DUSHANBE, January 21, 2011, Asia-Plus  -- With support from international organizations, the National Bank of Tajikistan (NBT) has worked out a draft law on liquidation of credit organizations, the NBT head Sharif Rahimzoda told reporters on January 20.

“The government has endorsed the bill and it is currently under consideration in the lower house of the parliament,” Rahimzoda said.

According to him, they have worked out the bill because the mechanism of liquidation of credit organizations must differ from the mechanism of liquidation of other joint-stock companies.  “Financial institutions include not only funds of shareholders but also funds of depositors, and therefore, the mechanism of liquidation of them should differ from the mechanism for liquidation of others joint-stock companies.”

The Tajik central bank said they also initiated amendments to the country’s legislation that would allow closing branches of foreign banks in Tajikistan.  The amendments have almost been prepared and will be submitted for consideration to the government in the near future.

“Under these amendments, foreign banks will have the right to open only their subsidiaries in Tajikistan,” said Rahimzoda, “It is more profitable to work with subsidiaries than with branches.  Branch and subsidiary differ from each other by their tasks and requirements.  Subsidiary must have authorized capital of 50 million somoni, while branch does not have such an authorized capital.”

At present the branch of only one foreign bank, Bank Tejarat (a state-owned bank in Iran), now operates in Tajikistan.

“We are currently conducting negotiations with representatives of this bank on upgrading the bank’s branch in Tajikistan into subsidiary, the NBT head said.

He added that a number of foreign banks, in particular from the United Arab Emirates (UAE), Qatar and Pakistan, had already applied to the Tajik central bank over opening of their subsidiaries in Tajikistan.