By Shakeh Avoyan
Over two hundred clients of a major Armenian bank beset by serious financial troubles stormed its Yerevan offices on Wednesday, protesting against its caretaker administration’s payout scheme.
The administration, installed by the Armenian Central Bank (HKB) last month, has drawn up a rescue plan aimed at saving Credit Yerevan from bankruptcy. It envisages that only holders of time deposits not exceeding $1000 will be able to get their money back.
Larger depositors will have to sign new one-year agreements with Credit Yerevan on less favorable terms. They will not be allowed to withdraw any cash before 2003.
The arrangement has infuriated the clients that gathered outside the bank headquarters to demand all of their money back. Police officers used force to prevent them bursting into the building. “The Central Bank has failed to take into account our interests,” said one client.
Frunze Saroyan, Credit Yerevan’s former chief executive who is a member of the current temporary administration, faced insults and accusations as he tried to soothe the angry crowd.
“The bank is now insolvent, but it is doing its best to redress the situation,” Saroyan later told RFE/RL. “The temporary administration has come up with a financial adjustment plan, and we need one year to implement it successfully.”
The bank’s HKB-appointed caretaker chairman, Hakob Malkhasian, also defended the plan, saying that it represents the only way of keeping Credit Yerevan afloat.
One of Armenia’s largest banks, Credit Yerevan has attracted an estimated $12 million in deposits from thousands of people in recent years. Its total assets stood at more than $31 million before the crisis. The bank’s fate was discussed on Monday by top shareholders and executives of Markos Group Armenia, its parent business structure. They said they believe that it is still possible to breathe a new life into Credit Yerevan.