CENTRAL BANK OF ARMENIA IMPOSED RESTRICTIONS ON PARTICIPATION OF LOCAL BANKS IN THE INTERNATIONAL PAYMENT SETTLEMENT SYSTEM WESTERN UNION

Banking and Stock Exchange, Finance, Economics (Russia)
August 27, 2008 Wednesday

Reference: Yulia Lokshina "Untransferable", Gazeta, No 160, August 26,
2008, p.13

"A decision was made to decrease risks for banks, since Western Union
violated terms of agreements with commercials banks conducting business
in Armenia without any grounds or reasons," the Central Bank of the
republic reports.

The public relations department of the Central Bank of Armenia said
that they didn’t know if this prohibition would be temporarily or
permanent. However, if customers are not served in some branches
of banks, it could ruin the usual procedures of banks and their
financial standing and even cause unforeseeable developments in
the money transfer sector. The Russian office of Western Union said
that the company hadn’t received any grievances from Armenian banks
concerning issues, to which the Central Bank referred. Nevertheless,
Western Union will hold negotiations with Armenian banks concerning
the further conditions of provision of services in the country and
ways to settle the dispute.

"The cash flow between Russia and Armenia is rather high and if banks
are prohibited to deal with Western Union, other payment transfer
systems will turn it to advantage," Igor Duda, first deputy chairman
of the board of Sobinbank, maintains.