Ulaanbaatar /MONTSAME/. On July 29, Speaker G.Zandanshatar held a meeting with executives of commercial banks to discuss lowering loan interest rates, increasing the amount of loans being given out to support export and production, and reforms in the bank and financing sector.

Deputy Governor of the Bank of Mongolia G.Enkhtaivan, General Economist D.Gan-Ochir, President of the Mongolian Bankers Association B.Medree, First Deputy CEO at Trade Development Bank of Mongolia O.Banzragch, First Deputy CEO at Khan Bank R.Munkhtuya, President of Golomt Bank G.Ganbold, CEO at TransBank M.Otgonbayar participated in the meeting.

Speaker G.Zandanshatar said, “Due to the global pandemic, our economy is in a challenging situation. During my meetings with the public, the first topic they bring up has always been the matter of reducing the interest rates for loans. The average annual interest rate for the banks in our country is currently at 16 percent. In the current situation, it is impossible for new start-up businesses in the field of industry to have profits of more than 5 percent in their first 5 years of operation. Therefore, we are faced with the necessity to lower loan interest rates and support small and medium enterprises through loans and interest subsidy.

Furthermore, by creating a new legal environment in the financing sector and doing a sector reform, banks will be able to restore their reputation and regain trust. Several important matters such as monetary policy, budget amendment, and the government action plan are going to be discussed at the irregular session of the Parliament, which will be held soon.”

President of the Mongolian Bankers Association B.Medree said, “Lowering loan interest rates are also in our interest as it reduces risk and increases the amount and availability of loans. However, there are various factors preventing the significant decrease in interest rates. Thus, sufficient studies must be conducted on precisely pinpointing exactly where the problems lie as well as how they should be resolved. Based on this, it is apparent that bold appropriate actions must be taken. For instance, it is of utmost importance for the parliament to renew the corresponding laws and legal environment for bank and financing sector operations.”

The executives of commercial banks put forth several suggestions, such as a policy on supporting banks, to have the Development Bank of Mongolia partner with commercial banks, the Bank of Mongolia to implement a policy on stabilizing interest rates, establish a single type of ATM and POS machine for all banks, and reduction in the required amount of reserves.

Pledging that the parliament will approve a resolution on defining the strategy to reduce loan interest rates during the forthcoming irregular session, the Speaker requested the representatives to officially submit their suggestions in order to include them in the parliamentary resolution.

Published Date:2020-07-30