PARLIAMENT OF ARMENIA ADOPTS BILL ON ALL ARMENIAN BANK
ArmInfo
2008-12-24 13:50:00
Parliament of Armenia adopted a Bill on the All Armenian Bank in
the first reading with 103 votes ‘for’, 3 votes ‘against’ and no
‘abstention’ Wednesday.
Central Bank Chairman Artur Javadyan declared that the bank will
have a status of an open joint stock company. Central Bank and any
other subject of the law will come out as the shareholder on behalf
of the Republic of Armenia. It will become a universal development
bank. The key goal of the bank will be to contribute to formation
of the Diaspora potential based on knowledge and competition in
the international market. The Bank will receive relevant license to
function as a commercial bank. Armenian Central Bank will control
over the activity of the All Armenian Bank. The authorized capital
of the Bank is to be at least 5 billion drams, the standard for
commercial banks in Armenia. The side of the authorized capital,
which is envisaged at the level of 100 million dollars or 30 billion
drams, will be defined in the Bank’s business program. The share
of the government in the authorized capital of the bank will be at
least 20%, the remaining shares will be offered to representatives
of business cycles, entrepreneurs, and ordinary citizens including
non-residents. The Bank will have executive body and directorate. The
head and the members of the Bank Council will undergo attestation
by the Armenian CB. A. Javadyan said Central Bank of Armenia plans
to approve 6 billion drams to the Bank on behalf of the Republic of
Armenia. The bank will make investments only in profitable projects
and compete with local commercial banks. The Bank will announce
its programs at least on 1 November of each year. The program are to
undergo relevant examination and data on the programs will be available
at the Bank’s website. The Bank will also get an opportunity to take
big deposits.
Management structures will be created at the bank on the basis of
corporate management principles. The Bank’s activity will meet the
activity of local commercial banks. Thus, annual activity of the Bank
is to undergo compulsory international audit. The Bank will also get
opportunity to place funds in the securities market.
Governmental Council for Competitiveness will supervise the
activity of the All Armenian Bank. The programs prior to the
Council for Competitiveness and the Government will become prior
also to the Bank. These are programs in the sectors of education,
tourism, health care, science, finance and infrastructures. The
Bank will receive also certain taxation privileges. In particular,
it will be exempted from profit tax that will be used to implement
business-project of Diaspora. In addition, the bank will pay state
tax for registration and license. In this connection, alterations and
amendments are proposed in the first reading to the Laws On Income
Tax, On State Tax and On Banks and Banking Activity. A. Javadyan
said the Bank will operate outside Armenia and finance projects
by representatives of Armenian Diaspora. Projects in Armenia will
be implemented with direct involvement of local commercial banks
through syndicated loans. Thus, when implemented a 30 billion drams
project, the Bank will provide 80% of funds, and commercial banks
will allocate the remaining 20%. In the territory of Armenia the
All Armenian Bank will not directly participate in financing of
projects. The Bank will have branches in various states. The Bank
will have 11 members that will receive award fees (if it is a foreign
citizen) for travel and residence costs etc.. The members of the Bank
will be Armenian prime minister, finance minister, economy minister,
chairman of Central Bank, agricultural minister, minister of transport
and communication and the most prominent representatives of Armenian
Diaspora representing foreign business-cycles and banks. The bank’s
activity will be transparent. The bank will be found and registered
in an accelerated regime within 3 months instead of usual 6-12 months
required for registration of commercial banks.
The governmental initiative caused controversy of some parliamentarians
mainly oppositionist. In particular, they demanded compulsory
participation of a parliamentarian in the Bank Council to toughen
control over the activity of the Bank. Since the government will hold
at least 20% stake in the Bank, the parliamentarians proposed that
the Bank makes compulsory reports to the parliament.