The International Monetary Fund calls on the Tajik authorities to take decisive action against the two major problem banks in the country – “Tajiksodirotbank” and “Agroinvestbank”.
The Fund’s statement on the results of the Fund’s recent mission to Tajikistan states that it is necessary to take effective measures to restore people's confidence in the country's banking system.
«Decisive measures are needed to restore depositor confidence in the banking system. The IMF welcomes recent measures to improve regulation and supervision, the classification of assets and the provision of resources, and the management of currency and credit risks by banks. However, more needs to be done to implement the recommendations of the Financial Sector Assessment Program 2016 (FSAP)», – noted in the statement.
In addition, representatives of the IMF are advised to take decisive actions regarding the country's two systemic banks – “Tadjiksodirotbank” and “Agroinvestbank”, which have been in a difficult financial situation for three years.
Earlier, following the mission in May of this year, the Fund’s experts stated that the lack of decisive measures to improve these banks continues to impede effective financial intermediation in the country.
Representatives of the IMF in their statements do not specify what specific measures they advise the authorities of the country to take in relation to “Tajiksodirotbank” and “Agroinvestbank”. However, sources close to the country's banking system say that the Fund proposes to revoke the licenses of these credit organizations and begin the process of their liquidation.
The NBT is encouraging
The head of the National Bank of Tajikistan, Jamshed Nurmahmadzoda, stated at the end of May at a meeting of the lower house of the country's parliament that the licenses of the “Tajiksodirotbank” and “Agroinvestbank” could be revoked if these banks could not attract additional investments in the near future.
«If these banks do not cope with the fulfillment of their obligations (attracting additional investments and returning the government financial support provided to these banks – note «АP»), specific measures will be taken against them, including license revocation », – said Nurmahmadzoda.
Later, in late July, Nurmahmadzoda announced that these banks are still able to return depositors' money.
«These banks have sufficient assets for this. In addition, they, together with law enforcement agencies are engaged in the return of problem loans», – said the head of the NBT.
He noted that the amount of obligations at the beginning of the second half of this year of “Agroinvestbank” to individuals is 803 million somoni, and “Tajiksodirotbank” – over 570 million somoni.
And there was no investment
“Tajiksodirotbank” and “Agroinvestbank” are experiencing financial problems since the beginning of 2016, and therefore cannot fully meet their obligations to customers.
Early last year, the government provided financial assistance to these banks.. “Tajiksodirotbank” received a total of 2 billion 250 million somoni, and “Agroinvestbank” – 1 billion 70 million somoni.
State support is granted for a five-year term at 2% per annum. This year, these banks should return 5% of these funds, in the future – 20%, and in subsequent years – 25% each.
Banks pledged to simultaneously improve their financial condition, in particular by attracting additional investments.
In the middle of May of this year it was announced about the acquisition by "Saudi Investment Group" of a controlling stake in "Tajiksodirotbank". However, this transaction has not yet taken place.
They also talked about similar negotiations between the management of “Agroinvestbank” and foreign investors, which have not yet led to any specific agreements.
Assets of troubled banks
According to data released by the government, the list of “Agroinvestbank’s” assets includes more than 730 objects located in different regions of the country.
This is the main office of the bank, 60 buildings of its branches, 5 service centers. Also, this bank owns recreation areas in the Varzob gorge, various small production facilities, farms, warehouses, gas stations and car services, shopping centers.
The list also includes shops, pharmacies, cafes, consumer services centers, numerous apartments and residential buildings..
The list of assets of “Tajikodirotbank” consists of 52 objects. The main office and 43 buildings of branches of the bank in the republic. There are also Dushanbe Mall CJSC (Auchan hypermarket), eight blocks of a nine-story residential building in the Dangara district, spinning factories in the Dangara and Farkhor districts, cotton processing plants in the Khatlon region, and a car repair company.
