Analysis of the current situation in Tajikistan’s banking sector and reasons that have led to a large-scale banking crisis in the country has shown that one the causes of the distressful situation in the banking sector is interference of the authorities in banks’ activities.
One of Tajik bankers, who wanted to remain unnamed, says that “banks have been giving targeted loans to one or another sector of economy for many years on instructions from the government, though they do have the right to do so.”
“Besides, banks have been forced to build hotels, workshops and even apartment buildings at their own expense – read “at the expense of depositors,” the Asia-Plus interlocutor noted.
“Meanwhile, the National Bank of Tajikistan (NBT) has blamed the distressed banks for not observing requirements of the country’s banking legislation blames, poor management of loan and liquidity risks, financial shortcomings and violation of prudential requirements (prudential regulation is type of financial regulation that requires financial firms to control risks and hold adequate capital as defined by capital requirements),” the banker said.
“The reasonable question arises: what was regulator doing when banking legislation was being violated, when banks were forced to provide targeted loans with extremely high risk? All this has led to those financial shortcomings and violation of prudential requirements,” the banker added.
