Today on December 22, 2020, memders of the State Great Hural (Parliament), MP Kh.Bulgantuya and MP J.Sukhbaatar submitted a bill on amendments to the Law on Prevention and Response to the COVID-19 Pandemic and Reducing the Adverse Effects on Society and Economy (COVID-19 Mitigation Law) to G.Zandanshatar, Speaker of the Parliament of Mongolia.
Due to the ongoing pandemic COVID-19, the borrowers’ business activities have stopped, their incomes have been cut off that unables to repay their loans, and their collaterals are devalued and depreciated that are real risk faces today, officials say.
Today, lenders' (pawnshop) activities and loan contract relations are regulated under Civil Code Article 286 and MNS 5274:2017 standard issued by National Council for Standardization, which are not integrated subject to the state control and regulations. Therefore, it is necessary to pass a law on loan contract relations, say law initiators.
The bill cites to regulate the following relations:
- To calculate the interest rate of the loan contract concluded between the Lender and the Borrower for the period from November 12, 2020 to July 1, 2021 at 3 percent;
- During the period of the loan contract concluded between the Lender and the Borrower from November 12, 2020 to July 1, 2021, other increased interest, fees and charges shall not be charged;
- During the period of the loan contract concluded between the Lender and the Borrower from November 12, 2020 to July 1, 2021, it is prohibited to ensure obligation fulfillment by mortgaged property and if used, consider it a violation in accordance with the Law on Violations;
- To accomplish measures obliged by the Authority for Fair Competition and Consumer Protection;
Also, it was attached the Lender’s measures and obligations to implement.
Press and Public Relations Department of the State Great Hural