(2022.08.10-ны өдрийн орчуулга)               Unofficial translation

LAW OF MONGOLIA

January 10, 2013                                Ulaanbaatar city

ON BANK DEPOSIT INSURANCE

CHAPTER ONE

GENERAL PROVISIONS

Article 1. Purpose of Law

1.1   This law determines the legal basis for establishment of a bank deposit insurance with the aim to protect depositors' interests and ensure financial stability, and regulates the relations with respect to activities of a deposit insurance fund.

Article 2. Legislations on Bank Deposit Insurance

2.1 The legislation on bank deposit insurance shall consist of the Constitution of Mongolia, the Civil Code, the law on Central Bank /Mongol bank/, the Banking law, the law on Deposits, Loans and Banking Transactions, this Law and other legislative acts enacted in compliance with them.

/This provision was amended by the law dated on 21 May 2021/

2.2 If an international treaty, to which Mongolia is a party, provides otherwise, the provisions of the international treaty shall prevail.

Article 3. Legal Terms and Definitions:

3.1 Specific words and expressions used in this Law have the following meanings:

3.1.1. "deposit insurance corporation" is a legal entity having a special function to conduct mandatory deposit insurance scheme as stipulated in this law.

3.1.2. "deposit insurance operation" as used in this law refer to all activities related to insuring cash deposits in the saving and current accounts of the bank with the deposit insurance corporation and compensating depositors on occurrence of an insured event and providing financial supports to the transferee bank when transferring assets and liabilities of a bank or establishing a special purpose bank;

/This clause was revised by the law dated 08 February 2018/

3.1.3. "bank" means a legal entity stipulated in article 3.1.1 of the Banking Law or a foreign owned bank or bank branch conducting activities in the territory of Mongolia that are licensed by the Bank of Mongolia;

3.1.4. "insurable deposit" /"Deposit"/ means a cash deposit in a savings account or a current account in banks;

/This clause was revised by the law dated 08 February 2018/

/This clause was amended by the law dated 21 May 2021/

3.1.5. "deposit insurance fund" means a fund consisting of sources as stipulated in article 10.2 and to be spent for purposes as stipulated in article 11.1;

3.1.6. "insured event" means an occurrence when the Bank of Mongolia has issued a decision on liquidation of a bank as stipulated in the Banking Law;

/This clause was revised by the law dated 08 February 2018/

3.1.7. "joint account" means a bank account shared by two or more individuals that have equal access to funds either jointly or individually.

3.1.8. "financial support" means the transfer of funds from the deposit insurance corporation in order to cover the difference in assets and liabilities to the transferee bank as part of the bank's restructuring actions, or to invest in the special purpose bank's own funds;

Article 4. Principles of Mandatory Deposit Insurance

4.1 The following principles shall be followed by the mandatory deposit insurance scheme /hereinafter referred to as the "Deposit insurance"/:

4.1.1. to maintain stability of the financial market and protect the rights of depositors;

4.1.2. to compensate each depositor of the bank as stipulated in article 8.1;

4.1.3 to involve any banks in the deposit insurance scheme that are licensed to undertake activities as stipulated in articles 6.1.1 and 6.1.3 of the Banking Law;

4.1.4. to maintain transparency and accountability.

Article 5. Deposit Insurance

5.1. A bank with a license to undertake activities as stipulated in articles 6.1.1 and 6.1.3 of the Banking Law shall insure deposits of its depositors and pay insurance premiums mandatorily.

5.2. The Bank of Mongolia shall notify the Corporation of any issuance of a license to undertake banking activities.

5.3. The Corporation shall issue a certificate to the bank proving its participation in the deposit insurance scheme as specified in article 5.1.

5.4. The participation of the bank in deposit insurance scheme shall be terminated in the following cases:

5.4.1. All depositors have been reimbursed completely;

/This clause was amended by the law dated 08 February 2018/

5.4.2. A license to establish a bank has become invalid;

/This clause was revised by the law dated 08 February 2018/

5.4.3. Financial support was provided to a transferee bank as stipulated in article 11.1.2;
/This clause was added by the law dated 08 February 2018/

Article 6. Insured Event

6.1. The date of a decision specified in 3.1.6 of this law shall be considered as the date of an insured event.
/This clause was revised by the law dated 08 February 2018/

6.2. The Bank of Mongolia is obliged to inform the Deposit Insurance Corporation immediately after it has made a decision on implementation of measures specified in 3.1.6 of this law.
/This clause was revised by the law dated 08 February 2018/

6.3. When an insured event occurs, depositors shall be provided the right to claim compensation for their insured deposits from the Deposit Insurance Corporation as specified in this law.

6.4. In case of financial supports as specified in this law, the depositor's compensation shall be considered as granted.
/This clause was added by the law dated 08 February 2018/

Article 7. Deposits not Eligible for Insurance 

7.1. The following deposits are excluded from the insurance program:

7.1.1. deposits that are opened anonymously, using serial numbers or which are opened under fake names as stipulated in article 4.1 of the Law on Combating Money Laundering and Terrorism Financing;

7.1.2. anonymous deposit certificates and other types of anonymous financial instruments;

7.1.3. deposits that will not be repaid at nominal value;

7.2. deposits of the following depositors will not be eligible for deposit insurance:

7.2.1. banks;

7.2.2. state organizations, local self-governing organizations or administrative organizations;

7.2.3. health, pension or social insurance funds;

7.2.4. related persons of the bank as stipulated in article 3.1.2 of Banking Law;

7.2.5. auditors or auditing organizations that audited financial statements of the bank within three years before insurance occurred;

7.2.6. The following depositors who were determined by the supervision report of the Bank of Mongolia that they enjoyed financial privileges in obtaining banking services and who contributed to the decrease in financial performance of the bank:

7.2.6.a. an entity who found to have been given a special loan condition which have not been provided to others upon examination of transaction types, risk levels, credit worthiness and collateral types;

7.2.6.b. an entity which has enjoyed a lower interest rate for a loan compared to other depositors;

7.2.6.c. a depositor who has been granted 50 percent more interest than the average rate as determined by the statistics report of the Bank of Mongolia;
/This sub-clause was amended by the law dated 29 January 2021/

7.3. When an insured event occurs, an insurance compensation will not be paid to the entity specified in article 7.2.

7.4. If an insured event occurs, depositors whose transactions have been frozen according to article 134.9 of the Criminal Procedure Law and whose transactions have been suspended according to article 11 of the Law on Combating Money Laundering and Terrorism Financing shall be reimbursed only if the decision on transaction freezing or suspension has been revoked.
/This clause was amended by the law dated 08 February 2018/

7.5 If the loans and deposits specified in 7.2.6 of this law are determined by the inspection and supervision of the Bank of Mongolia, enforcement measures will be taken and the Deposit Insurance Corporation will be notified thereof in accordance with the law.
/This clause was added by the law dated 29 January 2021/

Article 8. Insurance Coverage  

8.1. In case of an insured event, the Deposit Insurance Corporation shall compensate insured depositors with up to 20 million MNT in both local and foreign currency.

Article 9. Calculation of Insurance Compensation

9.1. When calculating the reimbursement amount, the total amount of deposits owned by each depositor in that bank and the amount of interest accrued under the contract will be summed up as of the date of occurrence of an insured event and determined by deducting the loans and its interest overdue for more than 90 days that should be paid by the depositor to the bank.
/This clause was amended by the law dated 08 February 2018/

9.2. If a depositor has several deposit accounts in the bank where the insured event occurs, the insurance compensation shall be estimated from the consolidated amount of all of his/her account balances at the rate specified in article 15.4 of this law.
/This clause was amended by the law dated 08 February 2018/

9.3. The total amount to be covered for joint account holders shall not exceed the coverage amount specified in article 8.1.

9.4. Joint deposit holders shall be reimbursed equally with the exception of cases where they have provided proof that their ownership percentages are not equal.

9.5. The insurance compensation entitlement of the deposits of a minor joint account holder shall not be restricted in relation to joint ownership of the deposit.

/This section was added by the law of February 8, 2018/

CHAPTER TWO

DEPOSIT INSURANCE FUND

Article 10. Deposit Insurance Fund and its Sources

10.1. The Deposit Insurance Corporation shall manage the deposit insurance fund (hereinafter referred to as the "Fund").

10.2. The Fund shall be accumulated from the following sources:

10.2.1. premiums or commissions paid by the banks to a special account of the Government at the Bank of Mongolia as stipulated in article 2.5 of the Deposit Guarantee Law.

10.2.2. initial capital provided by the state budget to the Fund;

10.2.3. initial capital provided by the Bank of Mongolia to the Fund;

10.2.4. deposit insurance premiums;

10.2.5. income from investments of the Fund;

10.2.6. income from the sale of assets of banks in which an insured event occurs;

10.2.7. loans, grant aid and other funds provided by the Government, the Bank of Mongolia and international organizations;

10.2.8. loans of the Deposit Insurance Corporation taken from foreign banks and international financial institutions;

10.2.9. bonds issued by the Deposit Insurance Corporation;

10.2.10. compensation funds remained in the bank specified in article 16.1 of this Law after the end of the compensation period;
/This section was added by the law of February 8, 2018/

10.2.11. Other sources stipulated in laws;
/The number of this clause was amended by the law of February 8, 2018/

Article 11. Use of Fund Assets

11.1. The assets of the Fund shall not be used except for the following purposes:

11.1.1. compensation for depositors;

11.1.2. providing financial assistance to banks receiving assets and liabilities from liquidated banks as part of the bank's restructuring measures;
/This clause was revised by the law of February 8, 2018/

11.1.3. the operational expenses of the Deposit Insurance Corporation;

11.1.4. payment of the principle and its interest on loans borrowed or bonds issued by the Deposit Insurance Corporation;

11.2. Financial support shall be provided in the event that the sum of financial support and related expenses specified in article 11.1.2 of this law is less than the sum of funds required for insurance compensation and the sum of related expenses.

/This clause was revised by the law of February 8, 2018/

 11.3. The National Deposit Insurance Committee stipulated in article 22.1 shall approve the regulation on provision of financial support specified in article 11.1.2 of this law.
 

Article 12. Investments of the Fund

12.1. The Deposit Insurance Corporation shall invest the Fund's assets in following financial instruments in compliance with the principles of safety, liquidity and profitability.

12.1.1. securities issued or guaranteed by the Government of Mongolia;

12.1.2. securities issued by the Bank of Mongolia;

12.1.3. securities issued by foreign governments or international financial institutions holding at least a  rating of A issued by an internationally recognized credit rating agency;
/This clause was revised by the law of February 8, 2018/

 12.1.4. deposits opened at the Central bank of member countries of organizations of economic cooperation and development;

12.2. The National Deposit Insurance Committee shall adopt the investment policy, regulations and guidelines of the Deposit Insurance Corporation.

CHAPTER THREE

DEPOSIT INSURANCE PREMIUMS AND COMPENSATION

Article 13. Deposit Insurance Premiums and its Payment

13.1. Banks shall pay deposit insurance premiums ("The premium") to the Deposit Insurance Corporation according to the deposit insurance regulation approved by the National Deposit Insurance Committee.

13.2. The premiums stipulated in article 13.1 of this law shall comprise the following fees:

13.2.1. an initial premium;

13.2.2. a quarterly premium;

13.2.3. a special premium;

13.3. The Initial premium shall be equal to one percent of the share capital of the bank.

13.4. The Initial premium shall be paid within 30 days after the banking license has been issued by the Bank of Mongolia.

13.5. The quarterly premium shall be calculated by multiplying the average amount of deposits on the last day of each month of the previous quarter, other than those specified in 7.1, 7.2.2 and 7.2.3 of this Law, by the percentage of the quarterly premium rate calculated as specified in 14.1 of this Law.
/This clause was amended by the law of February 8, 2018/

13.6. The quarterly premium payment term shall be indicated in an invoice submitted by the Deposit Insurance Corporation.

13.7. The National Deposit Insurance Committee shall determine the quarterly premium rate for the following year until 30 November of each year. The maximum rate for any bank will not exceed 0.125 percent of the deposited amount.

13.8. The National Deposit Insurance Committee may suspend the requirement to pay the quarterly premium if the total amount of the Fund reaches 10 per cent of the all deposits, except those specified in Article 7.1, held with member banks.

13.9. The special premium can be called for when the Fund's reserves are not sufficient to cover all compensation payments declared by the National Deposit Insurance Committee.  

13.10. The special premium shall be calculated from the deposits other than those specified in 7.1, 7.2.2 and 7.2.3 of this law and the percentage shall not exceed 0.5 % per year.
/This clause was amended by the law of February 8, 2018/

13.11. The special premium shall be calculated by multiplying the average amount of all deposits except those specified in 7.1, 7.2.2 and 7.2.3 of this law as by the last day of each month in the previous quarter by the special premium rate.
/This clause was amended by the law of February 8, 2018/

13.12. Upon request of a bank, the Deposit Insurance Corporation may extend the term specified in Article 13.6 by five working days.

13.13. If a bank fails to pay insurance premiums within the term as specified in Article 13.12, the Deposit Insurance Corporation shall notify the Bank of Mongolia thereof and shall request the Bank of Mongolia to transfer insurance premiums from the bank's current account at the Bank of Mongolia, and the Bank of Mongolia shall decide accordingly.

13.14. The obligation of paying premiums of the bank liquidated by the Bank of Mongolia shall end at the last day of the quarter in which the insured event occurs.

13.15. No refunding of premiums stipulated in article 13.1 shall be made.

Article 14. Quarterly Premium Rate

14.1. The Deposit Insurance Corporation shall determine the quarterly premium stipulated in 13.2.2 as per the methodology set out depending on risk level of the bank.   

14.2. The Deposit Insurance Corporation shall assess the risk level of banks based on information provided by the Bank of Mongolia.

14.3. The Deposit Insurance Corporation shall keep the confidentiality of the information stipulated in article 14.2.

14.4. The National Deposit Insurance Committee shall approve a methodology stipulated in article 14.1 based on proposals provided by the Bank of Mongolia and the central state administrative organization in charge of finance and budget issues. When calculating the bank's risk level, the bank's inspection assessment and the bank's deposit interest rate may be taken into account.
/This provision was revised by the law dated 08 February, 2018/

Article 15. Granting Insurance Compensation to Depositors

15.1. The National Deposit Insurance Committee shall make a decision on providing compensation to depositors within 3 working days after the Deposit Insurance Corporation has received a notification from the Bank of Mongolia on occurrence of an insured event.

15.2. The Deposit Insurance Corporation shall inform depositors by public media system within 48 hours after issuance of a decision specified in article 15.1 with regards to manners and timelines of insurance compensation, and a written copy of such information shall be delivered to the Bank of Mongolia.

15.3. The Deposit Insurance Corporation shall start to transfer payments through the bank specified in article 16.1 within 10 working days after the date an insured event occurs.
/This provision was revised by the law dated 08 February, 2018/

15.4. The compensation of foreign currency deposits shall be made by local currency/tugrik/ applying an exchange rate of the Bank of Mongolia as at the date of the insured event.

15.5. The procedure on granting insurance compensation shall be approved by the National Deposit Insurance Committee.

15.6. The Deposit Insurance Corporation is obliged to inform the depositors regarding the progress of the compensation payment process. 

15.7. The National Deposit Insurance Committee shall adopt the regulation on content of information stipulated in article 15.6 and its distribution manner.

Article 16. Bank Paying Insurance Compensation

16.1. Insurance compensation shall be done through a bank.

16.2. The bank stipulated in article 16.1 shall be selected by the National Deposit Insurance Committee upon agreement with the Bank of Mongolia in each case of an insured event.

16.3. The regulation on selection and requirements for a bank shall be adopted by the National Deposit Insurance Committee.

16.4. The Deposit Insurance Corporation shall enter into an agreement with the bank stipulated in article 16.1.

Article 17. Rights of Depositors

17.1. Depositors shall have the right to be reimbursed on occurrence of an insured event.

17.2. If an insurance policy is concluded for the account of a third party, the third party is entitled to insurance compensation.

17.3. In case of receiving insurance compensation through inheritance, the inheritor will receive insurance compensation for each deposit deposited in his/her name and each inherited deposit.
/This provision was revised by the law dated 08 February, 2018/

17.4. The prescriptive period for depositor's insurance entitlement shall be three years after the right to claim specified in article 6.3 have been arisen.
/This provision was added by the law dated 08 February, 2018/

17.5 In the event that the bank is reorganized by transferring the bank's assets and liabilities within the framework of bank mergers, acquisitions and restructuring measures, an amount of insurance compensation for each bank prior to the reorganization shall be determined, and it shall be valid for six months after such reorganization.
/This provision was added by the law dated 08 February, 2018/

17.6. The bank that has received or been formed from the merger shall notify the depositors of the expiry of the period for calculating the amount of insurance compensation for each bank 30 days before the end of the period specified in 17.5 of this law.
/This provision was added by the law dated 08 February, 2018/

Article 18. Right to Claim

18.1. The depositors' claims on compensation are assigned to the Deposit Insurance Corporation in the amount of compensation paid by the Corporation to depositors.

18.2. The Deposit Insurance Corporation shall claim insurance compensation provided pursuant to article 18.1 of this law from the liquidated bank in compliance with the Banking Law and the Law on Bankruptcy.

18.3. The claim of a depositor against the Deposit Insurance Corporation shall not apply to the  deposit and depositors stipulated in article 7 and the deposit that exceeds the reimbursement amount stipulated in article 8.

CHAPTER FOUR

DEPOSIT INSURANCE CORPORATION, ITS MANAGEMENT AND ORGANIZATIONAL STRUCTURE

Article 19. Legal status of Deposit Insurance Corporation

19.1 The Deposit Insurance Corporation (the "Corporation") shall be a nonprofit, state owned legal entity that acts to implement the deposit insurance scheme.

19.2. The head office of the Corporation shall be in the capital city of Mongolia.

19.3. The Corporation's charter shall be approved by the National Deposit Insurance Committee.
/This provision was revised by the law dated 08 February, 2018/

19.4. The Corporation shall use a seal, stamp and official letterhead made according to the design established by the Corporation.

19.5. The Corporation shall have current and deposit accounts for tugrik and foreign currency at the Bank of Mongolia.

19.6. The Corporation may open a current account at any commercial bank in order to manage its day-to-day operations.

19.7. The Corporation shall have an internal audit unit which reports to the National Deposit Insurance Committee.
This provision was amended by the law dated 08 February, 2018/

19.8. The Corporation shall implement measures specified in the Law on Public Information Transparency in order to ensure transparency of its activity.
/This provision was amended by the law dated 17 December, 2021/

Article 20. Activities of the Corporation

20.1. The Corporation shall perform the following main activities:

20.1.1. collecting insurance premiums;

20.1.2. compensating depositors on occurrence of an insured event;

20.1.3. managing the accumulated assets of the Fund as specified in the law;

20.1.4. assessing and monitoring the risk of the relevant banks in order to monitor the financial risk of the Fund;

20.2. The corporation shall not engage in any activity other than those stipulated in this law and shall not establish a for-profit entity.

Article 21. Rights of the Corporation

21.1. The Corporation shall have the following rights:

21.1.1. to obtain monthly and quarterly reports and other relevant information from banks regarding the deposits and depositors in order to fulfill its legal duties stipulated in this law;

21.1.2. to obtain audit opinions or reports, financial statements, financial indicators and other relevant information from the banks;

21.1.3. to request the Bank of Mongolia to conduct an inspection in a bank in relation to activities of deposit insurance or when deeming it is necessary to evaluate the probability of an insured event;

21.1.4. to submit a request to the Bank of Mongolia to allow a representative of the Corporation to join in the receivership process of the liquidated bank, and ensure its execution;

21.1.5. to be provided financial support or loans from the Bank of Mongolia and the Government if the funds of the corporation are insufficient to exercise its duties;
/This provision was revised by the law dated 08 February, 2018/

21.1.6. to adopt regulations referred to its capacity and rights and control on implementation of the regulations.
/This provision was added by the law dated 08 February, 2018/

21.1.7. to inspect the bank within its capacity stipulated in this law;
/This provision was added by the law dated 08 February, 2018/

21.1.8.  to ensure a regular inspection on completeness and preparedness of the software required for the exchange of information specified in this law;
/This provision was added by the law dated 08 February, 2018/

Article 22. National Deposit Insurance Committee

22.1. The supreme governing authority of the Corporation shall be the National Deposit Insurance Committee (the "National Committee").

22.2. The National Committee shall be composed of seven members as follows:

22.2.1. The First Deputy President of the Bank of Mongolia as member and Chairman of the National Committee;

22.2.2. The State Secretary of the central state administrative organization in charge of finance and budget issues;

22.2.3. Full-time member of the Financial Regulatory Commission appointed by the Economic Standing Committee of the State Great Khural;
/This clause was revised by the law dated 08 February, 2018/

22.2.4. three members nominated by the President of the Bank of Mongolia and the Government member in charge of finance and budget issues and the President of the Bankers Association respectively, and appointed by the joint order issued by the President of the Bank of Mongolia and the Government member in charge of finance and budget issues;

22.2.5. The Executive Director of the Corporation;

22.3. Three members of the National Committee stipulated in article 22.2.4 shall be appointed with a term of office of four years and may be reappointed once.

22.4. The members stipulated in article 22.2.4 shall meet the following requirements:

22.4.1. not having any overdue debts under a Loan or Guarantee agreement;

22.4.2. not having any criminal record;

22.4.3. ethical and business reputations should not conflict with the management of the Corporation;

22.4.4. having specialized in any of the fields of economy, finance, banking, insurance or law;

22.4.5. having at least 5 years of executive experience in finance, banking or insurance;

22.4.6. not holding a political position or an administrative position in any political party;

22.4.7. not working in any financial organization or bank;

22.4.8. not holding any stake of financial organization or bank, or being a related person;

22.4.9. it has been proven that the bankruptcy or insolvency of a legal entity for which he/she served as an authorized official was not caused by that person;

22.5. The amount of bonus or remuneration of members, with the exception of the Chairman of the National Committee and Executive Director of the Corporation, shall be approved by a joint order of the President of the Bank of Mongolia and the Government member in charge of finance and budget issues.

22.6. The working procedure of the National Committee and the code of conduct for members of the National Committee, the Executive Director and employees of the Corporation shall be approved by the resolution of the National Committee.
/This provision was revised by the law dated 08 February, 2018/

22.7. Subject to the joint decision of the President of the Bank of Mongolia and the Government member in charge of finance and budget issues, a member of the National Committee shall be removed before the end of a term of office as stipulated in article 22.3 for any of the following reasons:

22.7.1. a member has requested to resign on his/ her own decision;

22.7.2. a member has reached the age of retirement;

22.7.3. a medical report is issued that a member is deemed incapable of discharging his/her duties due to serious illness;

22.7.4. a member has performed his/her duties unsatisfactorily twice or more;

22.7.5. a member has failed to meet all requirements as stipulated in article 22.4;

22.7.6. a member has violated the ethical rules;

22.7.7. a final court decision was issued that a member has committed a crime;

22.8. The principle for non-simultaneous appointment and dismissal of three members specified in article 22.2.4 shall be applied.
/This provision was revised by the law dated 08 February, 2018/

22.9. A member of the National Committee is prohibited to work in a bank within 1 year after his/her dismissal.

22.10. A member of the National Committee shall follow the Law on Regulating Public and Private Interests in Public Service and Preventing Conflicts of Interests.

Article 23. Meeting of the National Committee

23.1. The main form of activities of the National Committee is the meeting.

23.2. The head of the meeting shall be the Chairman of the National Committee.

23.3 In temporary absence of the Chairman of the National Committee, any of members of the National Committee appointed by the Chairman of the National Committee shall perform his/her duties. The acting member who temporarily performs the duty of the Chairman of the National Committee shall implement and be accountable for duties within the capacity granted by the Chairman of the National Committee.

23.4. The National Committee shall meet at least once in a quarter, and the members' opinions on issues to be discussed may be taken electronically or in other forms, and the member of the National Committee shall attend the meeting in person at least twice a year.
/This provision was revised by the law dated 08 February, 2018/

23.5. The Chairman of the National Committee shall convene an extraordinary meeting based on a written request made by at least two members or the Executive Director.

23.6. A meeting of the National Committee shall be effective by participation of a majority of members of the National Committee.

23.7. Employees of the Corporation and external experts may be invited to attend the meetings of the National Committee.

23.8 Meeting minutes shall be recorded and the members' attendance signing shall be part of the meeting minutes for approval.

23.9. The National Committee shall make a decision with the majority of the participating members and the decision shall be approved by signing of the Chairman of the National Committee.

23.10. In the case of a tie among the members, the head of the meeting shall use his/her casting vote.

23.11. The decision made by the National Committee shall be in the form of a resolution.

23.12. The Chairman or a member of the National Committee believes that there may be a conflict of interests in an agenda of the meeting for discussion, it shall be notified prior to the beginning of a meeting and that member shall not participate in any discussions and voting.

Article 24. Powers of the National Committee

24.1. The National Committee shall have the following powers:

24.1.1. to develop the Corporation's charter and its amendment drafts;

24.1.2. to approve guidelines or regulations and make amendments within its capacity and ensure control on implementation;

24.1.3. to approve the Corporation's strategic and action plan and monitor its implementation;

24.1.4. to approve the Corporation's organizational structure, its operational budget and investment plan and monitor the performance of the Corporation;

24.1.5. to select and appoint the Executive Director of the Corporation and conclude a contract with him/her or dismiss him/her;

24.1.6. to make a decision on reimbursing depositors or providing financial support specified in 11.1.2 of this law;
/This provision was amended by the law dated 08 February, 2018/

24.1.7. to determine an insurance premium rate;

24.1.8. to select an auditing firm;

24.1.9. to make a decision on whether to approve the Corporation's financial statements;

24.1.10. to discuss  results of an internal audit report of the Corporation and make a decision;
/This provision was amended by the law dated 08 February, 2018/

24.1.11. to submit the semi-annual report on activities of the Corporation to the President of the Bank of Mongolia and to the Government member in charge of finance and budget issues;

24.1.12. to perform other duties as specified in this law and the Corporation's charter;

Article 25. Executive Director of the Corporation

25.1. The Executive Director, within his/her capacity vested under the Corporation's charter and the contract made with the National Committee shall manage and administer the day-to-day activities of the Corporation in accordance with the operational and strategic plan approved by the National Committee.

25.2. The National Committee shall select an Executive Director of the Corporation in an open and transparent manner and appoint for a term of office of 4 years.
/This provision was amended by the law dated 08 February, 2018/

25.3. The Executive Director shall meet the requirements stated in article 22.4 of this law.

25.4. The rights and duties of the Executive Director shall be regulated by the Corporation's charter.

25.5. The Executive Director of the Corporation shall be dismissed from the post prior to his/her tenure on the grounds specified in article 22.7 of this law.

25.6. In the event that the Executive Director of the Corporation is dismissed from the post on the basis of article 22.7, the National Committee shall appoint an acting Executive Director until the appointment of next successor.
/This provision was revised by the law dated 08 February, 2018/

25.7. In the event of an annual leave, an official domestic or international business trip or is expected to be ill for a longer period, the Executive Director of the Corporation may transfer his/her post to a person approved by the National Committee, and such transfer shall not release him/her from any accountability.

25.8. The Executive Director of the Corporation shall not become an employee in a bank within the period of one year following the expiry of his/her term of offices.

Article 251. Inspection of the Corporation
/This clause was added by the law dated 08 February, 2018/

251.1. The Corporation shall have an auditor. An auditor shall have the following powers of a state inspector:

 251.1.1. to collect reports, news and information specified in article 29 of this law from the bank;

251.1.2. to monitor the payment of deposit insurance premiums and ensure its fulfillment;

251.1.3. to monitor the activity of paying insurance compensation;

251.1.4. to take measures to solve violations in accordance with the Infringement law that are identified during the inspection;

251. 2. The Executive Director of the Corporation shall be a state senior inspector, and the rights of a state senior inspector and state inspector shall be granted or revoked by the President of the Bank of Mongolia.

Article 26. Confidentiality

26.1. The members of the National Committee, employees or an auditor of the Corporation as well as other contractors hired by the Corporation shall not disclose any data or information found or known during the performance of their duties or deemed as confidential by the Corporation or bank, its customers and third party.
/This provision was revised by the law dated 08 February, 2018/

26.2. The obligations for the members of the National Committee, employees of the Corporation as well as other contractors hired by the Corporation as stated in article 26.1 of this law, shall persist effective after the termination of their duties related to the Corporation.

Article 27. Annual Operational and Financial Statements

27.1. The financial statements of the Corporation shall be drawn up in line with the Accounting law and be audited.
/This provision was revised by the law dated 08 February, 2018/

27.2. The financial statements of the Corporation shall have the components defined in article 10.2 of the Accounting Law.

27.3. The annual operational report and the financial statements of the Corporation shall be audited at least once in two years by an international auditing firm that has been selected and appointed by the National Committee, and the auditor's opinions shall be presented to the President of the Bank of Mongolia and the Government member in charge of finance and budget issues.

27.4. The Executive Director shall be responsible for the accuracy of the financial statements.

27.5. The Annual Report, including the auditor's opinion specified in article 27.1 of this law shall be presented to the National Committee for review and approval before March 1st of the following year.

27.6. The Annual Report stated in article 27.1 of this law shall presented to the President of the Bank of Mongolia and the Government member in charge of finance and budget issues before April 1st of the following year.
/This provision was amended by the law dated 08 February, 2018/

27.7. The Annual Report of the Corporation, including its balance sheet, its income and expenditure statement as well as the auditor's opinion shall be publicly disclosed.

Article 28.  Liaison of the Corporation with government organizations and other entities

28.1. Liaison activities of the Corporation with government organizations and other entities shall be regulated by the Corporation's charter.

CHAPTER FIVE

MISCELLANEOUS

 Article 29. Obligations of bank to provide reports, data and information

29.1. Banks shall provide the Corporation with the necessary data or information in the manner and within the timelines for performance of legal tasks of the Corporation.

29.2. On the Corporation's request, the banks shall submit an additional information which the Corporation needs to perform its legal tasks.

29.3. The Regulation on reporting and provision of information by banks shall be approved by the National Committee.

29.4. A Bank shall be responsible for the accuracy of data and information submitted to the Corporation.

29.5. A bank is obliged to disclose information on the deposit insurance scheme, coverage level and the reimbursement procedure to its depositors in line with a regulation which is approved by the National Committee.

29.6. Banks shall not publicize the information referred to in article 29.5 of this law with intention of advertisements or use it in a way that might negatively affect the stability of the banking system or the depositors' confidence.

Article 30. Liability for violation of legislations

30.1. If the act of an official who violates this law is not criminal, he or she shall be liable as provided in the State Public Law.

30.2. Any person or legal entity who violates this law shall be charged with the liability specified in the Criminal Law or the Infringement Law.
/This provision was revised by the law dated 04 December, 2015/

Article 31. Effectiveness of the Law

31.1. This law shall come into effect from January 10, 2013.

SPEAKER OF THE STATE GREAT KHURAL OF MONGOLIA

ENKHBOLD. Z