LAW OF THE REPUBLIC OF ARMENIA

of June 22, 2002 No. ZR-359

About credit institutions

Accepted by National Assembly of the Republic of Armenia on May 29, 2002

Chapter 1. General provisions

Article 1. Subject of regulation of the Law

This Law regulates procedure and conditions of control of licensing, activities regulation, activities of credit institutions, including credit unions, savings unions, leasing, factoring organizations and other credit institutions, and also procedure for change of type of activity of the banks operating in the territory of the Republic of Armenia.

Operation of this Law does not extend to banks (except as specified, provided by Chapter 6 of this Law), the insurance companies, persons performing professional activity in the security market, the pension funds, investment companies, investment funds managing investment fund, pawnshops, agricultural credit clubs which activities are regulated by other laws and legal acts.

Article 2. Legal regulation of activities of credit institutions

1. Activities of credit institutions are regulated by the Constitution of the Republic of Armenia, the Civil code of the Republic of Armenia, this Law, other laws of the Republic of Armenia, international treaties of the Republic of Armenia, and in provided by the law sluchayakhnormativno-legal acts of the Central bank of the Republic of Armenia (further - the Central bank).

2. The procedure of insolvency and bankruptcy of credit institutions is established by the Law of the Republic of Armenia "About bankruptcy of banks, the credit institutions managing investment fund and insurance companies".

The bases and procedure for liquidation of credit institutions are established by Chapter 9 of the Law of the Republic of Armenia "About banks and banking activity".

3. If international treaties of the Republic of Armenia establish other regulations, than those which are provided by this Law then are applied regulations of international treaties.

Article 3. Determination of credit institution and its activities

1. Credit institution - the legal entity who obtained the license in the procedure established by this Law who has the right to perform the types of activity established by this Law.

2. Activities of credit institution attraction of loans, and (or) the conclusion of similar transactions, and (or) loan granting, or introduction of other deposits provided by this Law as business activity is considered.

In sense of the legislation of the Republic of Armenia regulating activities of credit institutions treat similar transactions also public release investment (bond) and payment securities (except for the securities issued by investment funds) or the conclusion of transactions which lead to origin at credit institution of monetary commitments, but are not connected with sale by credit institution to the creditor of goods, rendering services to it or accomplishment of works for it.

3. To other persons, except for banks and credit institutions, and also investment funds and managing investment funds, it is forbidden to perform any activities, stipulated in Item 2 these Articles in the Republic of Armenia.

4. The credit institution can be created in form of business of limited liability company, joint-stock company or commercial cooperative. The savings unions can be created only in the form of cooperatives.

5. For activities of credit institutions the Central bank can set certain restrictions, permitting or limiting part of functions, the stipulated in Article 8 these Laws. At the same time such restrictions can be set on attraction of means by credit institutions and the sizes of these means, placement of means by credit institutions and the sizes of these means, and also for the group of people which funds the credit institution can raise and (or) among which the credit institution can distribute funds. The restrictions provided by this Item shall be identical to credit institutions of the same type (group), except as specified, stipulated in Item 3 articles 8 of this Law.

6. In sense of this Law, other laws and regulatory legal acts of the Republic of Armenia regulating activities of credit institutions, as types (groups) of credit institutions are considered:

a) credit unions which raise money of the participants and provide these means to them, and in the cases provided by regulatory legal acts of the Central bank raise money also of other persons or present them to these persons;

b) the savings unions which raise money of the participants and provide these means to them;

c) the leasing organizations which main activities is the conclusion of transactions on leasing according to the procedure and on the conditions established by paragraph 6 of Chapter 35 of the Civil code of the Republic of Armenia;

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