At meeting called on November 19, 2009 by the Mongol Bank’s Board of Directors and the Government, it was resolved to make the Zoos bank a State owned bank. Zoos bank had previously forwarded its request to the Mongol Bank for approval to merge with the Savings and Mongol Posts Bank. This was followed by the Mongol Bank sending an official to Zoos bank to be responsible for taking over zoos bank’s operating authorization and for managing its activities, as well as a Resolution being passed to take this bank under state control as the European bank for Reconstruction and Development, was not in favor of the proposal to merge with the other 2 banks and the Mongol Bank’s inspection of Zoos bank had highlighted numerous serious contraventions. “The Savings Bank has requested being granted 60-70 billion togs as temporary financial assistance in case the Zoos bank merger is approved. 50-70 billion togs is to be irrecoverably spent while taking the Zoos bank under the state ownership as there is a low probability of outstanding loans being repaid” said Mongol Bank Governor Purevdorj.L.
The Zoos bank had broken the law on Banks by granting a huge 60billion togs loan to a single borrower, the Mongol Gazar company and its subsidiaries.
The Mongol bank underline that its shareholders and the government have taken all required measures from the time Zoos bank’s operations had started failing. An official authorized to manage Zoos bank’s operations is to take over bank’s entire management authorization and safeguard its clients and savings account holders’ money.
