Armenian banks prohibited from participating in Western Union

YEREVAN, August 25. /ARKA/. On Monday, the board of the Central Bank of Armenia prohibited the banks operating in Armenia from participating in Western Union international payment system.

The press office of the Central Bank of Armenia told ARKA News Agency that the board had instructed banks to void their contracts with Western Union.

The Central Bank did that to curb banks’ risks, since Western Union sometimes violates terms of contracts signed with commercial banks operating in Armenia.

In particular, Western Union has stopped serving clients in some branches of the banks. These moves can strike at the banks’ activity and financial stability and create unpredictable situation in money transfer sector.

The Central Bank also thinks that things can affect also Armenia’s economic, financial and real sectors.

The CBA made s similar decision yet in February 2006. The then decision was prompted by discrepancies in WU regulations and the fear that they can create risks and jeopardize financial stability in Armenia.

The decision was expected to take force on March 15, 2006, but banks obtained the Central Bank’s permission on March 14 and Western Union started cooperating with Armenian banks under test conditions in 1995 and functioning officially in 1996.

Armenian commercial banks participate not only in SWIFT traditional system, but also in 17 other international systems - Western Union, Money Gram, Anelik, Unistream, Express Post, Interexpress, Contact, Leader, Migom, Private Money Transfer, STB Express, Faster, Blizko, Zhivie Dengi etc. Besides, non-banking organizations HayPost (ArmPost), TelCel, Depi Tun, Elver, Parvana, Tandem Payments and Mega Pantera take part in the systems. ($1 – AMD 301.14) M.V.-0--