Mongolian banks prepare for overhaul after IMF bailout

Oyundelger 2017-08-04 06:08

Economy

The International Monetary Fund said Mongolia's banks are preparing for a regulatory overhaul as the government introduces policies aimed at restoring economic growth following a $5.5 billion bailout.

Mongolian banks prepare for overhaul after IMF bailout. The International Monetary Fund said Mongolia's banks are preparing for a regulatory overhaul as the government introduces policies aimed at restoring economic growth following a $5.5 billion bailout the IMF granted in May. The IMF deal required Mongolia to make a "comprehensive effort to rehabilitate the banking system" and to strengthen the central bank's independence. Reforms are already at the drafting stage and are designed to improve supervision and regulation in the banking system said IMF in a statement issued on Wednesday. Mongolia will also conduct an "asset quality review" to evaluate credit risks at commercial banks, it said. The precise impact of the reforms will depend on how quickly banks will be forced to respond, and how the central bank enforces the asset quality review, said Tomas Bravenec, deputy chief executive officer at Mongolia's Golomt Bank, one of the country's biggest private banks. Furthermore, he noted that a banking sector with a health certificate would definitely help improve Mongolia's image as an investment destination. The IMF is providing Mongolia with three years of credit worth about $434.3 million. The bailout package also includes soft loans from Japan and South Korea and an extended currency swap agreement with the People's Bank of China.