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The prudential ratios to banking operation

The prudential ratios to banking operation specified in Article 17 of the Banking Law of Mongolia and "Regulation on setting and monitoring prudential ratios to banking operation" approved by Governor’s Decree 138 of 2019 are following, but not limited to:
№ Prudential ratios
1

Capital adequacy ratios

  • Tier 1 CAR => 9% of RWA
  • Total CAR => 12% of RWA
  • Leverage ratio => 5%
  • The capital conservation buffer shall comprise the following:
    • The general buffer shall be 2% of RWA (applicable to all banks)
    • The systemic buffer shall comprise the constant component of 1% and the variable component based on the table below (only for D-SIBs):
Indicators REF Buffer (percentage point)
Asset/Total asset of the system At the end of the previous year 0% if less than 15% 0.5% if over 15%
Number of interbank transaction/total number of interbank transaction During the previous year 0% if less than 10% 0.25% if over 10%
Max of individual-loan share or entity-loan share At the end of the previous year 0% if less than 10% 0.25% if over 10%
2

Liquidity ratio

  • Liquidity ratio >= 25%
3

Foreign currency exposure ratio

  • Single foreign currency exposure limit <= 15% of total capital
  • Aggregate foreign currencies’ exposure limit <= 30% of total capital
4

Concentration risk limits

  • Large exposure limit (the sum of all large loans exposure) <= 20% of total capital
  • Related parties’ exposure limit:
    • Single <= 5% of total capital
    • Total <= 20% of total capital
  • Total large debtor exposure limit <= 300% of total capital
  • Sum of fixed assets, assets held for sale limit <= 8% of total capital
  • 10 largest depositors limit (the sum of 10 largest depositor’s current account and deposits’ balances) <= 25% of total assets

Banks are obliged to disclose the fulfillment of the prudential ratios established by the Bank of Mongolia in accordance with the “Public disclosure requirements module" approved by Governor’s Decree 200 of 2015.

The prudential ratios of the banks are shown in the link below: