In short, the problem can be summed up in two words: real-estate speculation. In that there is a huge amount of it going on, and it's entirely unchecked. In any major city in the country, you'll see half-built high rises. Not half-build as in "under construction," but as in they built half the thing and the money they got from the Bank ran out. No cranes, no construction crews, no nothing - just half a building.

That in itself won't kill the banking system, but how all those half-buildings are financed will. Currently, if a bank has a loan out on a building being built on spec, it automatically gets backed by the Government (due to some odd legal ways their banking system is set up). Hence, banks have no reason to be selective in their loans. Most banks will lend anyone with some blueprints a few million dollars at a low rate, because they have no potential to loose - worst case is that they get the principal back from the government, and they break even.

In many cases, it becomes like the old "coffin ships" before loading limits were imposed - someone will come up with a building plan, get a huge loan for it, and then only get halfway through building the thing. Of course, the companies that built (and got paid for) the half-building will be owned by the same developer, and probably by the bank (both the officers of the bank and the bank itself). The bank then goes to the Central Bank, and gets its principal back - if you will, an institutional kickback.

Problem comes when the Central Bank is forced to stop covering these loans. The banks will stop issuing new loans to cover new buildings at the rate that developers are used to in the country (because they'll need to take risk into account), and they'll push hard to renegotiate their existing ones (again, for risk). Inevitably, 2/3rds of the loans they have outstanding will default (like I said, that's the norm in commercial loans there), and the lack of coverage from the Government will kill at least half the Banks going, with the rest taking huge losses.

All in all, not a good situation. And it happens to be one more reason they're resisting calls for a flotation. Ignoring the ramifications of the currency market (which I don't know enough about, and which won't really effect real-estate development due to mostly domestic sourcing), opening up their currency will be a step towards opening up their banking system - which they simply cannot afford to do without some radical changes in commercial development practices, which would in turn slow down the economy, which the screws up their currency valuation, etc.

Long story short - it's a long ways off.