MNT 340 billion was placed in Capital bank

Translator E.Oyun-Erdene

2019-04-10 08:30 GMT+8

Bank of Mongolia made announcement of Capital bank bankruptcy on April 8. Minister of finance Ch.Khurelbaatar was asked about State money at Capital bank.

  • MNT 104 billion of Pension Insurance Fund
  • MNT 134.9 billion of Health Insurance Fund

Also MNT 52 billion of Development Bank was placed at Capital bank, which former director of Development bank N.Munkhbat placed. MNT 47 billion of SMEDFund, MNT 4 billion of University of Health and MNT 2 billion of University of Education were placed too. Total MNT 340 billion of State money is at Capital bank. 

Minister of Finance gave explanation that Capital bank has been bankrupted since 2015 and was unable to give finance. And announcing bankruptcy and take action according to the law are considered as good solution, if not loss might increase. 

Ch.Khurelbaatar also stated “This decision is made during period of economy growth. Borrowers of the bank will repay their loans. Capital bank definitely has immovable properties. Official letters will be sent and to general administrators of the budget and obliged to issue invoice of reimbursement within 60 days according to provision 71.1 of Bank Law. However this bankruptcy won’t influence on Mongolian banking sector, the government is having debt pressure.” 

When the State will take MNT 340 billion back? 

Following orders shall be adhered for providing invoice requirement by income gained from selling the bank property:

  • Payment from the bank based on court decision to repay reimbursement related life and health injury;
  • Operational expense of Bank of Mongolia and beneficiary;
  • Requirement of Deposit Insurance Corporation transferred demanding authority of insured deposit holder, insured deposit reflected in deposit law except for deposits of member of Board, executive management and shareholders;
  • Deposit Insurance Fund assets;
  • Salary not exceeding 5 times of minimum wage except for authorized officers of the bank
  • Payment requirement from Bank of Mongolia;
  • Debt to the Government, taxes;
  • Other debts not confirmed by obligation performance;
  • Second payable.
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