Central Bank is considering the possibility of introducing a  coefficient for calculating the payment to income ratio for banks and  credit companies

ArmInfo. The Central Bank of Armenia is considering introducing a coefficient for calculating the payment to income ratio for commercial banks and credit companies  of the Republic of Armenia. On November 29, Andranik Grigoryan, Head  of the Department for Sustainable Development of the Financial System  of the Central Bank of the Republic of Armenia, announced this at a  conference dedicated to financial literacy and lending organized by  the initiative of the Standing Committee of the National Assembly of  the Republic of Armenia on Financial-Credit and Budgetary Affairs.

As he noted, the need to introduce an indicator of PTI ( payment to  income) is determined by the intention to protect borrowers, in  particular during applying for consumer loans of all types, including  "quick" loans, mortgages, payments which subsequently place a heavy  burden on their shoulders. As explained by Grigoryan, PTI is the  ratio of monthly loan payments to the monthly income of the borrower.  In this regard, he drew attention to the fact that the borrower  himself can't assess the load he will ultimately receive if a loan is  approved: "Therefore, we want to resolve this issue by introducing a  similar coefficient".

In her turn, the RA financial ombudsman Piruz Sargsyan noted that the  most urgent problems that citizens turn to the office of the  financial mediator concern consumer loans, namely, non-informing or  untimely informing of citizens. The second group of problems relates  to mechanisms for calculating interest rates, fines and penalties. At  the same time, according to the financial ombudsman, many complaints  come from individuals acting as guarantors of loans.

In this context, the head of the Union of Credit Companies of the  Republic of Armenia Khoren Kerobyan drew attention to the extremely  poor financial literacy of residents of remote settlements, despite a  number of ongoing Central Bank programs in rural areas of the  Republic of Armenia.