Улаанбаатар
Capital Bank dissolved by decision of Bank of Mongolia
Society
Ulaanbaatar /MONTSAME/ On April 8, the Bank of Mongolia (BoM) made a decision to dissolve the Capital Bank and ceased its operation as the bank failed to fulfill its duties to take required actions, pay out funds to its depositors, customers and other clients, who have right to demand, at their first request, immediately conduct inter-bank transactions, and meet requirements for reserve, liquidity and capital adequacy, thus, became unable to perform normal operations. As of February 28, 2019, the bank had 28 branches, 165257 transaction account holders, and 56164 depositors and was accounting for 1.1 percent of total banking system assets.
Under the Deposit Insurance Law of Mongolia, deposits in both foreign and local currency are insured up to MNT 20 million. Therefore, 99.5 percent of the account holders will not face loss. Commercial banks are obliged to buy deposit insurance which is designated to safeguard the interests of depositors and pay quarterly premium. The balance of the Deposit Insurance Fund as of February 28, 2019 is approximately MNT 421 billion.
Claims for the uninsured funds of those who own more than MNT 20 million in the bank will be settled by the receiver of the bank pursuant to the order of priority for settling claims reflected in the Banking Law and the claim settlement period depends on sales of the bank's assets and loan repayments. Uninsured account holders shall make their claims to the bank's receiver. For instance, a customer who deposited MNT 40 million will receive MNT 20 million through Khan Bank’s account and should claim the remaining MNT 20 million from the receiver.
