The Government of Mongolia has been securing savings at commercial banks because lack of classical insurance system on banking sector, with intention of protecting its banking sector from world economy crisis.
Once the crisis is over, it has to be reviewed by the parliament, with some amendments or modifications in the current law. If the interest rate of saving is exceeds the Central Bank’s rate, or if you acquired loan from that bank, the Government will not give guarantee on both cases.
In order to secure gradual transition to the classical banking insurance, it is considered to build sufficient enough saving fund resource.
The Standing Committee on Economy held meeting on the issue. At the moment, Mongolbank’s interest rate is 11%, the Mongolian inflation rate is 13.4%, but the average annual rate of saving accounts at banks is 11-12%. If the Government gives security as it is planned, it will insure ₮2.5 trillion of ₮3.1 trillion deposited in the current account. The remaining will be excluded from the insurance.