Risk taking capacity of banks to be improved

2018-03-21 12:15:05
Ulaanbaatar /MONTSAME/ During a consultation organized by the Bank of Mongolia (BoM) on March 20, attendees emphasized feasibility of decreasing loan interest rates in a way of stabilizing overall economy and improving banks’ risk taking capacity. Reducing loan interest rates is contributive to improving investment environment, boosting employment and increasing GDP rapidly, specialists claim.

In accordance with main guidelines for 2018 State Monetary Policy, the Government, BoM and the Financial Regulatory Commission have undertaken to formulating strategy on loan interest rate reduction which has been completed. Keeping inflation rate low for a long term will create fundamental conditions for cutting interest  rate. Furthermore, it is important to take actions on upgrading legal environment to resolve repayments of outstanding or bad loans, raise threshold for income tax bracket and reduce noticably expenses affecting interest rates through increasing low cost external resources.   

Moreover, BoM conducted a survey among commercial banks on loan interest rate which shows that banks need to draw low cost financial resources, cut profit planning and operational expenses and minimize credit risks in order to reduce their loan interest rates.