Notes to the Financial Statements
23. SHARE CAPITAL
From the Bank’s inception, and in accordance with Article 4 of the Establishing Agreement, the Bank
denominated its authorized share capital in the Special Drawing Right (SDR) as defined by the International
Monetary Fund (IMF). Resolution 131 of the BoG unanimously adopted the requisite amendments to
paragraph 1 of Article 4 and Articles 23 and 24 of the Establishing Agreement, to expressly include among
the exclusive powers of the BoG the change of the unit of account of the Bank, and the redenomination of
all capital stock of the Bank. These amendments to the Establishing Agreement became effective on 21
June 2013 (the ‘Effective Date’). In accordance with such Resolution 131 of the BoG as of the Effective
Date the unit of account of the Bank became the EUR and the authorized capital stock of the Bank was
redenominated into three billion four hundred and fifty million EUR (3,450,000,000), divided into three
million (3,000,000) shares having a par value of one thousand and one hundred and fifty EUR (1,150)
each, inclusive of all subscribed and unallocated shares. Accordingly, as of the Effective Date, all
outstanding share capital commitments of participating members in respect of their subscribed shares were
converted into EUR.
The authorized capital stock of the Bank may be increased at such time and under such terms as may
seem advisable.
The Bank’s capital stock is divided into paid-in shares (fully paid and payable in installments) and callable
shares. Payment for the paid-in shares subscribed to by members was made over a period of years in
accordance with Article 6 of the Establishing Agreement for the initial capital raising purpose of the Bank,
and as determined in advance by the Bank for capital increases (in the only capital increase of the Bank
so far, the structure of payments specified was similar to the one in Article 6). The same Article states that
payment of the amount subscribed to in respect of the callable shares is subject to call only as and when
required by the Bank to meet its obligations.
Under Article 37 of the Establishing Agreement any member may withdraw from the Bank by transmitting
a notice in writing to the Bank at its Headquarters. Withdrawal by a member shall become effective and its
membership shall cease on the date specified in its notice, but in no event less than six months after such
notice is received by the Bank. However, at any time before the withdrawal becomes finally effective, the
member may notify the Bank in writing of the cancellation of its notice of intention to withdraw. Under Article
39 of the Establishing Agreement after the date on which a member ceases membership, it shall remain
liable for its direct obligations to the Bank, and also remain responsible for its contingent liabilities to the
Bank, incurred as of that date. No member has ever withdrawn its membership, nor has any ever indicated
to the Bank it might do so. Were a member to withdraw from the Bank, at the time a member ceases
membership, the Bank shall arrange for the repurchase of such a member’s shares by the Bank as part of
the settlement of accounts with such a member, and be able to impose conditions and set dates pursuant
to the same Article 39 of the Establishing Agreement. Any amount due to the member for its shares shall
be withheld so long as the member, including its central bank or any of its agencies, has outstanding
obligations to the Bank, which may, at the option of the Bank, be applied to any such liability as it matures.
If losses are sustained by the Bank on any guarantees or loans which were outstanding on the date when
a member ceased membership and the amount of such losses exceeds the amount of the reserves
provided against losses on the date, the member concerned shall repay, upon demand, the amount by
which the repurchase price of its shares would have been reduced if the losses had been taken into account
when the repurchase price was determined.
Under Article 42 of the Establishing Agreement in the event of termination of the operations of the Bank,
the liability of members for the unpaid portion of the subscribed capital of the Bank shall continue until all
claims of creditors, including all contingent claims, have been discharged.
All participating members had fully subscribed to the initial authorized share capital in accordance with
Article 5 of the Establishing Agreement. Subsequently, at the Sixth Annual Meeting of the Board of
Governors held on 6 June 2004 three Member States, Armenia, Georgia and Moldova requested a 50%
reduction of their portion of subscribed capital, from 2% to 1% of the initial authorized capital and the BoG
approved their request. On 5 October 2008 the new shares pursuant to the capital increase of the Bank
were offered in the same structure as the initial authorized share capital, in the amount of EUR 1.15 billion,
and were fully subscribed by the Member States.