Wednesday, March 20 2019 19:04
Alina Hovhannisyan

Seyran Sargsyan: Prolongation of the amnesty for fines / penalties on  bad loans - will be the wrong message for clients

Seyran Sargsyan: Prolongation of the amnesty for fines / penalties on  bad loans - will be the wrong message for clients

ArmInfo. "It should be conveyed to clients that we cannot expect further extension of the terms of the amnesty of fines and penalties for bad loans, otherwise it will  be an incorrect message to the population," Executive Director of the  Union of Banks of Armenia Seyran Sargsian told ArmInfo  correspondent.

According to S. Sargsyan, there is a need to explain to the  population the position of the bank in terms of its readiness to help  borrowers in restoring and servicing the loan, and to demand the same  from clients.At the same time, when asked whether to extend the  amnesty, S. Sargsyan answered: "This is an exclusively political  question. Having previously conducted monitoring, it was revealed  that as a result of the amnesty of fines and penalties for problem  loans, the process of servicing loans to borrowers was greatly  simplified.  As a result, the government amended the law and launched  this amnesty program. That is, it was the decision of the  authorities, reflecting their readiness. Consequently, the government  must then decide whether it is ready to take such a step again or  not>.

Recall that July 2, 2018. The Prime Minister held a meeting with the  bankers in the government of the Republic of Armenia in order to  practically address the issue of concessions of fines and penalties  for problem loans. On the same day, ACBA-Credit Agricole Bank and  Ameriabank announced the cancellation of fines and penalties on bad  loans of individuals, and the next day IDBank joined this process,  then July 4 - VTB Bank (Armenia), July 6 - Ardshinbank, July 11 -  Converse Bank. Later and the rest of the banks. At that time, banks  applied amnesty on fines and penalties of loans classified as  uncollectible until May 31, 2018, and announced the final date for  filing applications for amnesty on December 31, 2018.

After that, in January 2019, only one bank - IDBank announced the  extension of the deadline for submission of applications until August  of this year.According to the Financial Ratings of Banks of Armenia  as of December 31, 2018, prepared by ArmInfo IC, overdue loans in the  banking system of Armenia accelerate growth - their volume increased  by 19.4% in 2018, against a meager 0.4% growth in 2017. Due to the  upward dynamics of overdue loans, the share of NPL in the loan  portfolio increased by the end of 2018 to 9.4% from 8.3% in 2017. In  the loan portfolio of3.2 trillion drams ($ 6.7 billion, with an  annual growth of 14%) overdue loans accounted for 306.5 billion drams  ($ 633.5 million). Of these, over 34% is accounted for by a hopeless  group, which dominated the structure of overdue loans a year earlier  (60.2%). The bulk of bad loans went into consumer loans (including  mortgages) - 34%, the commercial sector - 17%, the agricultural  sector - 14% and industry - 8%. In the total volume of overdue loans,  these areas also dominate: consumer loans (including mortgages) -  32%, trade - 14%, industry - 12% and the agricultural sector - 11.5%.  Nonetheless, the government initiative for the amnesty of fines /  penalties for bad loans with concomitant refinancing, launched last  year, which banks started to implement without delay, allowed for a  net profit growth of 79% in 2018.

POST A COMMENT
Input digits     


News
Water tariff to not change in Armenia in 2024 at expense of subsidies  from state treasuryWater tariff to not change in Armenia in 2024 at expense of subsidies  from state treasury
Armenia`s gross international reserves even farther from historical  maximumArmenia`s gross international reserves even farther from historical  maximum
Armenia to take out EUR 92.3mln from WB to cover budget deficit  Armenia to take out EUR 92.3mln from WB to cover budget deficit  
Armenia, Kazakhstan to establish joint business club  Armenia, Kazakhstan to establish joint business club  
Bolat Imanbayev: Armenia-Kazakhstan trade and economic relations are  developing dynamically; nevertheless, they do not reflect  countries`  full economic potentialBolat Imanbayev: Armenia-Kazakhstan trade and economic relations are  developing dynamically; nevertheless, they do not reflect  countries`  full economic potential
Kazakhstan offers Armenia to consider new alternative logistics routeKazakhstan offers Armenia to consider new alternative logistics route
Dependence of Armenia`s economic activity on jewelry industry could  cause problems - Luys FoundationDependence of Armenia`s economic activity on jewelry industry could  cause problems - Luys Foundation
AraratBank places its 27th issue of dollar bondsAraratBank places its 27th issue of dollar bonds
Viva-MTS changes its company name to Viva ArmeniaViva-MTS changes its company name to Viva Armenia
Deputy Minister of Economy: Armenia-Russia cooperation potential may  be realized through cooperation projects in production sectorDeputy Minister of Economy: Armenia-Russia cooperation potential may  be realized through cooperation projects in production sector
Team Systems contributes to smart technology development Team Systems contributes to smart technology development 
Who will be beneficiaries of tax amnesty in ArmeniaWho will be beneficiaries of tax amnesty in Armenia
Belarus bans import of Ararat Brandy Company products Belarus bans import of Ararat Brandy Company products 
5 000 dram Bonus from IDBank for Pension Card Holders5 000 dram Bonus from IDBank for Pension Card Holders
Armenia`s public debt reaches $12 billionArmenia`s public debt reaches $12 billion
Price index of industrial products is decreasing in ArmeniaPrice index of industrial products is decreasing in Armenia
Industrial sector driver of economic activity in Armenia Industrial sector driver of economic activity in Armenia 
Armenian CB issue s new collector coins Armenian CB issue s new collector coins 
99.8% defense budget performance in 202399.8% defense budget performance in 2023
IDBank issues the 1st tranche of dollar bonds of 2024IDBank issues the 1st tranche of dollar bonds of 2024
AFD delegation presented with details of Vedi reservoir construction  and irrigation network modernization projectAFD delegation presented with details of Vedi reservoir construction  and irrigation network modernization project
Parliamentarian: Armenia attaches great importance to using  opportunities of digital transformationParliamentarian: Armenia attaches great importance to using  opportunities of digital transformation
DPM: we need not only quantitative increase, but also qualitative  changes in urban development field DPM: we need not only quantitative increase, but also qualitative  changes in urban development field 
​​​​​​​IDBank as a Participant in the Conference of My Forest Armenia NGO​​​​​​​IDBank as a Participant in the Conference of My Forest Armenia NGO
ENA bonds quotation in volume of AMD 32 billion to start on AMX from  March 27ENA bonds quotation in volume of AMD 32 billion to start on AMX from  March 27
Switzerland launches SIGMA program with total budget of CHF 12  million Switzerland launches SIGMA program with total budget of CHF 12  million 
Armenia`s State Revenue Committee launches e-system of income  statement presentation  Armenia`s State Revenue Committee launches e-system of income  statement presentation  
Armenia`s ranking in Index of Economic Freedom decreased by 0.2 pp  over yearArmenia`s ranking in Index of Economic Freedom decreased by 0.2 pp  over year
France to sponsor establishment of cheese-making school in Armenia`s  Tavush France to sponsor establishment of cheese-making school in Armenia`s  Tavush 
The South Caucasus Railway will suspend the sale of tickets using MIR cards The South Caucasus Railway will suspend the sale of tickets using MIR cards
Azerbaijan continues attempts to Azerbaijan continues attempts to "hit" Armenian nuclear power plant
Armswissbank participates in gcf regional dialogue in skopjeArmswissbank participates in gcf regional dialogue in skopje
IDBank issues the 1st tranche of dollar bonds of 2024IDBank issues the 1st tranche of dollar bonds of 2024
Extending ANPP`s lifetime until 2036 will lay solid foundation for  smooth transition to new power unit - Pashinyan at Nuclear Energy  SummitExtending ANPP`s lifetime until 2036 will lay solid foundation for  smooth transition to new power unit - Pashinyan at Nuclear Energy  Summit
Armenia`s government approves order of quality prize awards Armenia`s government approves order of quality prize awards 
International Client’s Day at IDBankInternational Client’s Day at IDBank
Germany to provide loan for Armenia`s renewable energy sector Germany to provide loan for Armenia`s renewable energy sector 
2023 lending growth insufficient to prevent decline in profits -  Financial Rating of Banks of Armenia2023 lending growth insufficient to prevent decline in profits -  Financial Rating of Banks of Armenia
Iran interested in cooperating with Armenia in mining industry Iran interested in cooperating with Armenia in mining industry 
Armenian government plans to introduce SAFE format Armenian government plans to introduce SAFE format 
Service of Armenian ArCa cards in Russia and of Russian MIR cards in  Armenia to be suspended Service of Armenian ArCa cards in Russia and of Russian MIR cards in  Armenia to be suspended 
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
Read more


Exchange rates
28.03.2024
RUB4.270.00
USD394.46-0.25
EUR425.62-1.93
GBP497.65-0.91
CAD290.11-0.27
JPY26.06-0.05
CNY54.57-0.05
CHF435.72-0.13