(2022-12-06-ны өдрийн орчуулгын хяналт)                                       Unofficial translation

LAW OF MONGOLIA

May 21, 2021                                                                                              Ulaanbaatar city

ON DEPOSITS, LOANS AND BANKING TRANSACTIONS OF BANK AND AUTHORIZED LEGAL ENTITY

/Revised edition/

CHAPTER ONE

GENERAL PROVISIONS

Article 1.Purpose of the Law

1.1.The purpose of this law is to regulate relations with respect to deposits, loans or banking transactions provided from banks and authorized legal entities to citizens, legal entities, or entity whose legal status is defined in accordance with the legislations of Mongolia in order to support the proper development of the financial market.

Article 2.Legislation on deposits, loans and banking transactions of banks and authorized legal entities

2.1.Legislation on deposits, loans or banking transactions of banks and authorized legal entities consist of the Civil Code, the Law on Combating Money Laundering and Financing of Terrorism, the Law on Banking, the Law on Non-Banking Financial Activities, and the Law on Savings and Credit Cooperatives, Law on National Payment System, Law on Pledge of Movable and Intangible Property, Law on Pledge of Immovable Property, this Law and legal acts enacted in conformity with them.

2.2.If an international treaty, to which Mongolia is party, provides otherwise, the provision of such international treaty shall apply.

2.3.The law on National Payment System shall regulate the relations with respect to managing, organizing, regulating and overseeing the national payment system of Mongolia.

Article 3.Scope of the Law

3.1.This law regulates relations with respect to deposits, loans or banking transactions of banks and authorized legal entities.

3.2.This law shall regulate the relations with respect to banking transactions of an entity who provides services within a limited scope as set out in the law.

Article 4.Principles for deposits, banking transactions and loans of banks and authorized legal entities

4.1.Banks and authorized legal entities shall adhere to the following principles for deposits, loans or banking transactions to be provided from banks or authorized legal entities to citizens, legal entities, or entity whose legal status is defined in accordance with the legislations of Mongolia. /hereinafter referred to as "Customer"/:

4.1.1.to ensure confidentiality, safety and reliability of operations;

4.1.2.to provide general information and advice on operations to customers and ensure transparency;

4.1.3.to ensure equal participation or inclusion of parties;

4.1.4.not to put personal interests above the interests of customers;

4.1.5.to provide services to customers who meet the requirements specified in legislations.

Article 5.Definitions of Legal Terms

5.1.The following terms used in this law shall be understood in the following meanings:

5.1.1."loan" means money provided by a bank or an authorized legal entity in any form to another person with or without interest for a specific purpose, term, and repayment conditions on the basis of a contract;

5.1.2."entity whose legal status is defined according to the legislations of Mongolia" means an entity who is responsible or whose rights and obligations are specifically defined by law;

5.1.3."monetary deposit" means money denominated in national currency-tugrik or foreign currency deposited by a citizen, legal entity, or an entity whose legal status is defined in accordance with the legislations of Mongolia with a bank or an authorized legal entity on the basis of a contract;

5.1.4."terms and conditions of operation" means a document reflecting the general regulation of rights, obligations, responsibilities and activities of the parties for deposits, banking transactions and loans from banks and authorized legal entities to citizens, legal entities, or entity whose legal status is defined in accordance with the laws of Mongolia;

5.1.5."correspondent account" means an account opened on the basis of a contract to provide payment services to a citizen, a legal entity, or an entity whose legal status is determined according to the legislations of Mongolia, by a person who has received permission to provide payment services for the purpose of issuing banking transactions or electronic money;

5.1.6."interest" means payment or price for the use of monetary assets on the basis of the contract;

Note: The price of loans and deposits, which means income for the owner of an asset and cost for the user.

5.1.7."transaction" is defined in article 5.1.18 of the law on National Payment System;

5.1.8."authorized legal entity" means a legal entity that has been licensed to provide payment services by the Bank of Mongolia, and to engage in deposit and loan operations by the Financial Regulatory Commission, in accordance with the law;

5.1.9."final owner" is defined in article 3.1.6 of the Law on Combating Money Laundering and Terrorist Financing.

Article 6.Procedures for provision of deposits, banking transactions and loans by banks and authorized legal entities

6.1.Banks and authorized legal entities shall inform general terms and conditions of activities specified in article 8 of this law to the public transparently for deposits /hereinafter referred to as "deposit"/, banking transactions /hereinafter referred to as "transaction", and loan operations.

6.2.Banks and authorized legal entities shall provide deposit and loan services to customers on the basis of contracts.

6.3.Banks and authorized legal entities shall provide the customer with the opportunity and conditions to familiarize themselves with the terms of the service and the contract when concluding a contract in accordance with article 6.2 of this law.

6.4.Only banks and authorized legal entities authorized in accordance with the law shall carry out activities specified in the chapters from two to four of this law.

6.5.Banks and authorized legal entities shall enforce the customer to pay fees and charges stipulated in the contract, and shall not double take any service fees for the same type of services provided.

6.6.Banks and authorized legal entities shall reasonably determine the rates and amounts of charges and fees for their products and services, which shall be supervised by the Bank of Mongolia and the Financial Regulatory Commission.

6.7.If the Bank of Mongolia and the Financial Regulatory Commission, within the scope of their supervisory and regulatory functions, has not proposed or not received a proposal to reduce the percentage and amount of charges or fees for products and services set by banks and authorized legal entities, a decision to set the percentage and amount of charges or fees shall be cancelled. They have the right to inform it to the public.

6.8.Banks and authorized legal entities are obliged to keep information considered as "customer's secret" and not to use it in any way at all stages of concluding a service contract specified in this law.

Article 7.Provision of services by banks and authorized legal entities in electronic form

7.1.Banks and authorized legal entities may provide deposit, transactions, and loan services related to that account in an electronic form to customers who have signed a written agreement and opened an account in accordance with article 9 of this law.

7.2.As set out in article 7.1 of this law, passwords, secret codes, and electronic signatures that meet confidentiality requirements may be used to provide services in electronic form, and these shall be considered equivalent to signatures signed in electronic transactions, loan agreements, and other transactions.

7.3.Banks and authorized legal entities shall not open any accounts electronically to persons who has not had an account or have not maintained stable financial relations.

Article 8.General Conditions of Activities

8.1.The Bank of Mongolia and the Financial Regulatory Commission shall approve the requirements for deposits of banks and authorized legal entities and transactions of loan and payment service providers within the scope of their review and regulation functions as set forth in this law.

8.2.The general conditions of activities specified in this law include the terms of deposit, transactions, and loan services provided by banks and authorized legal entities to customers, and the rights, obligations, responsibilities, and procedures of the parties.

Article 9.Opening and Closing Savings, Current and Loan Accounts

9.1.Banks and authorized legal entities shall open savings, current and loan accounts to customers in accordance with the documents and procedures specified in the Law on Combating Money Laundering and Terrorist Financing when carrying out deposit, transactions and loan operations.

9.2.Banks and authorized legal entities shall prepare the following documents when opening an account for a citizen in accordance with the law:

9.2.1.application request;

9.2.2.form of signature to be drawn on the payment receipt by an entity who disposes the funds;

9.2.3.information on a final owner;

9.2.4.others prescribed by law.

9.3.Banks and authorized legal entities shall prepare the following documents when opening an account for a legal entity or a person whose legal status is defined in accordance with the laws of Mongolia:

9.3.1.application request;

9.3.2.charter and its similar documents;

9.3.3.seals and seal imprint;

9.3.4.surname /father/mother's/name of an official who will dispose the funds and his/her own name and the form of signature to be drawn on the payment receipt. The form of signature must be notarized;

9.3.5.information on a final owner;

9.3.6.others prescribed by law.

9.4.Clause 9.3.3 of this law shall not be subject to cases where an authorized entity, who supervises and regulates persons whose legal status is determined according to the laws of Mongolia and legal persons registered in foreign countries, does not require the use of stamps or seals.

9.5.Banks and authorized legal entities are responsible for obtaining any updated information on changes in documents of their customers in case of re-opening a savings, current or loan account.

9.6.If a customer refuses to provide any information specified in article 9.5 of this law, the bank and the authorized legal entity shall refuse to provide services, or close the account, and terminate the relevant contract, as set out in the general conditions of activities.

9.7.Banks and authorized legal entities shall open an account within five working days after reviewing the documents specified in clauses 9.2 and 9.3 of this law, or refuse to open an account if these documents do not meet the requirements specified in the law.

9.8.The bank may close the account in the following cases:

9.8.1.customer has requested to close an account;

9.8.2.the conditions specified in the contract with the customer have been fulfilled;

9.8.3.the conditions specified in 9.6 of this law have been formed;

9.8.4.other grounds provided by law.

9.9.Banks and authorized legal entities may open or close accounts electronically based on requests expressed by their customers using technical tools and software, except as specified in article 7.3 of this law.

9.10.It is forbidden to use any information regarding the money in any account for the purpose of deceiving others or creating false identification.

CHAPTER TWO

MONEY DEPOSIT ACTIVITIES

Article 10.Money Deposit

10.1.Banks and authorized legal entities /hereinafter referred to as "Depository"/ and citizens, legal entities, or entity whose legal status is determined according to the laws of Mongolia /hereinafter referred to as "Depositor"/ shall conclude an agreement in compliance with the Law on Combating Money Laundering and Terrorist Financing and the general conditions of activities specified in article 8 of this law, and provide deposit services thereunder.

10.2.When signing a deposit agreement with the depositor, the depository shall provide accurate information regarding its activities.

10.3.The depository shall present the conditions of deposit services and contractual rights and obligations of the depositor receiving these services clearly.

Article 11.Deposit Agreement

11.1.In accordance with article 454.1 of the Civil Code, the depository shall be obliged to return the depositor's deposit with interest in that currency.

11.2.The deposit agreement shall specify the deposit term, its interest rate, interest calculation procedure, contract cancellation and early termination conditions, and any liabilities of parties for non-fulfillment of contractual obligations.

11.3.The depository may conclude the deposit agreement with the depositor in electronic form in accordance with the deposit book, deposit certificate and article 7 of this law.

11.4.The deposit agreement concluded in electronic form shall come into force when the depositor accepts the electronic document and sends it with an electronic signature for confirmation in the form prescribed by law.

Article 12.Term of Deposit Agreement

12.1.The deposit agreement shall be concluded for a definite or indefinite period.

12.2.Deposits deposited for a specific period are considered term deposits, and deposits deposited for an indefinite period are considered call deposits.

12.3.If the deposit agreement is concluded for a certain period, the depository is obliged to return the depositor's money and pay its interest according to the agreement after the expiration of that period.

12.4.In the case of cancellation of the term deposit agreement before the agreed term at the depositor's request, or in case of expenditure transactions, the deposit interest will be reduced by the amount specified in the agreement, depending on the term of the deposit.

12.5.The depository shall enter into a call deposit agreement only with citizens.

12.6.Unless otherwise specified in the deposit agreement, if the period of the term deposit agreement has expired, but the depositor has not requested the deposited money, or not submitted any request on extension of the agreement, the depository shall take the following measures:

12.6.1.consider citizens' deposits as call deposits and calculate interest at the same rate as call deposits;

12.6.2.transfer the savings account of a legal entity or an entity whose legal status is determined according to the laws of Mongolia to the current account specified in the contract.

12.7.The depository has no right to unilaterally change or terminate the term deposit agreement.

12.8.The depositor shall have the right to demand the depository to pay any loss caused by the non-fulfillment of obligations specified in clauses 12.3 and 12.7 of this law.

12.9.The savings account shall not be used as a current account and is prohibited to provide services in connection with any means of payment.

12.10.The Financial Regulation Committee shall approve and supervise the implementation of the regulations related to the savings and credit cooperatives specified in article 12.6 of this law.

Article 13.Interest on Deposits

13.1.The depository shall publicly announce the interest rate and other conditions of the deposit in accordance with the law, and shall not conclude a contract with the depositor in any way different from the announced interest rate and conditions.

13.2.The rate of interest on term deposits remains the same as originally agreed upon, unless such interest rate is specified in the deposit agreement differently, or the depositor cancels the deposit agreement earlier prior to its expiry, or spends money from the deposit account on the basis of the law.

13.3.In the event that the depository changes an interest rate of the call deposit, the interest rate specified in the deposit agreement shall be considered as changed one month after such change is notified to the public, and any income made during the period after the interest rate was changed shall be subject to interest at the rate determined by the depository.

13.4.In case the depository does not agree to the interest rate changed according to article 13.3 of this law, the depository may refuse to deposit an additional income.

13.5.The Bank of Mongolia and the Financial Regulatory Commission will jointly approve and monitor the implementation of the method of calculation of the deposit interest rate.

Article 14.Rights and Obligations of Depositor and Depository

14.1.The Depositor has the following rights and obligations:

14.1.1.choose the form of disposal of the saved money;

14.1.2.receive deposit interest income on deposited funds;

14.1.3.check deposit transactions and balances against account statements and other relevant documents;

14.1.4.ensure joint ownership of deposits or granting of power of attorney unless otherwise specified in the deposit agreement;

14.1.5.inherit or bequeath savings deposit;

14.1.6.gift savings deposit;

14.1.7.submit a claim to the competent authority or to court to remove any damage caused by the depository's failure to properly fulfill obligations;

14.1.8.pledge the deposit;

14.1.9.other rights and obligations specified in the law and deposit agreement.

14.2.The Depository has the following rights and obligations:

14.2.1.open an account in the name of the depositor and issue a deposit book or deposit certificate;

14.2.2.unless otherwise specified by law, make transactions from the depositor's deposit only with his/her permission or instructions;

14.2.3.return the money deposited by the depositor and pay interest on the deposit according to the conditions specified in the deposit agreement at the depositor's first demand;

14.2.4.calculate an amount of deposit interest accurately and grant it to the depositor;

14.2.5.not to provide, disclose, or use any information considered "confidential" by the depositor or third party to others in any form, unless otherwise provided by law;

14.2.6.ensure information security;

14.2.7.compensate any damage caused by his/her own fault;

14.2.8.other rights and obligations specified in the law and deposit agreement.

14.3.The depository shall use the deposited money for its own transactions and ensure its integrity.

Article 15.Savings Deposit Account

15.1.The depository shall open a deposit account for each depositor.

15.2.If the depositor has received a certificate of deposit, he/she may not open an account specified in article 15.1 of this law.

Article 16.Regulations on Transactions Related to Savings Deposits

16.1.The depositor may perform deposit income and expenditure transactions through a representative with a written power of attorney. The depository shall carry out transactions on the basis of a valid power of attorney that meets the requirements specified in the law and the documents of an authorized representative specified in the law.

16.2.In the event that the depositor dies or is declared dead, the depository may give the deposit to a person with legal or testamentary inheritance rights, or renew the deposit agreement in his/her name.

CHAPTER THREE

FUND TRANSFER ACTIVITIES

Article 17.Transfer of Funds

17.1.The bank and the authorized legal entity shall make a transfer based on the contract concluded with the customer upon his/her instructions and consent.

17.2.Banks and authorized legal entities will make transfers within the customer's funds based on checking the payment order.

17.3.The payment order can be in written or electronic form.

17.4.Banks and authorized legal entities shall transfer payment orders received from customers within the time specified in the regulations approved by the Bank of Mongolia, following the order of receipt, unless otherwise specified by law.

17.5.Deposits, loans, current account income and expenditure transactions performed through banks and authorized legal entities may be in cash or non-cash form.

17.6.ransfers can be made by tangible or intangible means of payment approved by the Bank of Mongolia in accordance with the law.

17.7.Payments based on payment claims shall be made only with the consent of the person authorized to spend the debtor's funds. Transfer by promissory note shall be governed by the Law on Promissory Notes.

17.8.Banks and authorized legal entities shall correct any erroneous transfers and indemnify the customer.

17.9.Banks and authorized legal entities shall be liable for damages caused by failure to make the transfer within the period specified in article 17.4 of this Law without any excuses or reasonable cause.

17.10.At the customer's request, the bank or authorized legal entity shall provide the customer with the statement of the transaction.

17.11.Pursuant to the Law on the National Payment System, the Bank of Mongolia shall approve regulations and instructions on payment orders and transfers, and make decisions, and monitor their implementation.

Article 18.Current account and Sub-account holder

18.1.The amount of interest to be calculated on the balance of the current account shall be jointly determined by the Bank of Mongolia, the Financial Regulatory Commission and the central state administrative body in charge of financial and budgetary matters, taking into account the economic situation.

18.2.A current account can have an account holder and a sub-account holder.

18.3.The sub-account holder is a person authorized to exercise the rights of the current account holder from the current account within the limits of the rights granted by the current account holder.

18.4.The sub-account holder will make spending transactions from the current account within the power of attorney issued by the current account owner in accordance with the law.

CHAPTER FOUR

LOAN ACTIVITIES OF BANKS AND AUTHORIZED LEGAL ENTITY

Article 19.Loan Activities of Banks and Authorized Legal Entity

19.1.The loan utilization period begins when a lender grants the loan to a borrower in a form agreed under the contract and ends when a borrower repays the loan to the lender.

19.2.The lender is responsible for determining the purpose of the loan, its interest rate, term and other conditions and informing such information to the public.

19.3.The lender shall open a loan account and provide a loan to the borrower on the basis of the loan agreement concluded by mutual negotiation with the borrower regarding the purpose of the loan, its interest rate, term and other conditions.

19.4.Unless otherwise specified by law, loans may be granted in the form of credit rights, and credit cards, credit lines, using technical equipment and software.

19.5.The loan is considered granted when it is transferred to the borrower's loan account as set out in the loan agreement or the borrower uses a loan from the loan account.

19.6.Borrower and lender shall mutually agree and specify a form of lending in the loan agreement.

19.7.The lender will provide advice and information on exchange rate risk to borrowers requesting loans in foreign currency.

19.8.The loan shall be used for the purposes specified in the loan agreement, and the lender shall check or inspect any use of the granted loan, and if the borrower fails to use the loan for the intended purpose, the loan agreement shall be terminated by the initiative of a party, and the borrower shall be required to repay the loan immediately.

19.9.In the event that the borrower has paid the secured loan, or any obligations of the loan agreement have been terminated in accordance with the law or the loan agreement, the lender will close the borrower's loan account, release the loan collateral, and notify the State Registration Authority of Property Rights thereof.

19.10.The Bank of Mongolia shall approve the procedures related to the operation of loans granted by banks. The Financial Regulation Committee shall approve the procedures related to the operations of loans granted by authorized legal entities. They shall monitor implementation of those procedures.

19.11.The procedure related to the evaluation of collateral for loans issued by banks was jointly approved by the Bank of Mongolia and the central state administrative body in charge of financial and budgetary matters, and the procedure related to the evaluation of collateral for loans issued by authorized legal entities was jointly approved by the Financial Regulation Committee and the central state administrative body in charge of financial and budgetary issues. They shall monitor implementation of those procedures.

19.12.A foreign currency loan may be granted to an entity that has a source of foreign currency income or is protected from exchange rate risk.

19.13.The lender reserves the right to refuse to grant a loan, or to demand repayment of a given loan, if there is a situation where the borrower's property deteriorates and the borrower is unable to repay the loan.

19.14.The borrower legal entity is obliged to reflect the granted loan in its financial statement and provide the relevant information to the lender. If an entity whose legal status is defined in accordance with the laws of Mongolia is obliged to submit a financial statement by law, this clause shall also apply.

19.15.The lender shall not be paid a loan interest in advance by the borrower when the lender grants the loan.

19.16.The lender shall enter into an agreement with the guarantor in accordance with the requirements set forth in article 234 of the Civil Code.

Article 20.Loan agreement

20.1.Pursuant to article 451.1 of the Civil Code, the bank or authorized legal entity shall transfer the funds to the borrower within a certain period of time in accordance with the grounds and procedures specified in the law, and the borrower shall pay back the funds and its interest if specified in the loan agreement within the period set out in the loan agreement.

20.2.The loan agreement includes the following:

20.2.1.loan amount;

20.2.2.type of currency;

20.2.3.loan account number;

20.2.4.purpose and form of loan;

20.2.5.term of the loan agreement;

20.2.6.conditions for repaying the loan in whole or in part;

20.2.7.amount of loan interest;

20.2.8.address of residence of the parties involved in the loan agreement;

20.2.9.method and form of ensuring performance of duties, if agreed;

20.2.10.conditions for changing the terms of the contract or terminating the contract;

20.2.11.rights, duties and responsibilities of lenders and borrowers;

20.2.12.other necessary things not prohibited by law.

20.3.Expiration of the loan agreement shall not be a reason to exempt the borrower from any obligations to pay the loan, its interest or increased interest.

20.4.Any occurrence of the situation specified in article 19.8 of this Law shall not be a reason to exempt the borrower from any obligations to pay the loan, its interest or increased interest.

20.5.Lenders can jointly provide credit sources for financing specific projects and measures. An agreement will be concluded for provision of such joint credit.

20.6.Credit relationships with foreign sources under the control of the government and capital sources of international organizations shall be regulated by the agreement concluded between the borrower and the government, the bank that executes the transfer, and a legal entity authorized to conduct loan activities.

20.7.A co-borrower is a person who has the same rights and obligations as the borrower in the loan agreement.

20.8.According to the loan agreement, an entity who is obliged to assume contractual obligations in whole or in part is called a co-obligor.

Article 21.Loan interest

21.1.The loan interest is calculated for the loan period.

21.2.If the borrower fails pay the loan as specified in the loan agreement, or if the loan agreement is terminated earlier by the lender's initiative on the grounds specified in the law or the loan agreement, the principal interest of the loan, or increased interest if specified in the loan agreement, shall be paid for the period until the loan is fully repaid.

21.3.The Bank of Mongolia and the Financial Regulatory Commission will jointly approve and monitor the implementation of the methodology for calculating the interest rate.

Article 22.Personal loan file

22.1.The lender shall open a personal loan file for each loan granted.

22.2.The personal loan file shall have the following structure:

22.2.1.loan application;

22.2.2.loan agreement;

22.2.3.the method chosen to ensure the fulfillment of obligations of the loan agreement and related information;

22.2.4.information on income, if a citizen;

22.2.5.information on income and financial statements submitted to the tax authorities in accordance with the law, if a legal entity or an entity whose legal status is determined according to the laws of Mongolia;

22.2.6.documents proving the ratio of debt and income of the borrower;

22.2.7.materials for checking loan utilization;

22.2.8.credit database information on borrower's loans from other creditors or lenders and monetary payment obligations to third parties;

22.2.9.other information and documents specified in the general operating conditions and deemed necessary by the lender for granting loans.

22.3.In accordance with the procedure specified in article 19.11 of this law, the description of the property to be pledged for the performance of loan obligations shall include an assessment and amount of the property pledged by the borrower, that is provided by the lender or an asset appraiser appointed by the lender who has visited the site and inspected the property. Based on the above definition, the integrity, value, and quality of the property shall be written in the document of inspection of the property pledged for the performance of loan obligations.

22.4.Name of loan guarantor or guarantor's father /mother/, personal name, residential address, customer bank name, and current account number shall be included in the register of loan guarantors and guarantors. The production capacity and activities of the loan guarantor and the guarantor have been reviewed and recorded in the same way as the borrower.

22.5.Loan usage with specific quantities and value amount describing whether the loan is being used effectively according to its intended purpose shall be determined and written in the loan usage inspection document as set out in the procedures specified in articles 19.10 and 19.11 of this law.

22.6.The lender shall not demand documents or information from the borrower other than those related to loan activities. This section shall not apply to any documents or information required by law to identify the customer.

Article 23.Loan guarantee

23.1.Loan guarantee is a promise by one party (the guarantor) to assume the debt obligation of a borrower if that borrower defaults, and a guarantor is an entity who guarantees the loan or guarantees to the lender that the borrower can pay the loan and its interest within the period specified in the loan agreement, and if the borrower is unable to pay, the loan is paid by a third party assuming the responsibility of making the payment in whole or in part on the borrower's behalf.

23.2.The borrower shall enter into an agreement with the guarantor in accordance with the requirements of the Civil Code.

23.3.The guarantor fulfills any obligations in accordance with the law and agreement, and assume the same responsibility as the borrower.

23.4.The loan guarantor or guarantor is an entity who has assets and is financially capable of fulfilling obligations to pay the loan. Corresponding banks, authorized legal entities, and organization that has registered it in the state register of property rights may make a reference statement for the financial capacity of the loan guarantor or guarantor.

23.5.The guarantee shall be terminated when the borrower fulfills its obligations under the loan agreement or when the guarantor fulfills its obligations to the borrower.

Article 24.Loan collateral

24.1.Relationships related to loan collateral shall be regulated by a special law.

Article 25.Premature repayment of loans

25.1.The borrower may fulfill obligations of the loan agreement in full or in part at any time prior to the period agreed in the loan agreement.

25.2.If the borrower fulfills obligations of the loan agreement earlier before the period agreed in the loan agreement, the loan agreement will be terminated.

Article 26.Loan repayment

26.1.The borrower is responsible for repaying the loan according to the conditions specified in the loan agreement.

26.2.If stipulated in the agreement, the loan and its interest shall be paid without dispute from the funds in the accounts of the borrower, co-borrower, co-obligor, and loan guarantor upon the due date.

Article 27.Classification of loans

27.1.The lender shall conduct research on the loans granted, classify the loan balances in accordance with the laws and regulations, and establish a corresponding risk fund.

CHAPTER FIVE

CONTROL

Article 28.Control on deposits, banking transactions and loans activities of banks and authorized legal entities

28.1.The Bank of Mongolia shall make decisions on deposit and loan activities of banks, and transactions of banks and authorized legal entities, and the Financial Regulatory Commission shall make decisions on deposit and loan activities of authorized legal entities within the scope of its supervisory and regulatory functions and monitor their implementation.

CHAPTER SIX

MISCELLANEOUS

Article 29.Liability for Violation of Legislations

29.1.Any person or legal entity that violates this law shall be charged with the responsibility specified in the Criminal Law or the Violation Law.

Article 30.Entry into force of the Law

30.1.This law shall be entered into effect on July 1, 2021.

THE CHAIRMAN OF THE STATE GREAT KHURAL OF MONGOLIA G.ZANDANSHATAR