Cabinet approves 100 million USD ADB project to reform the banking system www.theubpost.mn
Cabinet has reached an agreement with Asian Development Bank (ADB) to launch a 100 million USD project to implement the systemic reform of the banking system.
The project is called Reviving the Banking Sector, Enhancing Financial Stability. The project is being financed with a 15-year loan from the ADB, with no payment required from the Mongolian government for the first three years.
There will be 12 measures undertaken as part of the project, including the establishment of an asset management company to address the increasing amount of non-performing loans in the sector. Laws will be amended in order to ensure financial stability in the sector, and regulation and governance of commercial banks will be strengthened.
The amount of non-performing loans in the Mongolian banking system has significantly increased. As of 2016, the amount of non-performing loans had reached 1.7 trillion MNT, or 14.2 percent of all loans. The volume of non-performing loans in 2016 was the highest it has been in the past six years.
Published Date:2017-04-26