DUSHANBE, May 12, 2016, Asia-Plus /Payrav Chorshanbiyev/ – An article Tajikistan''s Banking Sector Slides Closer to Crisis” that was posted on bne IntelliNews’ website on May 11 notes that Tajikistan’s second largest private bank Tojik Sodirot Bonk (TSB) is seeking help from the European Bank for Reconstruction and Development (EBRD) to avert a potential liquidity crisis.

The bank, which has assets of TJS3.8bn ($483mn), is discussing the capital injection on the fringes of the annual EBRD Annual Meeting in London this week, according to the article.

TSB has reportedly invited the EBRD to acquire a 50% equity stake in the bank, which currently has a total equity of $80 million.

"We have already met with EBRD President Sir Suma Chakrabarti, and he has expressed the bank''s intention to help,” TSB top manager Tojiddin Pirzoda was quoted as saying.  “We have another meeting with them [on May 12], but it remains to be seen if we can meet the EBRD''s conditions.  We will also seek other equity investors in addition to EBRD, such as the IFC.  We want to attract as much liquidity as possible to pay our liabilities and our depositors,” Pirzoda told bne Intellinews in an interview at the EBRD Annual Meeting.

The article says Tajikistan’s banks have been hit hard by the country’s economic problems, much of them linked to declining exports and remittances with Russia, which have left many of the country’s businesses and individuals unable to repay their loans to banks and microfinance institutions. 

“Due to worsened macro conditions, performance of many players [has] deteriorated, which is mainly reflected in the growth of impaired loans, reduced profits and capital erosion,” EBRD Director for Financial Institutions in Russia and Central Asia George Orlov told bne IntelliNews .

We will recall that panic was spreading among customers at TSB in March.  Customers were signing up to waiting lists in their thousands to withdraw whatever money they could.

The National Bank of Tajikistan (NBT) announced in March it was in talks with the European Bank for Reconstruction and Development (EBRD) over the state of the banking system. Particular attention was devoted to the role of banks deemed crucial to Tajikistan’s economy, including TSB.  

On March 14, TSB issued a statement that attributed interruptions in its services to a switchover in its money-processing system.  “Short-term disruptions in the functioning of bank cards are possible. We apologize for the inconvenience,” the statement said.

TSB was established in December 1990 as the Tajik branch of the Vnesh Econom Bank of the former Soviet Union, and it initially specialized in trade and import-export banking.  Later this branch was reorganized into a Joint-Stock Commercial Bank “Tajikvnesheconombank”.  In June 1999 the bank was renamed and registered as Tojik Sodirot Bonk or TSB.

Headquartered in Dushanbe, TSB has 12 branches in the main cities of Tajikistan and covering all regions of the country.