Law on Banking Activities in Mongolia: Key Points

Establishment of Banks

Only specific entities are allowed to establish a bank in Mongolia. These include:

Legal Entities: Except for state-owned or government-related entities, legal persons can establish a bank.
Individuals: Certain individuals who meet the specified criteria can also establish a bank.

To be eligible, founders must demonstrate that they are:

Licensed and Registered: Founders must hold necessary licenses and registrations to operate in Mongolia.
Financially Sound: They must have sufficient financial resources to support the establishment of a bank.

The Bank of Mongolia requires approval for establishing a bank both domestically and abroad.

Bank Charter

A bank charter is a crucial document that outlines key aspects of the bank’s operation. It must include:

Paid-in Capital: The amount of capital invested by shareholders.
Management Structure: Details about the bank’s management, including positions and responsibilities.
Terms of Reference for Shareholder Meetings: Rules governing shareholder meetings and decision-making processes.

Any amendments to the charter must be registered with the Bank of Mongolia within 14 days.

Licensing Requirements

To obtain a banking license in Mongolia, applicants must provide comprehensive documentation. This includes:

Financial Statements: Detailed financial records demonstrating the applicant’s financial stability.
Feasibility Studies: Analysis of the bank’s proposed business model and operations.
Information about Management Positions: Details about key management positions, including qualifications and experience.

The Bank of Mongolia verifies whether the applicant meets specific requirements. These include:

Sufficient Capital: The applicant must have sufficient capital to operate a bank.
Competent Management: Key management positions must be held by competent individuals.
No Adverse Impact on Economic Security: The bank’s operations should not pose a risk to Mongolia’s economic security.

Refusal to Grant License

The Bank of Mongolia may refuse a license if the applicant fails to meet the specified requirements or provides false information. This is an essential safeguard to ensure the stability and soundness of the financial system in Mongolia.