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LAW OF THE REPUBLIC OF ARMENIA

of July 12, 2008 No. ZR-124

About attraction of bank deposits

(as amended on 07-04-2021)

Accepted by National Assembly of the Republic of Armenia on June 17, 2008

The purpose of this Law is establishment of single rules concerning conditions and procedure for attraction of deposits of citizens by banks and consumer protection by means of these rules.

Article 1. Subject of regulation of the Law

1. This Law regulates framework of information revealed during attraction of deposits of citizens by banks, procedure and conditions of provision of this information, advertizing of deposit agreements, calculations of deposit interests, and also other legal relationship protecting the rights and lawful duties of investors.

Article 2. The basic concepts used in the Law

1. In this Law the following basic concepts are used:

1) bank deposit (further - contribution) - the bank deposit or money which are available on the bank account;

2) the deposit agreement - the agreement signed for the purpose of attraction of the contribution established by this Law;

3) the investor - the citizen who signed the deposit agreement;

4) bank - whether bank the branch of foreign bank which obtained the license for implementation of banking activity from the Central bank of the Republic of Armenia (further - the Central bank);

5) rates - the payments for services of bank made by the investor for transactions on servicing of contribution, or other payments reducing annual percent yield, except for the payments made as penalty fee;

6) annual percent yield (Annual Percentage Yield or APY) - percent which person will receive owing to the frequency of application of simple annual interest rate during the 365-day period for 1000 dram of contribution and capitalization (compounding) and interest payment. Central Bank the regulatory legal acts can establish procedure of payments of annual percent yield;

7) the size of annual simple interest rate (Annual Rate of Simple Interest) - the size of the interest rate calculated in annual section, paid during each process of capitalization of percent;

8) penalty fee (penalty, penalty) - compensation paid to bank in case of failure to carry out or inadequate accomplishment by the investor of the obligations, either decrease in annual percent yield or emergence of any other consequence, adverse for the investor;

9) the Conciliator of financial system - person identified by the Law of the Republic of Armenia "About the Conciliator of financial system".

Article 3. Information which is subject to publication

1. Any advertizing, the announcement, the offer, the offer or the invitation to the offer connected with attraction of deposits, the conclusion of deposit agreements, performed by bank in the Republic of Armenia or placed in the Internet which contains specifying the size of the certain interest rate paid for contribution, profitability or any other compensation shall include, at least, in Armenian (except for newspapers and other editions issued in foreign languages), is clear also without any tangled, intricate or misleading formulations:

1) the extent of the annual percent yield calculated according to the procedure, established by the Central bank;

2) effective period of the deposit agreement during which the investor will receive the promised annual percent yield;

3) the size of the minimum remaining balance of the account and the period or temporary restrictions required for ensuring annual percent yield;

4) the size of the minimum initial deposit amount required for ensuring annual percent yield if the size of this amount exceeds the size of the minimum remaining balance of the account required for ensuring annual percent yield;

5) if for this type of the account the bank provides or establishes the rates or other conditions reducing annual percent yield, then the announcement that as a result of application of the rates established by bank or other conditions annual percent yield can decrease;

6) if for this type of the account any penalty fee, then the announcement of cases of application of such penalty fee is provided or established;

7) announcement of the taxation of the percentage amounts.

2. If any advertizing, the announcement, the offer, the offer or the invitation to the offer connected with attraction of deposits, the conclusion of deposit agreements, performed by bank in the Republic of Armenia or placed on the Internet mention that compensation of contribution is guaranteed by the fund guaranteeing compensation of deposits, then shall include information in Armenian, is clear also without any tangled, intricate or misleading formulations, about the sizes of the guaranteed contribution according to the procedure, established by the Law of the Republic of Armenia "About guaranteeing compensation of bank deposits of physical persons". Use of other languages parallel to Armenian is not forbidden.

3. Information provided by Items 3, of 4, 5 and 6 parts of 1 this Article is not subject to obligatory publication in case of broadcast on television or by means of external billboards of advertizing, the announcement, offer, offer or invitation to the offer. The advertizing provided by this part contains specifying about where it is possible to get acquainted with conditions of the advertized contribution.

4. For some types of the data provided by part of 1 this Article the Central bank the regulatory legal acts can establish the texts or forms or the minimum requirements which are subject to obligatory application.

Article 4. Information reports

1. The bank shall for each type of the deposit agreement suggested them to approve and have the information report on rates, interest rates, annual percent yield, penalty fee and procedure and conditions of attraction of deposits. Information reports about all types of deposit agreements can be also united in one single information report provided that the single information report will contain information on each type of the deposit agreement established by this Law.

2. Each information report approved by bank and provided to citizens shall clearly and without any tangled, intricate or misleading formulations, at least, to contain the following":

1) information on rates and penalty fee, in particular:

and. the description, the sizes levied from the account or whether the rates paid by the investor of penalty fee (or methods of their calculation) and cases, procedure and conditions of application;

. in case for non-compliance with the minimum remaining balance of the account rates or penalty fee - the sizes of the minimum remaining balance of the account or method of calculation of the minimum remaining balance are collected;

2) information on interest rates, in particular:

and. the extent of annual percent yield calculated according to the procedure, established by the Central bank;

. effective period of the deposit agreement during which the investor will receive the promised annual percent yield;

century size of simple annual interest rate;

frequency of capitalization (compounding) and interest payment;

method of calculation of remaining balance of the account concerning which percent will be paid;

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