On June 5, 2024, Mongolia’s Financial Regulatory Commission passed Resolution No. 286, introducing new “Criteria for Appropriate Ratios of Savings and Credit Cooperative Operations.” This critical update requires savings and credit cooperatives to assess and mitigate risks by adhering to four essential groups of indicators:
- Asset Quality and Security Indicators
- Indicators of Efficient Financial Structure
- Indicators of Costs and Expenses
- Indicators of Ability to Quickly Execute Payments
Each group has specific methodologies designed to ensure precise evaluations. These indicators collectively measure the financial health and risk exposure of cooperatives, leading to an overall assessment that is vital for operational stability.
Quarterly Reporting Obligations
Savings and credit cooperatives must calculate these ratio indicators every quarter, submitting detailed reports to the Financial Regulatory Committee by the 10th of the month following each quarter. The reports include various appendices covering areas such as:
- Lending and Loan Allocation
- Deposit Interest Rate Surveys
- Large Borrower and Affiliated Entity Loan Reports
- Capital Contributions and Large Depositor Reports
- Financial Structure Efficiency
- Income and Expense Ratios
- Payment Execution Capabilities
The goal is to ensure transparency, maintain the financial stability of the cooperative, and protect member interests.
Protecting Financial Stability
By implementing these guidelines, the Financial Regulatory Commission is aiming to safeguard the integrity of savings and credit cooperatives in Mongolia. This initiative enhances the trust and security within the country’s financial system, ensuring that cooperatives operate effectively while minimizing risks.
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