The Mongolian Government's working group has requested that the Anti-Corruption Agency investigate the domestic lending practices of the state-owned Development Bank of Mongolia (DBM).
The working group alleges that the DBM provided favorable borrowing terms to companies with links to high-level politicians, resulting in significant losses for the bank.
The DBM's 2018 financial statement shows a loan loss of MNT 339 billion (~USD 128 million), with an additional MNT 53.6 billion (USD 20.3 million) in losses following the liquidation of Capital Bank this year.
Established in 2010, the DBM issued Mongolia's first sovereign debt Chinggis bond in 2012.
The investigation into the DBM's lending practices is a critical step towards addressing Mongolia's corruption problem, which has undermined public trust in the government and the financial system.
The DBM's lending practices have been under scrutiny for years, with concerns about the bank's ability to collect on its loans and fulfill its repayment obligations.
The government must ensure that the Anti-Corruption Agency's investigation into the DBM's lending practices is thorough and transparent, with any findings leading to meaningful reforms to the bank's governance and lending practices.
Such reforms are essential to rebuilding public trust in the financial system and promoting economic growth in Mongolia.
The Mongolian government's investigation into the DBM's lending practices is a positive development in the fight against corruption.
The investigation's findings must be used to institute meaningful reforms that promote transparency and accountability in the bank's governance and lending practices. This is necessary for rebuilding public trust in the financial system and promoting Mongolia's economic growth.