Article 1. Banks of the Republic of Armenia
Banks are independent economic subjects with authorities of a legal person, which have right to involve and distribute finances, and to realize other transactions determined by the legislation.
In their activities banks are independent from legislative and executive bodies and are controlled by this law, other legislative acts and regulations.
Governmental legislative and executive bodies that are not shareholders, are not allowed to participate in banks management, except the cases when the central bank of the Republic of Armenia assigns temporary administration or liquidation commission.
Banks are not responsible for liabilities of the government of the Republic of Armenia. The government of the Republic of Armenia is not responsible for liabilities of banks, except the cases when a bank or the government of the Republic of Armenia have taken such responsibilities.
The term "bank" and any expression composed of this term can be used in names of firms only by the organizations, that are registered by the central bank of the Republic of Armenia.

Article 2. The banking system of the Republic of Armenia.
The banking system of the Republic of Armenia includes the Central Bank of the Republic of Armenia, banks of the Republic of Armenia (joint-stock, cooperative, foreign and joint), branches of banks, representations, etc.

Article 3. Types of banks.
Banks are classified:

• by the belongings and the type of the initial capital: joint-stock, cooperative, foreign and joint banks.
• by the area of activities: specialized and multi-profile.
• banks having special orientations.

Article 4. Bank associations
For coordination of their activities, protection of their rights, information exchange, preparation of specialists, creation of banking policy banks can be united into associations.
Banks are prohibited to use their associations during their banking transactions in order to gain monopolistic position, to create limits for rates of return and intermediary fees, and for competition.

Article 5. Bank regulations
A bank acts according to its regulations which are confirmed by the general meeting of its shareholders (participants).
Bank regulations should include:

• the name and the location of the bank
• the list of transactions of the bank
• the size of the initial capital, the list of funds and the method of their formation
• a statement about the fact that the bank is a legal person
• the structure of bodies of bank management, the order of its creation and authorities
• the order of elimination of bank transactions.

Article 6. Bank transactions
A bank can fulfill the following transactions:

a. to involve and distribute financial investments
b. to involve and distribute loans
c. to make calculations by the order of customers and banks (corespondent)
d. to open and manage accounts of customers and banks (corespondent)
e. to finance capital investments by the order of investors and mangers
f. to issue, buy (for their own money), sell and make the inventory of credit cards and bonds (checks, accreditives, promissory notes, stocks, etc.).
g. instead of arbitrators and by their order to give guarantees, and to take responsibilities
h. to acquire right to demand money for the supply of goods and services, to take the risk connected with this activity and to fulfill their factoring.
i. to buy (for their own money) and to sell foreign currency
j. by the order of the customers to involve and distribute finances, to manage bonds (authorizing transactions)
k. to offer consulting services
l. for their own money to acquire and lease equipment and machines
m. to buy, sell and receive for keeping precious metals and stones, other valuable things.

Article 7. Bank founders, shareholders (participants)
Legal and physical persons both form the Republic of Armenia and from foreign countries, and also organizations which don't have the status of a legal person can participate in creation of the initial capital, exclusively consisting of their own money.
Deputy councils and their executive bodies, public, social and political organizations, charity and public funds cannot be founders, shareholders (participants) of a bank.
The size of a share of founders, shareholders (participants) should not exceed 35% of the initial capital of the bank.

Article 8. Documents, that should be presented to receive a license for banking transactions
Documents, that should be presented to receive a license for banking transactions are the following:

a. for an intermediate license
b. regulations and other foundation documents
c. economic basing of the necessity for the creation of the bank (the planning calculations of the accounting balances, profits and losses)
d. the conclusion of the auditing organization or the financial organization serving the founders
about the financial condition and the property, and declarations about incomes from physical persons.
e. information about the professional correspondence of the proposed bank top management (the manager and accountant)
f. a document confirming the payment of the minimal amount of the initial capital.

Article 9. The order of presentation of documents for getting a license for banking transactions
Banks fulfill their transactions based on the license given by the Central Bank of the Republic of Armenia confirming the right for banking transactions.
Documents for getting a license for banking transactions should be presented to the Central Bank of the Republic of Armenia by an open letter.
The Central Bank of the Republic of Armenia takes the petition of the founders in the case, if at the moment of presentation of the petition the minimum amount determined by the Central Bank of the Republic of Armenia (not less than 75% of the initial capital) is added to the initial capital of the bank.

Article 10. Additional documents, that should be presented to receive a license for banking transactions by foreign banks, joint banks, and branches of foreign banks
To receive a license for banking transactions by foreign banks, joint banks, and branches of foreign banks, besides the documents described in the Article 8 of this Law, it is necessary to produce the following documents:

a. from foreign legal persons:
• the decision of the top management of the foreign founder, shareholder (participant) about the fact that he/she participates in the creation of a bank or the branch of a foreign bank on the territory of the Republic of Armenia.
• a written announcement of the authorized body of the country, where the foreign founder, shareholder (participant) lives, about the fact that it does not mind the participation of the foreign founder, shareholder (participant) in the creation of a bank on the territory of the Republic of Armenia, or an announcement of the authorized body or a legal service about the fact, that according to the legislation of founder's, shareholder's (participant's) country no allowance is needed.
b.from foreign citizens:
• the confirmation of the solvency of the person by the major foreign bank
• the guarantees of at least to foreign legal persons whose solvency is recognized.

Article 11. Terms of consideration of petitions for licenses and the responsibility of the Central Bank.
Petitions for licenses are considered by the Central Bank of the Republic of Armenia within one month after receiving all documents provided by this law.
If the petition is not considered within this term then by the requirement of bank founders, for every day of delay the Central Bank of the Republic of Armenia pays fine equal to 0.01% of the initial capital.
The petition is said to be considered from the day the appropriate decision is sent to the founders of the bank.

Article 12. Reasons for refusal to give a license
The Central Bank of the Republic of Armenia can refuse to give a license in the case if the following reasons are present:

a.inaccordance of the bank regulations and other founding documents to the current legislation
b.inaccordance of the top management (the manager and accountant) of the bank, confirmed by the Central Bank of the Republic of Armenia.

Article 13. Registration of a bank
Besides distributing licenses for banking transactions the Central Bank of the Republic of Armenia registers a bank and allocates to it a registration number.
A bank receives a status of a legal person from the moment of registration.
Banks cannot be registered in regional, city deputy councils.

Article 14. Bank departments, branches, representations, and the order of their creation
Banks, registered in the Republic of Armenia can found departments, branches and representations in the Republic of Armenia and abroad, which don't have the status of a legal person, and which are registered in the Central Bank if they are founded in the Republic of Armenia, and according to the legislation of the foreign country if they are founded abroad.
Representations search the financial market, make contracts and realize other similar functions, and are not authorized to make bank transactions.
Bank departments, branches and representations can realize bank transactions from the moment of their registration.
To register bank departments, branches and representations the following documents are necessary:

• a petition of the founder bank
• a copy of regulations of the founder bank
• the list of allowed transactions (except representations).

Article 15. Declaration of licenses as being invalid
Licenses of banking activities can be declared as being invalid by the Central Bank of the Republic of Armenia in the following cases:

a.finding unreliable facts in the documents presented for getting a license
b.not conducting banking activity for more than one year after the registration of the bank
c.not supplementing the declared initial capital of the bank within a year
d.conducting activities prohibited by Article 6 of this law
e.facts of violation of the anti monopolistic legislation

Article 16. The obligation of banks to inform the Central Bank of the Republic of Armenia about changes in founding documents
Banks are obliged to inform within a month's period the Central Bank of the Republic of Armenia about changes in founding documents (including the size of the initial capital), attaching copies of the changed documents confirmed by notaries. If in the changed documents there are reasons described in Article 12 of this law, the license can be declared invalid according to part 2 of Article 15 of this law.

Article 17. Elimination of banking activities
Banking activities are eliminated by this law, by the Law "About the Central Bank of the Republic of Armenia", by banking regulations, and other cases defined by the Legislation of the Republic of Armenia.

Article 18. The order of complaining decisions of the Central Bank of the Republic of Armenia
Banks and their founders can complaint about the decisions of the Central Bank of the Republic of Armenia in the court or arbitrage.

Article 19. Observation of economic regulations by banks
In order to provide reliability and to protect rights of customers banks are obliged to observe economic regulations "About the Central Bank of the Republic of Armenia" defined by the Central Bank of the Republic of Armenia according to the Law of the republic of Armenia, and to create insurance and reserve funds.

Article 20. Banking (banking trade) secret
Banks guarantee secretness of deposits, accounts and transactions of their customers and banks (correspondent).
Publishing or otherwise informing about a banking secret causes responsibility determined by the legislation of the Republic of Armenia.
Bulletins about accounts and transactions of legal persons can be given to their superior bodies, court, arbitrage and investigating bodies in the case, if the documents of the legal persons are being investigated by these bodies, and also to the State Tax Agency for taxing matters.
Bulletins about accounts and deposits of citizens can be given to these citizens and to their legal representatives, and also to court and investigating bodies in the cases, when the financial means and other values (including stocks)of the citizens are arrested, fined or confiscated.
In the case of the death of a citizen information about his/her deposits and accounts can be given to the person (persons) mentioned in his/her will, to the State notary agencies for matters of inheritance, and to foreign consulting services.

Article 21. Arresting financial means and other values, their fining and confiscating
Financial means and other values in banks of the Republic of Armenia belonging to legal persons and to foreign and international organizations can be arrested only by decisions of courts or arbitrages, and can be fined only by executive documents given by courts or arbitrages, and also by the request of tax agencies, according to order, defined by the current legislation.
Financial means and other values in banks belonging to citizens can be arrested or fined only by decisions of courts or arbitrages.
Financial means and other values in banks belonging to citizens can be confiscated only by the decision of the court currently in force or by another order defined by the legislation of the Republic of Armenia.

Article 22. Depository, loan and other transactions between banks
Banks, by contracts, can deposit and distribute finances to each others in the forms of deposits and loans, and fulfill other transactions determined by their regulations.
In the case if a bank feels a shortage in financing customers or fulfilling other duties, the bank can turn to the Central bank of the Republic of Armenia to get loans. The order and the conditions of realization of these transactions are determined by the Central bank of the Republic of Armenia.

Article 23. Interest rates of loans of banks
Banks independently define the interest rates of loans and the size of mediatory fees.

Article 24. Contractual form of relationships of banks and customers
Relationships of banks and customers are contractual.
Customers independently choose banks for loan and cash services and can have one accounting deposit, and can be served in one ore more banks for all kinds of banking transactions.
In certain cases customers can have more than one accounting deposit by the agreement of the Central bank of the Republic of Armenia.

Article 25. Types of calculations
Banks fulfill calculations according to forms confirmed by the Central bank of the Republic of Armenia. If there is no form of calculations defined by the Central bank of the Republic of Armenia, banks have right to fulfill calculations in other forms common for the banking practice.

Article 26. Provision of timely repayment of loans
Banks can provide timely repayment of loans by pledge, guarantees and references, and also other forms of provision of duties common for the banking practice.
Banks can also give loans without any guarantees (blank loans).

Article 27. Bank depositors and the order of receiving deposits
In the Republic of Armenia savings of citizens can be deposited in special saving and other banks.
Banks independently define the conditions, basing on which they fulfill transactions of receiving deposits from the population.
Depositors can be citizens of the Republic of Armenia, foreign citizens and persons without citizenship.
Depositors are free to choose a bank, and can have account in one or more banks.
Depositors can dispose their deposits by their own will, receive profits in the form of interest rates or some other form proposed by the bank, and can realize operations with accounts.

Article 28. Making Inventories and Reports in Banks
The reporting period for banks is from January 1 to December 31.
Inventory making in banks is realized according to the order defined by the Central bank of the Republic of Armenia.
Within three months after the reporting period, banks make and publish semiannual and annual reports according to the order defined by the Central bank of the Republic of Armenia.
Semiannual and annual reports include the brief balance and calculations of profits and losses of the bank.
The annual report is confirmed by an audit organization.
The annual report is presented to all shareholders and interested persons.

Article 29. Control over banking transactions
Control over banks, registered on the territory of the Republic of Armenia is realized by the Central bank of the Republic of Armenia.
Banks are obliged to present statistic and other reports to the Central bank of the Republic of Armenia according to the order and terms defined by it.
Information received to realize control over a bank is looked upon as a secret.
The Central bank of the Republic of Armenia has right to revise the activities of banks and their foreign branches, without preliminary informing them about it.

Article 30. This law does not control the activities of banks on the territory of the Republic of Armenia which have been created by international contracts of the Republic of Armenia.

Articles 20 and 21 concern also the Central bank of the Republic of Armenia.

President of the Republic of Armenia

L. Ter-Petrosian

Yerevan
April 27, 1993