DUSHANBE, July 25, 2014, Asia-Plus -- Tajik deputy finance minister notes that it cannot be ruled out that the government will assume the 100% ownership interest in Open Joint-tock Company Agroinvestbonk (AIB).

“There is an improvement in Agroinvestbonk’s activities but this situation cannot be called optimal,” First Deputy Finance Minister, Jamoliddin Nouraliyev, told a news conference in Dushanbe on July 25.

According to him, the government is trying to introduce proper order in the bank.  “In 2012, the government made a decision on recapitalization of AIB and injected 700 million somoni in the bank,” said Nouraliyev.  “200 million somoni went to replenishing the bank authorized capital stock and 500 million somoni were assigned for the swap.”

“A joint mission of the World Bank and the International Monetary Bank (IMF) was in Tajikistan.  They assessed the bank and offered their recommendations on its further fate,” said Tajik official.  “The financial situation of the bank now depends on further steps that will be taken.  The government now owes 52 percent of shares and the remainder is owed by initial founders, whose share decreased after the recapitalization.”

28 percent of the population keeps deposits in Agroinvestbonk and specific measures on further structural changes in the bank will be taken this year or in 2015, Nouraliyev said, noting that either a bridge bank will be created or international management team will be hired to run the bank.      

The deputy minister noted that it could not be ruled out that the government would assume the 100% ownership interest in Agoinvestbonk.

We will recall that Mr. Jonathan Dunn, the head of the IMF team, noted in April 2013 that strengthening of Tajikistan’s financial system requires the establishment of financial accountability, the improvement of governance at some banks, and the elimination of directed lending.  In this regard, resolving AIB in line with good international practice is a high and urgent priority, he said.  To protect the value of AIB and the government’s investment in the bank, the mission recommended that the government hires, on a competitive basis, a reputable international management team to run the bank. The mission urged Tajik central bank to refrain from regulatory forbearance on AIB''s lending practices, and to prevent net new lending by AIB until such time as a new international management team is appointed. To help minimize the fiscal cost of its intervention in AIB, the government should consider re-privatizing AIB by hiring an investment bank to market the government’s share globally. The government should also enforce collections on the loans that it purchased from AIB.  

Founded in 1992, Agroinvestbonk, with headquarters in Dushanbe, has main branches in Khorog, Khujand, Kulob and Qurghon Teppa and more than 60 other branches across the republic.