Based on banking legislation, trade banks that violate the norms periodically let the public know about the violations. But the Central Bank is not satisfied with just that. The supervising body has always wanted to promulgate some punishments for banks.
“If we start announcing the punishments, then the Central Bank will be controlled by society and trade banks, which in turn will lower the subjectivity of the Central Bank in applying the punishments. Thus, banks will have the opportunity to compare the punishments from one another based on the types of violations. I believe that trade banks are more interested in this than the Central Bank,” says head of the Central Bank of Armenia Tigran Sargsyan.
In response to the question as to what stage the Central Bank is currently in regarding this initiative, Sargsyan said that the bank is still listening to different opinions about that because “the Central Bank never makes decisions without listening to the opinions of the people concerned. For the time being, the sides interested in this are the trade banks, the Union of Banks and the government.”
As for the opinions, head of the Central Bank had stated before that some banks are not in favor of this. But how do they look at it now?
“The discussions will show just how enthusiastic they are,” said T. Sargsyan.
Some bankers are worried over the fact that the banks committing violations and lowering their reputations will lower the reputation of the entire banking system. The head of the Central Bank has this to say about the worries:
“As our American colleagues say, the system loses its reputation when banks stay open. When that happens, it means that there is serious competition, control and effective mechanisms for having a normal system,” says T. Sargsyan.