Terms | HSBC Armenia

General Terms and Conditions

Commercial lending activities of the Bank assume individual approach to each Customer and to each deal. In this section are presented general approaches that serve as guidance when extending commercial banking facilities, while the final terms and conditions of each deal/service (including amount, interest rate, repayment schedule and fees) are defined on a contractual basis, depending on the nature of the deal, the level of perceived risks involved, collateral availability, Customer's account conduct with the Bank and other considerations. The section presents general information that would provide some guidance on the terms and conditions of commercial banking facilities. For detailed information and clarifications, please contact the representatives of the commercial banking department of the Bank.

Lending amount, currency and provision order

There are no specific minimum thresholds for facilities, while the maximum amount of the overall exposure to a single Borrower should be aligned with the regulatory requirements.

The facilities are generally provided in Armenian Drams, United States Dollars and Euros. The facilities can also be provided in other currencies, in case it is justified by the nature of the deal.

The loan is provided non-cash through crediting the respective current account of the Customer with the Bank, while in case of overdraft, the facility can be provided by allowing respective negative balance on the current account of the Customer.

If commercial banking facilities are provided in foreign currency the amount of repayments can be affected by the fluctuations of FX rates.


The pricing of the CMB facilities is made based on risk and return considerations (providing adequate return for the Bank given the level of risks involved, which are assessed by respective specialists) and is in line with the current market conditions. Generally, the pricing depends on the purpose/amount/tenor of the facility, Customer's credit history, offered security, financial/operating/other risks involved, prevailing market rates, quality/reliability of the Customer financial accounts, as well as the overall Bank products usage of the Customer.

The facilities are generally extended at floating rate, defined as the Bank's base rate, plus a fixed margin.

Calculation and payment of interest

The interest is accrued on a daily basis on the outstanding balance of the principal amount of the facility in the currency of the loan, unless otherwise agreed between the Bank and the Customer. The calculation of interest is based on a 360-days year.

The interest is payable in Armenian Drams on a monthly basis, unless otherwise agreed between the Bank and the Customer.

For detailed information, please contact the Bank representatives.

Repayment schedule

The liability principal amount is generally repaid in equal monthly installments. However, more flexible repayment schedule and/or different frequency of installments can be determined based on the specifics of each business and seasonal character of the Borrower's cash flows.


The Bank requires adequate security cover for the provided commercial credit and trade facilities. Security is not the primary factor for the assessment of a proposal; however the availability of adequate collateral, securing the requested commercial credit and trade facilities, is necessary. We accept the following types of securities as primary security:

  • Monetary funds
  • First class Bank Guarantee
  • Real estate (located in RoA).

In addition to the primary security, the Bank may also accept additional security in form of vehicles, machinery, as well as floating charge over stock of goods. The commercial and trade facilities are also typically secured by personal guarantees of the company's owners.

The acceptable level of the security/facility ratio is determined taking into consideration the Customer's credit history, facility amount, security type, availability of audited financial accounts, risk and return considerations, and degree of liquidity of their security.

Generally, the security/facility ratio determined as the ratio between the appraised value of tangible security and the overall limit of the extended facilities, normally should not be less than 1.3, but may be higher at the discretion of the Bank.

The property pledged to the Bank must be valued by either of independent valuators acceptable for the Bank and insured at the Bank's request by the Insurance companies acceptable for the Bank.

The valuation cost may vary from AMD 10,000 to AMD 300,000. In certain cases the cost of the valuation may be higher than the indicated range, depending on the type of the property valued.

Insurance premium may vary from 0.1% to 3% depending on the type of security. The insurance tariffs offered by the insurance companies may be different from the presented range, depending on the specifics of the insured vehicle, the insurance coverage required and overall market development.

Insurance policy must be renewed every year throughout the duration of the loan. In case the Customer does not ensure the renewal of the collateral, the Bank will ensure it by itself at the account of the Borrower.

The deadlines for decision making of loan application and loan provision/drawdown

The maximum period for making decision on loan application is 30 working days after the Bank has received all the necessary documents and information related to the application.

In some cases, considering the specific nature of the deal, the decision may take longer to complete. The applicant will be notified about the respective decision within 3 working days after the decision has been made.

The loan amount is provided on the next working day after receiving the written request of the Customer, provided that all the loan documentation has been completed and the security has been completed in due manner, with respective notarizations and registrations in state authorities in place, where applicable.

  1. Failure to make timely repayments of interest and principal will lead to this information record in the Loan Register,
  2. In case the Customer breaches its obligation under the respective agreement with the Bank, the Bank has the right to indemnify itself through collateral provided by the Borrower,
  3. In case the securities pledged to the Bank are not sufficient for repaying the outstanding loan amounts of the Customer, the Bank reserves the right to indemnify itself through repossession of other properties of the Borrower in accordance with RA legislation,
  4. In case of Borrower's failure or inadequate conduct related to meeting the contractual obligation the Bank has the right to demand full balance repayment of the extended facilities or repossession of the pledged collateral irrespective of the Customer's fault and/or force majeure circumstances.

Have a question?

Call an HSBC financial professional
+374 60 655 000

Our phone lines are open 24/7

Note: In case of discrepancies between the Armenian and English versions of this page, the Armenian version shall prevail.

Last updated on: 22/09/2015 15:00