DUSHANBE (TCA) — The National Bank of Tajikistan says it will auction the properties of two troubled banks — Tajprombank and Fononbank, Avesta news agency reported on June 29.
Last year, four banks in Tajikistan — Tajiksodirotbank, Agroinvestbank, Tajprombank, and Fononbank — encountered financial problems.
In May 2016, the National Bank appointed its temporary administrators at Tajprombank and Fononbank, that acted until the middle of December. After that, the two banks were returned under their previous management.
In December 2016, Tajikistan’s parliament approved the Government’s plan to issue state-guaranteed securities (promissory notes) for capitalization of the four troubled banks.
Tajik Finance Minister Abdusalom Kurboniyon then said that the notes will be issued against the properties of the banks to be used as collateral. The banks will have to repay the notes in five years at an interest rate of two percent per annum.
Minister Kurboniyon also emphasized that it was practically impossible to save the troubled banks without the interference of the State.
“This decision is aimed at ensuring sustainable development of the banking system, preserving the population’s trust in the banks, and returning deposits,” the finance minister said, adding that the notes will be issued for a total amount of 3.850 billion somoni, including 2.250 billion somoni for Tajiksodirotbank, 1.070 billion somoni for Agroinvestbank, 450 million somoni for Tajprombank, and 80 million somoni for Fononbank.
Following that measure by the state, two banks — Tajiksodirotbank and Agroinvestbank — began to pay on deposits, and the customers of Tajprombank and Fononbank could not get their money back.
In February 2017, the National Bank recalled the licenses of Tajprombank and Fononbank.