Annual Report 2019

40 CENTRAL BANK OF ARMENIA Improve the effectiveness of internal control and risk management systems in banks and the ability to respond quickly in emergencies. Provide for legislative arrangements preventing the entry of criminals in the financial institutions the activities of which are governed by the above-mentioned laws, in accordance with FATF recommendations. Provide for capital requirement to insurance companies, in accordance with international best practices. The law on "Non-Cash Transactions" drafted during the reporting period provides for limits in order to reduce the volume of cash transactions. The draft to the law is aimed to shortens the shadow economy, promote financial intermediation in the banking system. This, in turn, will add to the development of the entire financial system, including the expanding of infrastructure and services provided for payment services, thus ensuring fast, reliable and secure payment. through the use of non-cash instruments. In 2019 the Central Bank continued taking on its supervisory functions to maintain the stability of the financial system, measure the financial organizations' risk exposure, compliance with the legal framework, while making sure an effective framework to combat money laundering and terrorism financing is in place and interests of consumers in the financial market are duly protected. The Central Bank monitors the activities of financial institutions, carries out analyses on their financial position, identifies and evaluates risks, measures the compliance of their activity with the legal framework and exercises other aspects of oversight under the law. In 2019 supervisory inspections at financial institutions for risk disclosure, business conduct, reliability of published information and other aspects continued. During the year, the Central Bank conducted 162 inspections at commercial banks (6), credit organizations (1), insurance companies (8), investment firms (2) and other financial market participants: exchange offices, pawnshops, payment and settlement organizations (145). Infringements revealed through supervision were remedied and measures were taken to prevent the ones in the future. ANNUAL REPORT 2019

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