ArmInfo. The Central Bank of the Republic of Armenia intends to introduce new regulation to contain risks associated with an increase in consumer lending. On December 6, Nerses Yeritsyan, Deputy Chairman of the Central Bank of the Republic of Armenia, stated this from the parliamentary tribune. According to him, this does not concern the containment of growth in consumer loans, and it is about risk management.
"Especially since the country has formed new infrastructures for this, particularly a national credit bureau. Regulation is based on the analysis of the ratio "loans-incomes", from the point of view of ensuring the conformity of loans borrowed by citizens to their incomes, in order to avoid substantial and excessive debt burden. The new regulation will also affect the ratio of assets-loans>. With an increase in the value of assets, it will be possible to provide loans in large volumes. In any case, risk assessment is carried out by commercial banks. The Central Bank intends to introduce a number of adjustments in this process>, - N. Yeritsyan explained.
It should be reminded that earlier, on November 29, at the conference organized by the initiative of the NA Standing Committee on Financial-Credit and Budgetary Affairs, the Head of the Department for Sustainable Development of the Financial System of the Central Bank of the Republic of Armenia Andranik Grigoryan stated that the Central Bank of Armenia was considering introducing a calculation coefficient maximum debt load of individuals for commercial banks and credit companies of the Republic of Armenia.
As he noted, the need to introduce a debt burden indicator (in international practice - PTI, payment to income - Ed. note) s explained by the intention to protect borrowers from over-lending. In particular, during the processing of consumer loans of all types, including "quick" loans, mortgages, payments on them subsequently become unbearable for borrowers. As A. Grigoryan explained, PTI is the ratio of monthly loan payments to monthly income. In this regard, he drew attention to the fact that when approving a loan, the borrower himself is often not able to assess what kind of debt load he ends up with.
According to the CBA, the volume of consumer loans in the banking system of Armenia by November 2019 accelerated annual growth from 34.5% to 35%, amounting to 875.3 billion drams ($ 1.8 billion). And the volume of mortgage loans accelerated annual growth from 22% to 39.7%, amounting to 331.2 billion drams ($ 696 million). By November 2019, the share of consumer loans in the total loan portfolio of Armenian banks amounted to 28.2%, and mortgage loans - 10.7%.