Central Bank Revokes License of Varks AEEM Credit Organization

The Central Bank of Armenia has declared the license of the credit organization "Varks AEEM" LLP invalid, following a resolution by its council dated March 24, 2020, due to violations of the minimum capital requirement.

The credit organization had been issuing loans based on funds from its founders and was not authorized to attract private individuals' funds, such as deposits.

During supervision conducted by the Central Bank of Armenia, it was found that the financial reports submitted by "Varks AEEM" in December 2019 and January 2020 contained unreliable data regarding total capital. In order to clarify the situation, additional detailed information was requested by the supervisory department of the Central Bank about the financial indicators presented in the reports.

After a comprehensive review and analysis of the provided information, it was determined that "Varks AEEM" had violated the minimum capital requirement, leading to infractions of sub-paragraphs "b" and "e" of Article 18 of the Law on Credit Organizations.

As a result, administrative procedures for the imposition of sanctions against "Varks AEEM" were initiated on February 25 of this year. Within this procedure, administrative hearings were organized by the Central Bank on March 18 and March 20, 2020, during which the representative of the credit organization provided clarifications that were deemed insufficient by the council of the Central Bank.

Following the revocation of the credit organization’s license, a liquidation commission will be established in accordance with the law to carry out the required functions.