YEREVAN. – The competition in Armenia’s banking system today reaches frightening levels, chairman of Central Bank Arthur Javadyan said.

During the Thursday session in parliament, CBA chairman presented a report on the implementation of the CBA monetary policy program for 2012.

The MP Khosrov Harutyunyan pointed at high interest rates for loans, adding that banks have turned to pawn shops and are preventing the development of small businesses.

In response, Javadyan noted that that even international organizations provide loans for rather high rates.  

“Our policy is aimed at ensuring competition, and reducing the spread is the result of this competition,” he added. “It’s absurd, but in terms of competition we are ahead of even the United States.”

According to him, during the past five years, financial intermediation in Armenia increased by 3.5 times, and the volume of lending increased from 16% to 40% of GDP. The chairman of the Central Bank finds this concerning, since loan growth may affect the quality of loans.