Follow Us on Social Media!
Ulaanbaatar, Mongolia, November 25, 2015
—IFC, a member of the World Bank Group, FMO (the Netherlands Development Finance Company), the Central Bank of Mongolia, and the Mongolian Bankers Association today launched a Handbook on Related-Party Transactions (RPTs) for the financial sector in Mongolia.
The handbook’s primary objective is to guide Mongolian banks on proper management of related-party transactions, i.e. transactions between all persons and entities that, by virtue of their positions, authorities, ownership and relationships, have scope for the direct or indirect influence on the bank’s decision making regarding RPTs. The guidebook is a consolidated source of best practices to deal with RPTs, but also offers detailed guidance on how banks can effectively implement key elements of the Central Bank of Mongolia regulations and the Company Law of Mongolia.
The launch event, organized at the Central Bank of Mongolia’s premises, was attended by management and staff of all 14 Mongolian banks, the Development Bank of Mongolia, audit firms, and other banking and finance institutions. Regulators and international banking and corporate-governance experts discussed solutions for conflicts of interest arising from related-party lending and ways to benefit from international best practices.
“We announced the development of a handbook on RPTs during the Corporate Governance Forum in September 2014, said J. Unenbat, CEO of Mongolian Bankers Association. “We hope this handbook will become a useful tool for shareholders, senior bank management and bank staff such as internal auditors, compliance officers, board secretaries, and lawyers.”
“Related-party transactions, if not conducted at arm’s length, are a threat to the financial sector in many countries. We are undertaking similar initiatives in other Asian countries as well. However, we are impressed with how the Central Bank of Mongolia and private sector banks have embraced this initiative and are tackling the issue head on”, said Marnix Monsfort, Manager of Financial Institutions in Asia for FMO.
“Poorly-disclosed and abusive related-party transactions, especially in a concentrated market like Mongolia, can challenge credibility and integrity of the bank and the banking sector as a whole,” said Tuyen D. Nguyen, Resident Representative for IFC in Mongolia. “This handbook will help Mongolian banks standardize and manage RPT risks.”
“The Mongolian banking sector is committed to improve its corporate governance practice,” said Batshugar Enkhbayar, Deputy Governor of the Central Bank of Mongolia. “We appreciate the cooperation of our international partners in developing this useful guide.”
FMO has been active in Mongolia since 2007. To date, FMO has an outstanding portfolio of $237 million of which 60 percent is in the financial sector. In addition, FMO works closely with MBA and IFC on developing, implementing, and supporting sector-wide initiatives for the financial sector.
IFC has invested in Mongolia’s banking sector since the late 1990s and supported its efforts to improve corporate governance since 2009. Improvements in related-party disclosures have helped Mongolia rise in the global Doing Business rankings with respect to protection of minority investors. Recent initiatives include the corporate governance scorecards developed in 2013 for Mongolia’s 20 largest listed companies, benchmarking Mongolia’s current practices to global standards.
IFC’s Corporate Governance Program in East Asia and Pacific is funded by the State Secretariat for Economic Affairs of Switzerland.
IFC, a member of the World Bank Group, is the largest global development institution focused on the private sector in emerging markets. Working with more than 2,000 businesses worldwide, we use our capital, expertise, and influence, to create opportunity where it’s needed most. In FY15, our long-term investments in developing countries rose to nearly $18 billion, helping the private sector play an essential role in the global effort to end extreme poverty and boost shared prosperity.
For more information, visit
FMO (the Netherlands Development Finance Company) is the Dutch development bank. For 45 years, FMO has been investing in the private sector in developing countries. We believe in a world in 2050 where nine billion people can live well and within the boundaries of the planet. In pursuit of this vision, our mission is to empower entrepreneurs to build a better world. We specialize in sectors where we believe our contribution can have the highest long-term impact: financial institutions, energy and agribusiness. Alongside partners, we invest in the infrastructure, manufacturing and services sectors. With an investment portfolio of EUR 8 billion, FMO is one of the largest bilateral private sector development banks. For more information, visit
The Mongolian Bankers Association is a self-regulated professional association that was established in 2000. With over 20 members, the association integrates all 14 commercial banks, the Development Bank of Mongolia, 4 financial and non-financial banking institutions, and 2 foreign bank representative offices. The association’s vision is to lead the banking and financial sector in support of the sustainable development and equitable economic growth of Mongolia. For more information, visit
About the Bank of Mongolia
As the Central Bank, the Bank of Mongolia (BoM) ensures the stability of the national currency – Togrog. Within this main objective, the BoM promotes balanced and sustained development of the national economy, through maintaining the stability of money, financial markets, and the banking system. In order to implement its objectives, the BoM conducts activities such as issuing currencies in circulation, formulation and implementation of monetary policy, acting as the Government’s fiscal intermediary, supervision of banking activities, organization of inter-bank payments and settlements, and management of the official foreign exchange reserves. For more information, visit
Receive news and updates about IFC