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Transactions with Other Persons and Conflict of Interest Must Comply with Relevant Laws
In accordance with Article 17 of the Mongolian Banking Law, transactions between banks and other persons must be conducted in compliance with relevant laws and regulations. This includes provisions regarding invalid transactions, capital adequacy ratios, and the requirements for establishing a bank.
Establishing a Bank: New Requirements
The Mongolian government has introduced new regulations to govern the establishment of banks in the country. Under Article 18 of the law, any legal entity or individual can establish a bank, except for state-owned entities and non-governmental organizations.
To obtain a banking license, applicants must meet certain requirements, including:
- Having sufficient capital
- Knowingledgable management
- Compliance with anti-money laundering and terrorism financing regulations
The Bank of Mongolia will review applications within 60 days and issue a written decision on whether to grant the license.
Additional Requirements for Foreign-Invested Banks
Article 22 of the law outlines additional requirements for foreign-invested banks seeking a banking license in Mongolia. These include:
- Providing documentation from the competent authority of the jurisdiction
- Meeting the requirements set out in Article 19 of the law
Granting a Banking License: Criteria
The Bank of Mongolia will grant a banking license to an applicant that meets certain criteria, including:
- Having sufficient capital
- Knowingledgable management
- Compliance with anti-money laundering and terrorism financing regulations
- Demonstrating that its establishment will not have an adverse impact on the country’s economic security
Refusal to Grant a License
The Bank of Mongolia may refuse to grant a banking license if the applicant fails to meet the requirements set out in Articles 18-22, 23.1, and 36 of the law. This includes cases where:
- The charter of the bank is inconsistent with legislation
- The applicant has provided false information
Conclusion
In conclusion, the Mongolian government has introduced new regulations to govern the establishment of banks in the country. Banks must comply with relevant laws and regulations, including anti-money laundering and terrorism financing requirements. The Bank of Mongolia will review applications for banking licenses and issue written decisions on whether to grant the license.