The city is abuzz with rumors that Trade and Development Bank is about to go bankrupt. The bank’s administration has strongly denied any such possibility but following what happened at Zoos and Anod banks, customer confidence continues to be low. The bank’s Executive Director, B.Medree, answers questions.
What is happening? Is it true that you are crediting interest on accounts for more than MNT 50 million every six months instead of monthly? How many depositors are going to sue you?
All that happened is that one account holder extended his account by six months in November, 2008 but later complained that he had meant it to be extended for a year. Since we had his signature for a 6-month extension we paid him interest also for six months. We explained the matter to him. Interests are calculated by an internationally recognized accounting program and no individual account can be treated differently. He refused to listen to reason and threatened to write to the Prime Minister and the media and to make us go into liquidation. He then had articles published in newspapers that TDB had secretly met the Ministry for Finance and was about to go bankrupt. This is totally untrue. In any case, the Ministry for Finance does not control the banking sector. The Central Bank does this and the Central Bank has no problems with us.
Can just one man’s allegations create such turmoil? And why is this old issue coming out so strong now? Is it meant to create uncertainty in the banking sector?
I cannot say. We treated the man’s complaint in the established manner and found no basis in it.
The Director of Mongolbank’s Inspection Department, B.Lhagvasuren, was also asked about the issue.
What information do you have on an account holder’s complaint of irregularities in TDB?
There are 1.7 million people with accounts in banks. We receive many complaints and make enquiries into those with substance. The Mongolbank is satisfied that TDB is doing well and there is nothing to worry.
What is the latest with Anod Bank?
A Mongolbank team has been working at Anod Bank since November 30. It will soon recommend by the end of this month whether the bank will be allowed to go into liquidation or whether it can be revived with structural changes. The final decision will be taken soon after.