Reforms of the banking system in Uzbekistan

It is hard not to notice reforms that are currently
being implemented in the banking and financial system, which include the
introduction of modern market mechanisms, improving the culture of banking
services, etc. The activities and efforts of the state, banks, and international
financial institutions to privatize banks are particularly important today. In
addition, it is worth noting the increasing role of IT technology and the
introduction of new solutions for providing banking services. The head of state
Sh. M. Mirziyoyev has repeatedly spoken and mentioned in his speeches about the
need for reforms of Uzbek banking system. It is known that international
financial institutions already work closely with local banks and advise on
privatization issues.

On May 12, 2020, an important decree Of the President of the Republic of Uzbekistan On the strategy of reforming the banking system of the Republic of Uzbekistan for 2020-2025 was published, which defines the need to reform banks by improving the efficiency of the banking system and creating equal competitive conditions in the financial market, improving corporate governance and attracting managers with international practical experience, and most importantly, reducing the state’s share in banks through a comprehensive transformation of commercial banks with a state share.


  • sector restructuring —
    transformation and privatization of banks;
  • improving the legal
    framework, introduction of standards of the Basel Committee on banking
    supervision, international financial reporting standards and others;
  • expanding the range and
    improving the quality of services by improving customer focus, lending
    mechanisms and business process automation;
  • professional
    development of personnel.

The decree also approved the strategy for reforming
the banking system of the Republic of Uzbekistan for 2020-2025, the “road
map” for reforming the banking system of the Republic of Uzbekistan.
Targets were set, such as:

  • increasing the share of banks ‘assets without the state’s share in the
    total assets of the banking system from the current 15 percent to 60 percent by
  • increasing the share of banks’ liabilities to the private sector in the
    total liabilities from the current 28 percent to 70 percent by the end of 2025.

It is planned to gradually privatize the state share in
Ipoteka Bank, Uzpromstroybank, Asaka, Alokabank, Kishlok Kurilish Bank and Turonbank,
but the state share in National Bank for foreign economic activity, Agrobank
and Mikrokreditbank remain. Shares will be sold to strategic partners who have
extensive experience and who can bring new solutions and positively effect on

A project office is being created under the Ministry
of Finance of the Republic of Uzbekistan, which will deal with the
transformation and privatization of commercial banks with a state share, the
involvement of international consultants, negotiations and agreements with
international financial institutions.

The decree also prohibited heads of ministries,
departments and local government bodies from interfering in the activities of
banks, including managing business risks related to the formation of banks ‘
loan portfolios and assets, which sometimes occurred in practice. In accordance
with the decree, the Prosecutor General’s office of the Republic of Uzbekistan
was instructed to strengthen supervision over the implementation of legislation
on banks and banking activities in order to prevent administrative interference
in the activities of banks by state bodies.


What do you need to know about e-money rules in Uzbekistan?

In accordance with the Law on Payments and PaymentSystems, specialized rules that establish a mechanism of
issuing, selling, acquiring, using and withdrawal fromcirculation of e-money have been developed and approved.
What do you need to know?

What is e-money?
E-money – unconditional and irrevocable monetary obligations of the issuer of e-money, stored in electronic form
and accepted as a means of payment in the e-money system.

The subjects of the e-money system
The issuer, operator, agent of the e-money system, the owner of e-money, as well as banks, payment organizations,
individual entrepreneurs and (or) legal entities that have concluded an agreement with the issuer.

The e-money issuer (banks) has to:
Send a notification to the Central Bank (the name of the operator (brand) and license number issued to
the operator, information about the issuer, the settlement bank of the operator and agents of the
e-money system) about the beginning of the issuance and sale of e-money are indicated in the notification. Submit documents to the Central Bank (documents confirming the issuer’s position in the e-money system (agreement with the operator) in the absence of the issuer and in the absence of a trademark belonging to the e-money system) samples of contracts concluded with the e-money system entities).

The timing
Submitted to Central Bank documents has to be considered within ten days and the relevant information on the
date of the e-money issue will be entered into the e-money system registry, indicated on the official website
of the Central Bank.

The issuer and the operator are liable to the owner of e-money for damage caused to the owner of e-money as a
result of unauthorized access and (or) unauthorized use of e-money, as well as for errors or interruptions in
the work of the issuer software of e-money or in the work of e-money.

The sale of e-money to individuals or the purchase of e-money from individuals is carried out by the agent of the
e-money system on the basis of an agreement concluded with the issuer or operator, this agreement defines the
rights and obligations of the parties, the procedure and conditions for the sale and acquisition of e-money. E-money
is sold to an individual and an agent of the e-money system through an e-money system, which is purchased from the
issuer for an e-wallet, which is formed for each e-money holder. On the basis of a contract with the issuer or operator, an agent of the e-money system can purchase e-money from an individual who owns an e-wallet in the e-money system at the face value of e-money in order to sell or refund e-money to individuals who own an electronic wallet in the e-money system. E-money issued by the issuer in the territory of the Republic of Uzbekistan should be nominal only in national currency.

Confirmation document
A special receipt in paper or electronic form must be presented to confirm the fact that the Issuer sold electronic
money to the owner of electronic money when issuing it.

The receipt must have the following details:
• name of issuer and operator;
• date and time of operation;
• sequence number of the operation;
• the amount of e-money issued;
• identification code of an e-wallet owned by the owner of e-money;
• the amount of commission (if it is specified in the contract for the issuance, use and reimbursement of e-money).

E-money can be used to purchase goods and services from individual entrepreneurs and legal entities that are subjects of
e-money system. Only e-money issued in the territory of the Republic of Uzbekistan can be accepted as payment.
The operator provides the issuer with the opportunity to receive information about transactions and operations
carried out by the owner of e-money online.

E-Wallet block
E-wallet can be blocked by the operator or issuer in the following cases:
• upon receipt of a notification from the owner of e-money about the loss, theft or unauthorized use of the
electronic wallet;
• in case of violation of the terms of the agreement on the issue, use and reimbursement of e-money by the
owner of e-money;
• in other cases, stipulated by the contract.

Security and Risk Management
The procedures for ensuring information security and protection used in the e-money system should ensure
continuous protection of information at all stages of circulation, including:
• determination of the rights of the owner of e-money to conduct transactions with e-money;
• find out the reasons for the incidents detected during e-money transactions;
• protection against unauthorized use of information and ensuring its integrity.
Risk management in the system should be based on the availability of:
• procedures for internal control and audit of the system, maintaining information about the functioning of
the system and transactions;
• an information system that provides timely processing, accounting and storage of information on each transaction,
protection and storage of data in the system;
The withdrawal from circulation

E-money presented by their owner is repaid by the issuing bank by exchange for cash or transfer of non-cash money to
the owner’s bank account. After repayment, e-money is withdrawn from circulation.