Mortgage loan issuance suspended


Mongol Bank spokesman D.Ariunaa reported that mortgage loan issuance has been temporarily suspended due to a Mongol Bank investigation of mortgage loan financing procedures at commercial banks.

In August, Mongol Bank conducted inspections at commercial banks and several violations, such as banks keeping financing and not issuing mortgage loans and improper spending of financing for mortgage loans, were found.

D.Ariunaa said, “Mongol Bank and authorities of commercial banks are holding discussions about how to address the violations. After they’ve reached an agreement on integrated solutions, mortgage loan issuance will resume.”

She underlined that Mongol Bank is going to end the five percent annual interest rate mortgage loan program and said, “Due to difficult economic conditions, a budget deficit increase, and cuts to budget income, Mongol Bank has no other choice but not to supply money to the domestic market. Concerning the current economic situation, we raised the monetary policy interest rate by 4.5 points to 15 percent. Following this strict monetary policy, Mongol Bank believes it should not support money supply through the five percent interest rate mortgage loan program.”

Mongol Bank said that because the five percent annual interest rate mortgage loan program is regulated by the government, the program can be implemented in the future if the Cabinet resolves financing issues. “The final decision on the five percent interest rate loan will be made at the Cabinet level,” D.Ariunaa said.