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Report: Tajikistan to rescue 4 local lenders

Tajikistan's government will borrow $490 million from the National Bank of the Republic of Tajikistan to provide financial assistance for four local lenders affected by the central Asian country's banking crisis, Reuters reported Dec. 21, citing Finance Minister Abdusalom Kurboniyon.

The funding will be provided to Tajikistan's two largest lenders, OJSC Agroinvestbank and OJSC Tojiksodirotbank, as well as the smaller Tajprombank and Fononbank, according to the report.

Under the planned bailout, the government will issue special notes for banks, which will be secured with their assets. The lenders will be able to sell the notes to the central bank. The government also intends to set up supervisory boards at the four lenders.

The value of the bailout accounts for more than 20% of Tajikistan's state budget, the newswire noted, adding that Kurboniyon did not specify how the government planned to finance the spending.

The share of bad loans in the Tajik banking sector amounted to 58.7% of the aggregated loan portfolio as of Sept. 30, an increase from 37.8% a year earlier, Reuters noted, citing central bank data.