Mongolia Introduces a Mandatory Deposit Insurance Scheme
05 March 2013
On 10 January 2013, the Parliament of Mongolia adopted the Law on Insurance for Bank Deposits ("Deposit Insurance Law") with effect on the same day.
The Deposit Insurance Law establishes a mandatory insurance scheme for the protection of bank deposits. The insurance programme replaces a blanket deposit guarantee issued by the Government of Mongolia under the Law of Mongolia on Issuing a Guarantee for Savings held at Banks dated 25 November 2008 ("Deposit Guarantee Law"). Such blanket guarantee had been issued for the purpose of banking stability and reassuring bank customers amidst the financial crisis in 2008. The Deposit Guarantee Law had been in effect for four years and expired on 25 November 2012. The blanket guarantee provided a generous insurance scheme at the state's cost and was intended to be replaced with a more market-based insurance scheme similar to that adopted in other jurisdictions.
Please click here to view the brief summary of the main contents of the Deposit Insurance Law.