IMF advises Tajik authorities to liquidate problem banks
9 months ago Web Desk 0
Tajikistan is experiencing serious consequences of the coronavirus pandemic, the statement says following the results of the virtual mission of the International Monetary Fund to the republic.
«The health impact of the pandemic has been subdued, but trade problems with key partners have impacted economic activity and remittances».
There has been a sharp drop in revenues, which has created problems for the implementation of the country’s revised budget for 2020.
The IMF representatives, among other things, recommend to provide effective financial support to the Deposit Insurance Fund, and to liquidate two insolvent banks. It also notes the need to solve the problem of a shortage of currency.
The Fund offers the liquidation of “Tajiksodirotbank” and “Agroinvestbank” almost after every IMF mission to the country in recent years.
At the end of 2016, the government provided financial support for the recapitalization of these banks with a total value of over 3.3 billion somoni.
At the end of last year, the National Bank of the country named the reasons that forced the country’s government to save the country’s once systemic banks from imminent bankruptcy.
«The liquidation of these banks would cause a “domino effect”, leading to dire consequences for the economy of the republic. This is, first of all, massive capital flight (depositors’ funds) and bankruptcy of other large financial institutions and companies, which would lead to a significant default of credit institutions», – NBT experts believe.
Source: Asia Plus