  areas - expertArmenia should be among world leaders in a number of technological  areas - expert
Google Pay is now accessible for Armswissbank Mastercard cardholdersGoogle Pay is now accessible for Armswissbank Mastercard cardholders
Number of vPOSs in Armenia already exceeds 4.5 thousandNumber of vPOSs in Armenia already exceeds 4.5 thousand
2-3 nuclear power units with capacity of 200 MW each would make it  possible to more effectively manage country`s energy system - PSRC  Chair2-3 nuclear power units with capacity of 200 MW each would make it  possible to more effectively manage country`s energy system - PSRC  Chair
ADB to provide  $3 million grant to Armenia to increase agricultural  flexibility and improve food security in rural areasADB to provide  $3 million grant to Armenia to increase agricultural  flexibility and improve food security in rural areas
By accepting 20% stake in MTS Armenia as gift, government sends  message to other companies:  PashinyanBy accepting 20% stake in MTS Armenia as gift, government sends  message to other companies:  Pashinyan
Micro-processing cards with NFC chip account for almost 70% of total  number of cards in Armenia, already reaching 2.6 millionMicro-processing cards with NFC chip account for almost 70% of total  number of cards in Armenia, already reaching 2.6 million
A Millionaire Wanted: New Draw from IdramA Millionaire Wanted: New Draw from Idram
PSRC: construction of Mets Masrik  industrial-scale solar power plant  in Armenia is nearing completionPSRC: construction of Mets Masrik  industrial-scale solar power plant  in Armenia is nearing completion
Wizz Air launches Budapest-Yerevan-Budapest direct flights Wizz Air launches Budapest-Yerevan-Budapest direct flights 
Temporary ban on gasoline exports from Russia will not affect ArmeniaTemporary ban on gasoline exports from Russia will not affect Armenia
14 Armenian tech companies participate in Mobile World Congress in  Barcelona14 Armenian tech companies participate in Mobile World Congress in Barcelona
Read more


Exchange rates
18.03.2024
RUB4.37-0.01
USD401.96-0.67
EUR438.10-0.36
GBP511.98-1.33
CAD296.82-0.70
JPY26.96-0.10
CNY55.84-0.11
CHF455.17-0.60