According to the amendments to the Banking Law, no person or related parties may hold more than 20% of the shares of a bank, and banks must meet this requirement by the end of this year. But it may change.

Statement: Lkhagvasuren.B, Governor at Bank of Mongolia

The IPOs of the top 5 commercial banks have raised a total of ₮720 billions, which is "probably saturated" the liquidity of the domestic market. So we need foreign investment. However, according to the law, an investor cannot be a shareholder of more than one bank, and provisions such as the 20% limit are unfavorable conditions for foreign investors. For instance, the company law stipulates that foreign investors should have at least a normal majority and 34% of the company, which is causing us to re-examine the provisions of the law. Click here for his interview with us at MEF.

Although bank IPOs have advanced capital market development, legal restrictions limit further expansion and new opportunities. Therefore, the Bank of Mongolia is preparing a proposal to amend the Banking Law to be discussed at the autumn session. This is a crucial legal discussion that will take place starting in autumn, so pay attention.