Tajikistan’s central bank last late week announced it was pulling the licenses of two of its troubled banks and is now trying to work out how to compensate account-holders.
That decision, publicized on February 24, comes only weeks after the National Bank of Tajikistan (NBT) committed to spending tens of millions of dollars on refinancing the lenders in question — Tajprombank and Fononbank.
NBT representatives said that customers of the banks should not be concerned as they will get at least some of their savings back.
The law provides insurance of up to 17,500 somoni ($2,000) per depositor and that is, in theory, to be paid within two weeks of the announcement of the license withdrawal.
Once the courts appoint administrators at these banks, the savings of those customers holding more than 17,500 somoni will also be reimbursed, NBT representatives said.
Money will reportedly be paid as administrators go through the process of selling off the banks’ assets.
Assets on Tajprombank’s books include dozens of offices and an unspecified number of residential properties.
Fonobank hold 37 items, including a main office, four branch offices and multiple residential properties.
The size of the banks’ client base is not readily available, so it is unclear how onerous a commitment all this will prove or whether the authorities are really in a position to make such guarantees given the lack of liquidity in Tajikistan’s financial system.
Neither bank has commented publicly on the developments.
According to EurasiaNet.org, Tajprombank and Fononbank have been experiencing liquidity issues since 2015.
In December, the National Bank announced it was refinancing Tajprombank to the tune of 450 million somoni (US$56 million), while Fononbank got 80 million somoni (US$10 million). Larger banks like Tojik Sodirot Bonk (TSB) and Agroinvestbonk, which have also been experiencing serious liquidity issues, were topped up by 2.25 billion somoni (US$284 million) and 1.7 billion somoni (US$215 million), respectively.
Earlier this month, the General Prosecutor’s Office announced it was running an audit into TSB, Agroinvestbonk and Tajprombank. It is not immediately apparent if the license decision was connected to this wave of audits.
Fononbank has had its own separate set of problems. The bank had already been audited by the authorities over suspicions that it was somehow collaborating with the banned Islamic Revival Party of Tajikistan (IRPT).
As the IRPT was being wound down in September 2015, Fononbank chairman Samikhon Qurbonov was fired and the lender was placed under administration, according to EurasiaNet.org.
