Bank minimum reserve was set at high level in order to save banks from bankruptcy

Nov 5 • Economy, Finance, Government, News • 576 Views • 1 Comment on Bank minimum reserve was set at high level in order to save banks from bankruptcy

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Economists said that the world economy crisis would affect the Mongolian economy in minor extent. But this crisis knocks the door of our economy through the stock price fall at the Mongolian Stock Exchange. Mongol Bank informed that commercial banks’ saving hadn’t decreased. Banks’ minimum reserve is increased since 1998 and it reached 8 billion MNT in April 2006.
As for today, banks risk bearing capacity 14-15% (in the world market it is about 6%) and it was the main reason of increasing the minimum reserve up to 8 billion MNT. Moreover, it was the pre-cautious step to prevent this bankruptcy in banking sector. According to the Mongol Bank’s information, insecure loan size takes 3.1% in the loan package and bank’s profit was 49.5 billion MNT in this year.

Therefore, banks have sufficient capacity to get through so called an approaching crisis in Mongolia.

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One Response to Bank minimum reserve was set at high level in order to save banks from bankruptcy

  1. Roy Dongen says:

    Once again it should be stated that the major banks in Mongolia have grown up rapidly and are managed very capable. This in combination with the conservative approach by Mongol Bank on this issue keeps the Mongolian banks save from the current economic turmoil.
    As an independent consultant I can confirm that this stable banking sector is of utmost importance to attract foreign investment to Mongolia.

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