Banks
Commercial banks play a key role in Armenian financial system. .
CBA regulations encourage responsible lending practices, capital adequacy, and proper risk management within banks. This helps us prevent banks from taking excessive risks that could destabilize our financial system. We also ensure that banks treat their customers fairly and transparently.
Market Access
We set market entry procedures and requirements for banks to ensure that new banks have the necessary capital and resources to operate safely and avoid risks to depositors, to prevent excessive risky practices or instability in the banking system.
The licensing procedure starts upon submitting a letter of request for obtaining prior approval for the licence and ends when the licence is issued or the application for obtaining a licence is rejected.
Bank Licensing stages are:
- prior approval for obtaining a licence.
- registration of a bank or a branch of a foreign bank.
- issuance of a licence.
For the licensing of banks, requirements are set for capital, corporate governance, technical equipment, premises and other requirements.
Supervision
CBA is responsible for prudential supervision and it is continuously monitoring the financial stability and soundness of banks operating in the Republic of Armenia. The main objectives are conducting on-site examinations and off-site surveillance of regulated banks, ensuring compliance with regulatory standards established by CBA, checking the reliability of weekly, monthly, and quarterly reports submitted by the banks, identifying, analyzing, and evaluating existing financial risks, and taking measures aimed at reducing risks and stabilizing the financial condition of banks.
Once a year, the CBA carries out the Supervisory Review and Evaluation Process (SREP) and forms a summary assessment of the banks’ annual indicators based on the reports submitted by the banks to the CBA. The core principles of SREP include assessing banks’ business model and profitability, effective governance and risk management, risks to capital, and risks to liquidity and funding. In its analysis of institutions’ financial condition and operational soundness, the BPSS analyzes the financial condition of the banks, forecasts and actual performance of prospective strategic plans, and evaluates the internal and external audit and bank management bodies.
Resolution/Exit from Market
CBA’s regulation sets market exit requirements for banks to ensure the orderly and safe winding down of a bank through resolution or liquidation in the event of failure, protecting depositors, creditors, and the overall financial system
The primary objective of the CBA’s Financial Institutions Resolution Service (RS) is to ensure adequate preparedness for the orderly exit of financial institutions. The RS is responsible for preparing resolution plans for all commercial banks. These plans involve determining each bank’s resolution strategy and assessing their resolvability. At the same time when all the grounds for resolution or liquidation are met, the RS initiates relevant processes and maintains continuous oversight of these institutions.
The regulations for banking resolution are formulated in accordance with the international standard "Key Attributes of Effective Resolution Regimes for Financial Institutions" endorsed by the Financial Stability Board (FSB).
List of banks licensed by the Central Bank
List of banks in the process of liquidation