According to statistics, the amount of NPLs drastically surged since October 208. The Bank of Mongolia (BoM) explains that the increase was driven by the Asset Quality Review conducted on commercial banks under the Extended Fund Facility program of the International Monetary Fund. As of 2018, NPLs account for 10.4 percent of gross loans, which is about 8 percentage point higher than the allowed level.

Analysts highlighted the fact that the percentage of NPL to total gross loans entering double-digits means is an alarming signal for the financial system. The BoM highlighted that the NPL constantly grew since 2013, causing reduced credit grants, deepening economic difficulties, and obstructing loan repayments. Thus, the Financial Stability Council of the BoM has ratified a strategic paper on reducing NPLs.

Within the frame, the bank announced to make efforts in optimizing the court-backed forced settlement of NPLs, enhance the efficiency of Law on Bankruptcy, and create a legal environment for non-performing assets market.

Furthermore, the BoM has stated to establish a specialized institution for asset management on its Monetary Policy Guidelines, submitting a bill on Asset Management Firm within its frames. The bill is expected to be discussed this year..