Financial Crime World

MINISTRY OF FINANCE RECEIVES PROPOSALS FOR BANKING REFORM

Ulaanbaatar, [Date] - The Ministry of Finance has received a comprehensive set of proposals aimed at strengthening the banking sector in Mongolia.

Proposals to Enhance Governance and Regulation

The Bank of Mongolia has submitted a set of proposals intended to enhance the governance and regulation of banks operating in the country. Key changes proposed include:

  • Strengthening the Role of the Board of Directors: Giving the board more powers to manage daily operations and make decisions on strategic issues.
  • Improving Transparency and Accountability: Requiring Executive Directors to disclose conflicts of interest and ensuring they have necessary skills and experience.
  • Enhancing Internal Audit Function: Requiring banks to establish an internal audit department with more autonomy.
  • Increasing Minimum Paid-in Capital Requirement: Raising the requirement from 1 billion tugrugs to 2.0 million MNT.
  • Improving Regulation of Foreign Investments: Enhancing oversight and control over foreign investments in the banking sector.

New Requirements for Bank Charters

The proposals also introduce new requirements for bank charters, including:

  • Protection of Reputation: Provisions to protect a bank’s reputation and prevent reputational damage.
  • Security and Social Insurance of Staff: Ensuring the security and social insurance of bank staff.

Next Steps

The Ministry of Finance will carefully review the proposals before submitting them to Parliament. The reforms are expected to improve the stability and competitiveness of the banking sector in Mongolia.

Key Proposals

  • Strengthen the role of the Board of Directors by giving it more powers to manage the bank’s daily operations and making decisions on strategic issues.
  • Improve the transparency and accountability of the Executive Director by requiring them to disclose any conflicts of interest and ensuring that they have the necessary skills and experience.
  • Enhance the internal audit function by requiring banks to establish an internal audit department and providing it with more autonomy.
  • Increase the minimum paid-in capital requirement for banks from 1 billion tugrugs to 2.0 million MNT.
  • Improve the regulation of foreign investments in the banking sector.
  • Introduce new requirements for bank charters, including provisions on the protection of the bank’s reputation and the security and social insurance of its staff.

Expected Outcomes

The proposed reforms are expected to improve the stability and competitiveness of the banking sector in Mongolia.