In Armenia, the threshold for the maximum amount of guaranteed  deposits of individuals in the country`s commercial banks will be  raised

ArmInfo. In Armenia, the threshold for the maximum amount of guaranteed deposits of individuals in the country's commercial banks will be raised.

The Commission on Financial-Credit and Budgetary Issues of the RA  National Assembly at the sitting on September 8 issued a positive  opinion on the amendments to the law "On Guaranteeing Reimbursement  of Individuals' Bank Deposits" presented in the second reading by the  NA deputy from the Prosperous Armenia faction Mikael Melkumyan.

According to Mikael Melkumyan, the amendments presented are the  result of a joint legislative initiative with the Central Bank. It is  about raising the threshold for AMD deposits from the current 10  million drams to 16 million drams, and for foreign currency deposits  - from the current 5 million drams (in currency equivalent) to 7  million drams. At the same time, Melkumyan stressed that this  legislative initiative does not envisage an increase in quarterly  payments from RA commercial banks in the amount of 0.05% to the  Deposit Guarantee Fund. A similar need arose as a result of the  study. According to this study, it was revealed that over the past 5  years the number of depositors in the country has decreased. At the  same time, a legislative initiative is needed to increase the  coverage of deposit insurance, which currently accounts for 41.5%.  According to Mikael Melkumyan, by increasing the threshold, this  indicator will be increased to 45%, thereby covering large  depositors, whose share is about 1.5% in quantitative terms. However,  in terms of the volume of invested funds, the share of large  investors accounts for over 60%. It should be noted that according to  the financial rating of Armenian banks as of December 31, 2019,  prepared by ArmInfo IC, the volume of deposits (demand and time) in  the banking system of Armenia amounted to 3.5 trillion drams ($ 7.3  billion), with an annual growth of 20.7% ... Of these, about 1.95  trillion drams or $ 4.1 billion are deposits of individuals (demand  and time), with an annual growth of 14.8%. In the total volume of  total liabilities of the banking system of Armenia, the share of time  deposits is about 43% or 2.2 trillion. drams ($ 4.4 billion), of  which over 71% are time deposits of individuals. On an annualized  basis, the volume of term deposits of the RA banking system increased  by 14%. The ratio of the total volume of demand and time deposits to  Armenia's GDP at the end of 2019 reached 54%, against 45% in 2018.