Mongolia Takes Aim at Identity Theft in Banking Sector
Ulaanbaatar, Mongolia - In a significant move to strengthen the banking sector and prevent identity theft, the Mongolian government has introduced major amendments to the Banking Law of Mongolia. The changes aim to decentralize commercial bank ownership, ensure adequate balance between ownership, management, and control, and promote financial stability.
Key Amendments
- Definition of Systemically Important Banks: A systemically important bank is defined as one that has assets exceeding 5% of the total banking sector’s assets over the past six months. The Bank of Mongolia (BoM) will determine which banks are systematically important based on factors such as asset size, debt ratio, transaction volume, and overall relevance to the financial system.
- Limitations on Individual Shareholders: Commercial banks must limit individual shareholders to a maximum ownership stake of 20%. Banks must meet this requirement by December 31, 2023, and are prohibited from creating security interests over their shares.
- Joint-Stock Company Requirements: All commercial banks must operate as joint-stock companies by June 30, 2022. Systematically important banks will be required to hold an initial public offering (IPO) in the securities market, while other banks will operate as closed joint-stock companies.
Impact on the Banking Sector
- Increased Retail and Corporate Customer Confidence: The expansion of creditor rankings is expected to lead to increased confidence among retail and corporate customers in banks.
- Further Development of the Securities Market: The changes are expected to promote further development of the securities market in Mongolia.
- Concerns Around Government Claims Ranking: Some experts have expressed concerns about the ranking of government claims above other creditors.
Implementation and Future Developments
The Bank of Mongolia (BoM) and the Financial Regulatory Committee (FRC) will work closely together to implement the changes and reforms. The amendments are expected to lead to significant improvements in the banking sector and promote financial stability in Mongolia. For more information on the amendments and the banking legal framework in Mongolia, contact [insert contact details].