DUSHANBE: Tajikistan’s government said on Wednesday it would borrow $490 million from the central bank to bail out four local lenders amid a widening banking crisis.
The money will go to Agroinvestbank and Tojiksodirotbank, the country’s two biggest lenders, as well as to two smaller banks, Tajprombank and Fononbank, Finance Minister Abdusalom Kurboniyon told parliament.
Under the plan, the government will issue special notes and hand them to banks which will pledge their assets in return. Banks will then be able to sell the notes to the central bank, he said.
The government will also set up supervisory boards at all four banks whose customers this year had trouble withdrawing money from their accounts.
The bailout amount represents more than a fifth of Tajikistan’s state budget. The finance minister did not say how the government planned to finance the additional spending.
Although the former Soviet republic does not export oil, its economy has taken a hit from the drop in energy prices because many Tajiks work in Russia to provide for their families.
The share of bad loans in Tajik banks’ consolidated loan book surged to 58.7 percent as of Sept.30 from 37.8 percent a year earlier, according to central bank data.