Banks Forgive Loans of Approximately 2 Billion Drams for Those Killed in War and Their Relatives

Armenian banks have forgiven loans of approximately 2 billion drams for those killed in the Artsakh war and their relatives. This was stated by Central Bank President Martin Galstyan during a press conference in response to a question from Armenpress.

Galstyan first clarified the essence of the adopted legislative initiative, noting that banks are forgiving or granting leniency regarding loan repayments. In this case, the tax obligations arising for the bank are neutralized. "In other words, the bank will not pay taxes for the portion where the forgiveness was implemented. However, this does not mean that the bank is fully compensated for the amount forgiven," said Galstyan, adding that in the event of income tax arising, the bank will not pay income tax, but the entire burden of forgiveness remains with the bank.

Nevertheless, according to the Central Bank President's latest information, banks have either revised or forgiven a significant number of loans. "In particular, a very large number of loans have been forgiven for the fallen and their relatives. According to my latest data, this amount is about 2 billion drams," said Galstyan.

The Central Bank estimates that this trend will continue. "The system will forgive loans totaling approximately 3 billion drams for the families of our fallen and wounded compatriots without receiving any support or assistance," he noted.

On October 21, the National Assembly of the Republic of Armenia adopted a bill submitted by the government amending the Tax Code of the Republic of Armenia. This bill allows banks and credit organizations to forgive certain loan obligations of individuals who have been killed, missing, or disabled as a result of military operations without incurring tax consequences. Thus, banks and credit organizations that forgive loans for those killed, missing, or disabled in the war will be exempted from certain tax obligations. Related persons include spouses, cohabiting parents, and cohabiting children. This provides banks and credit organizations the opportunity to forgive loan obligations, but the law cannot mandate this.