ArmInfo.From December 1, 2020, an increased threshold for guaranteed bank deposits will come into force: for AMD deposits, a deposit of 16 million AMD is covered by the guarantee instead of the previous 10 million AMD, and for foreign currency deposits - an amount equivalent to 7 million AMD instead of the previous 5 million AMD. The Union of Banks of Armenia reminds of this in a message spread on December 1.
According to the amendments introduced to the RA Law "On Guaranteeing Bank Deposits of Individuals", the following thresholds also apply in case a depositor has both AMD and foreign currency deposits. So, if the amount of the AMD deposit exceeds 7 million AMD, then only the AMD deposit of up to 16 million AMD is guaranteed. And if the size of the AMD deposit is less than 7 million AMD, then the AMD deposit is guaranteed in full and the foreign currency deposit in the amount equal to the difference between 7 million AMD and the amount of the guaranteed AMD deposit.
These new increased deposit guarantee thresholds also apply to existing deposit agreements. The purpose of this law is to help improve the reliability of the banking system of Armenia and ensure the protection of the interests of depositors. The law specifies: "All deposits of a depositor in the same bank are considered one deposit, and also applies to foreign currency deposits. And if a depositor keeps deposits in different banks of Armenia, they are guaranteed in each bank in the amount of the maximum threshold." Guaranteed deposits are reimbursed by the Deposit Guarantee Fund. According to the Financial Rating of Banks of Armenia as of September 30, 2020, prepared by ArmInfo IC, the volume of bank deposits of individuals (on demand and urgent) exceeded 2 trillion drams ($ 4.1 billion), with a slowdown in annual growth from 13% to 10%. 75% or more 1.5 trillion drams ($ 3.1 billion) falls on term deposits of individuals, with an annual growth of 7.1%. In the structure of time deposits, the share of individuals' funds accounts for 69.6%, against 71.6% a year earlier.
