of June 30, 1996 No. ZR-68
About banks and banking activity
Accepted by National Assembly of the Republic of Armenia on June 30, 1996
This Law determines procedure and conditions of registration, licensing of the banks created and operating in the territory of the Republic of Armenia, their branches, representations, and also branches, representations, operational offices (Items) of foreign banks, procedure and conditions of regulation and the termination of their activities, control of banking activity.
1. The bank system of the Republic of Armenia includes the Central bank of the Republic of Armenia (further - the Central bank), the banks operating in the territory of the Republic of Armenia (including subsidiary banks), their branches, representations, operational offices (Items), and also branches operating in the territory of the Republic of Armenia and representative offices of foreign banks.
2. Activities of banks in the territory of the Republic of Armenia are regulated by this Law, the laws of the Republic of Armenia "About the Central bank of the Republic of Armenia", "About bankruptcy of banks, the investment societies managing investment societies, credit institutions and the insurance companies", "About bank secrecy", other laws, and in the cases and limits provided by them - regulations of the Central bank. Additional requirements to activities of bank as member of financial group, are established by the Law of the Republic of Armenia "About the Central bank of the Republic of Armenia".
3. Features of the all-Armenian bank are established by the Law of the Republic of Armenia "About the all-Armenian bank".
The main objective of this Law is ensuring development, reliability and normal functioning of bank system and creation of equal conditions of the free economic competition for activities of banks.
1. Bank - the legal entity having the right to perform banking activity based on the license granted in the procedure established by this Law.
2. Banking activity acceptance of deposits or the address with the offer to accept deposits and their placement from name and with risk accepting contribution by loan granting, deposits, deposits and (or) implementation of investments is considered.
Without the license for banking activity granted by the Central bank (further the license) implementation of banking activity in the territory of the Republic of Armenia is forbidden.
The sum of money provided to person which conditions of provision conform to the requirements established for bank deposit agreement provided by the Civil code of the Republic of Armenia and which is not provided in the consent of the investor to accept risk of its use or is considered bank deposit it is not provided as compensation for employment or property acquisition, property rights, for works or rendering services or as instrument for ensuring of the obligation.
1. "Bank" or its derivatives only persons having the license, their branches, representations can use the word in the names unless right to use of the above-stated word is stipulated by the law or the international treaty or if "bank" follows from sense of use of the word that it is not about bank activities.
2. Banks have no right to use in the name such disorienting words which can form the basis for the distorted idea of financial position or legal status of bank.
3. "Bank" or its derivatives in advertizing, the public offer is also forbidden to use the word or to promote advertizing otherwise by persons which do not have the license for banking activity if "bank" or its derivatives follows from sense of use of the word that it is about banking activity.
Banks for the purpose of systematization of the activities, representation and protection of the interests, exchange of information and the joint solution of other tasks of banks can create the banking associations and associations which are not pursuing the profit earning aims and to enter them.
Banking associations and associations cannot perform banking activity. Banking associations and associations in ten-day time from the moment of their registration by competent state body notify on it the Central bank.
1. In the aspect of this Law and other laws regulating banking activity and also the legislation regulating activities of financial groups legal entities are considered affiliated if:
a) this legal entity with the right of vote owns 20 and more percent of voting shares (share, shares; further - the share) other person or has opportunity to predetermine solutions of other face owing to the participation or according to the agreement signed between these persons;
b) the participant (shareholder) and (or) participants (shareholders) or members of their families who are owning more than 20 percent of voting shares of one of them, or having opportunity in other not prohibited by the law to form to predetermine its decisions have the right directly or indirectly to own (including on the basis of purchase and sale, trust management, agreements of joint activities, the guarantee or other transactions) more than 20 percent of voting shares of other person, or have opportunity in other not prohibited by the law to form to predetermine solutions of the last;
c) one third of governing body or other faces of one of them fulfilling such duties, and also members of their family are at the same time members of governing body or other face of any other person fulfilling such duties.
d) they acted in coordination, proceeding from common economic interests or if they are recognized as those in motivated opinion of the Central bank.
2. In the aspect of this Law and other laws regulating banking activity and also the legislation regulating activities of financial groups physical persons are considered affiliated if they are recognized as those in motivated opinion of the Central bank or if they are members of one family, or conduct general economy, or perform joint business activity, or acted in coordination proceeding from common economic interests.
3. In sense of this Law and other laws regulating banking activity and also the legislation regulating activities of financial groups physical persons and legal entities are considered affiliated if they acted in coordination, proceeding from common economic interests or if they are recognized as those in motivated opinion of the Central bank or if this physical person or the member of his family is:
a) the participant owning in more than 20 percent of shares of this legal entity;
b) person having opportunity to predetermine decisions of the legal entity by other method which is not forbidden by the law;
c) chairman of the board, vice-chairman of council, member of council, chief executive, his deputy, chairman of the board, board member, chief accountant, his deputy, head, member of division of internal audit or chairman of control commission, member of control commission or member of other similar bodies of this legal entity;
d) such employee of the legal entity or his territorial subdivision or the employee of that structural division (including department, management, department) who according to the charter or other internal legal acts of the legal entity proved by the criteria established by Council of the Central bank or according to Council of the Central bank is somehow connected with the main activities of the legal entity or works under direct management of the chief executive or has any significant effect in question of decision making by governing bodies of the legal entity.
4. In sense of this Law and other laws regulating banking activity and also the legislation regulating activities of financial groups as members of one family are considered the spouse, and also the following persons living jointly or conducting one same economy: parents, the grandmother, the grandfather, the grandson who reached 18-year age, the child who reached 18-year age and his spouse, the sister, the brother who reached 18-year age, both their spouses and their children who reached 18-year age, the spouse's parents, the spouse's child who reached 18-year age.
Persons are considered conducting the same economy if deterioration in financial position of one of them brings or can lead to deterioration in financial position of another, either the income or other financial resources of one of them are used or can be used for the purpose of financing of joint expenses or expenses of another.
Central Bank can establish criteria of maintaining the same economy.
1. In sense of this Law and other laws regulating banking activity and also the legislation regulating activities of financial groups, considerable participation in authorized fund of the legal entity can be direct or indirect.
2. In sense of this Law and other laws regulating banking activity and also the legislation regulating activities of financial groups, such participation in authorized fund of the legal entity with which the participant has 10 and more percent of voting shares of this legal entity is considered direct considerable participation.
3. In sense of this Law and other laws regulating banking activity and also the legislation regulating activities of financial groups, is considered indirect considerable participation such participation in authorized fund of the legal entity with which:
a) the participant has no participation (the share, share or share) in authorized fund of the legal entity or has up to 10 percent of voting shares of this legal entity or participation without voting power, however this participation motivated by the criteria established by Council of the Central bank, has opportunity the goodwill and the authority directly or indirectly to predetermine decisions of governing bodies of this legal entity, to influence essentially adoption (application) of their decisions or to predetermine the directions, fields of activity of this legal entity;
b) the participant has no participation (the share, share or share) in authorized fund of the legal entity or the participant has up to 10 percent of voting shares of this legal entity or participation without voting power, however owing to available for it rights to claim concerning this legal entity has opportunity to predetermine decisions of governing bodies of this legal entity, to influence essentially adoption (application) of their decisions or to predetermine the directions, fields of activity of this legal entity;
c) the participant has in the authorized capital of the legal entity having considerable participation in authorized fund of the legal entity, participation in the amount of 50 and more percent of voting shares;
d) the participant has or has no participation in authorized fund of the legal entity having considerable participation in authorized fund of the legal entity and on the established Council of the Central bank criteria has opportunity the goodwill and the authority to predetermine decisions of governing bodies of this legal entity, to influence essentially adoption (application) of their decisions or to predetermine the directions, fields of activity of this legal entity.
4. The bank or branch of foreign bank shall represent to the Central bank of the information about persons who are real beneficiaries of bank or branch of foreign bank by the criteria established by the Law of the Republic of Armenia "About anti-money laundering and terrorism financing" according to the requirements established by the regulatory legal acts established by council of the Central bank.
Voided
1. It is forbidden to influence somehow heads of bank in course of execution of job responsibilities by them or to interfere with activities of bank, except as specified, provided by the law.
To heads of bank in the procedure established by the law the right of carrying weapon can be granted.
2. The damage caused to bank owing to illegal impact on the head of bank or illegal intervention in the current activities of bank is subject to compensation according to the procedure, established by the laws and other legal acts.
3. The government and banks do not answer for obligations each other if banks or the Government of those did not accept. Central Bank and banks do not bear responsibility according to obligations of each other.
4. Banks independently perform ownership, use and the order of the fixed assets.
1. Banks in the procedure established by this Law are established as joint-stock company, limited liability company and cooperative bank.
2. The laws and other legal acts on joint-stock companies and limited liability companies extend to banks if this Law does not establish other rules.
3. Such bank which members, irrespective of the amount of the participation in authorized capital of bank, have the right of one voice is considered cooperative.
The cooperative bank has at least three participants.
If the number of members of cooperative bank becomes less than three, such bank is subject to liquidation or shall add number of the participants within six months.
1. Founders of bank, shareholders of the bank which is joint-stock company, members (unitholders, members) of the bank which is limited liability company and cooperative bank are considered as members of bank.
2. State bodies of the Republic of Armenia and local government bodies can be members of bank in the cases and procedure established by the laws.
3. Batches and labor unions cannot be members of bank.
4. The banks operating in the territory of the Republic of Armenia are forbidden to keep the register of the participants personally. The banks operating in the territory of the Republic of Armenia, being joint-stock companies shall transfer maintaining the register of the participants to the corresponding persons provided by the Law of the Republic of Armenia "About joint-stock companies". The banks operating in the territory of the Republic of Armenia, being cooperatives or limited liability companies shall transfer maintaining the register of the participants to the Central bank.
1. The banks operating in the territory of the Republic of Armenia can establish in the procedure established by this Law branches in the Republic of Armenia and beyond its limits.
2. The bank branch - the separate division of bank which does not have the status of the legal entity and being out of the bank location which is effective within the powers provided by bank and from his name performs banking activity and (or) financial transactions provided by this Law.
3. Foreign banks can establish in the procedure established by this Law in the territory of the Republic of Armenia branches and representations. The branch of foreign bank performs banking activity and financial transactions based on the license. Council of the Central bank can establish additional terms for acceptance of deposits by branch of foreign bank in the territory of the Republic of Armenia.
These conditions shall be identical to all branches of all foreign banks operating in the territory of the Republic of Armenia.
1. The banks operating in the territory of the Republic of Armenia can establish in the procedure established by this Law in the Republic of Armenia and beyond its limits representations.
2. Representative office of bank - separate division of bank. not having the status of the legal entity and being out of the place on circulations of bank which represents bank, studies the financial market, signs contracts from bank name, performs other similar functions. The representation has no right to perform banking activity and financial transactions provided by this Law.
Voided
1. The size of authorized fund (authorized capital) of bank is fixed by its charter. Actually paid authorized capital consists of deposits of members of bank. Actually paid authorized capital is equal:
a) to the amount enclosed according to shares of members of the bank which is limited liability company or cooperative bank;
b) to the amount received from realization of all types of the shares placed by the bank which is joint-stock company.
2. The authorized capital of banks is paid in money in currency of the Republic of Armenia.
1. Person or affiliates can acquire owing to one or several transactions considerable participation in authorized capital of bank only from prior consent of the Central bank. For receipt of prior consent to acquisition of considerable participation in authorized capital of bank person according to the petition of bank submits in the Central bank the application that by means of its participation any other person does not acquire the status of person having indirect considerable participation in the created bank, otherwise this person shall submit the documents which are also established by the Central bank concerning persons acquiring indirect considerable participation. Acquisition of the status of the indirect considerable participant in the established present by Article procedure requires prior consent of the Central bank.
Disclaimer! This text was translated by AI translator and is not a valid juridical document. No warranty. No claim. More info
Database include more 50000 documents. You can find needed documents using search system. For effective work you can mix any on documents parameters: country, documents type, date range, teams or tags.
More about search system
If you cannot find the required document, or you do not know where to begin, go to Help section.
In this section, we’ve tried to describe in detail the features and capabilities of the system, as well as the most effective techniques for working with the database.
You also may open the section Frequently asked questions. This section provides answers to questions set by users.