Toghuhi Tovmasyan on Banks and New Interest Rates

Chairperson of the Permanent Committee on Protection of Human Rights and Public Affairs of the National Assembly, Toghuhi Tovmasyan, shared her thoughts: "Under the government of N. Pashinyan, citizens are unable to withdraw their own money in the currency they desire from banks. Following numerous complaints from citizens, for several days now, I have been receiving continuous complaints from individuals who specifically mention that banks refuse to provide cash withdrawals in dollars for amounts transferred in dollars. Instead, they are informed that the bank can only provide cash in Armenian drams at this time.

As a result, in many cases, people are forced to cash their transferred amounts in drams at the exchange rate set by the bank, which means they cannot exercise their rights to withdraw their funds in the currency they have been transferred. For citizens already facing a difficult social situation, creating additional financial burdens is unacceptable. In the context of currency fluctuations, citizens are already facing various problems, highlighting the need for authorized bodies to intervene within the legal framework for the protection of their rights.

Some citizens mentioned that they are not informed in advance that funds transferred in dollars can only be cashed in Armenian drams, thus deprived of their right to make decisions in this regard. Citizens should be informed in advance and freely able to exercise their right to cash their funds in the appropriate currency. Another group of citizens highlighted issues related to the fees applied to money transfers. As stated by professionals, while banks make their own decisions in this regard, citizens also raise their voices in protest that, on one hand, the fees are quite high and, on the other, they apply to both the sender and the receiver under these circumstances.

In relation to this issue, I have sought clarification from the Central Bank of Armenia, which confirmed that due to geopolitical circumstances, there are indeed issues related to the cash shortage of dollars. Yes, there is a limitation on cash dollar acquisition. And in some instances, banks may not have cash dollars at that moment, hence the requirement/condition to exchange for other currencies, including Armenian drams.

I was also informed that there are already various complaints on this topic in the office of the Financial System Mediator of Armenia, and the mediator must take certain actions regarding the examination of these complaints. The Executive Director of the Union of Banks of Armenia, S. Sargsyan, also responded to my questions, stating that the issue and its objectivity are caused by the noticeable activity of capital movements (particularly from the Russian Federation) recently, which has led to an increased demand for cash US dollars, including speculative demand. In these circumstances, banks are sometimes forced to apply tactical solutions, considering that the sufficient availability of cash is a fundamental issue for ensuring the necessary liquidity in banks and prioritizing cash demand.

The fees applied to transfers are formed based on the charges set by payment systems. While understanding the objective components of the problem and S. Sargsyan's assurance that the issue of possible cash withdrawal limitations is situational, not widespread or permanent, and is caused by factors beyond the control of Armenian banks, it is important to note the following. Even in this situation, it should not be forgotten that the respect and protection of human rights and freedoms is a duty of public authority, and the state must take steps to protect them. Meanwhile, under Nikol Pashinyan's government, a situation has developed where citizens cannot freely exercise their rights to cash out their own funds in the currency they desire.

I hope that the competent authorities will follow up on these complaints and find a systemic solution rather than merely advising citizens to submit written applications to the banks, as I have learned from alerts. I will be persistent in addressing the resolution of this issue."