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 of Republic of Uzbekistan on Payments and Payment Systems, specialized rules that establish a mechanism of issuing, selling, acquiring, using and withdrawal from circulation 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.


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Isolation of justice

Uzbekistan has found itself in an unprecedented situation. The government has to limit some of the human rights in people’s interest. This is because the right to life conflicts with other fundamental rights. These are freedom of assembly and freedom of movement.

We can justify such measures with one of the Roman Law postulates. It says one’s rights end where the rights of another begin. Of course, it is necessary to implement this within the framework of the law and the norms of international law recognized and ratified by the country, by legal mechanisms that allow such restriction to be legally enforced.  However, this issue is not the subject of this article.

For example, the right to a fair trial and defense  is an inalienable right of everyone and a principle of international law that is enshrined in one of the fundamental acts – the International Covenant on Civil and Political Rights from 1966. Article 2 of of the Covenant specifically states that each member state to the Covenant undertakes:

(a) To ensure that any person whose rights or freedoms as herein recognized are violated shall have an effective remedy, notwithstanding that the violation has been committed by persons acting in an official capacity;

(b) To ensure that any person claiming such a remedy shall have his right thereto determined by competent judicial, administrative or legislative authorities, or by any other competent authority provided for by the legal system of the State, and to develop the possibilities of judicial remedy;

(c) To ensure that the competent authorities shall enforce such remedies when granted.

The fundamental law of our country also guarantees legal protection. Thus, Article 22 of the Constitution of the Republic of Uzbekistan guarantees legal protection to its citizens, Article 26 establishes the presumption of innocence and guarantees all possibilities for the protection of a person, Article 116 establishes the right to defense  for the accused, and professional legal assistance is guaranteed at any stage of the investigation and proceedings.

However, since the introduction of restrictive measures on movement matters of the administration of justice arose a big question  without the possibility of the country’s attorneys participating in these processes. In particular, according to the Decision of the Republican Special Commission (based on media reports and various information channels) from March 29, 2020 the movement of personal vehicles was limited from March 30.

The document, along with the rest, made some exceptions for certain category of car owners who could obtain a special permit to move around the city.  However, the attorneys were not included in that category, which derived the opportunity to provide qualified legal assistance to suspects/accused, principals and legal entities, as well as to participate in trials and other procedural actions.

In addition, in accordance with amendments and additions to the aforementioned list dated April 8, employees of the State Security Service, the Ministry of Internal Affairs, and the Department for Combating Currency Economic Crimes under the General’s Prosecutor Office were allowed to use personal and official  just by  providing their official badge. 

Also, the right to use an state car  was granted to the National Guard, the State Customs Committee, court bodies and prosecutors.

All those state bodies involved in the administration of justice got the opportunity to fulfill their public tasks and perform legally significant actions, while the country’s lawyers and attorneys were completely deprived of this opportunity.

The Ministry of Justice sent a letter in response to a written request from the Chamber of Lawyers to include lawyers in the above list, which indicated that lawyers, if necessary, will be provided with transport (by bodies of justice, courts and investigations), but this causes doubts regarding the independence of attorneys and the adversarial process.

For example, in the Russian Federation, the Ministry of Justice, referring to the Constitution, sent a letter to the heads of the executive branch to allow free movement of attorneys in order to perform their obligations of providing of legal assistance. Also, on the channel maintained by the Ministry of Justice of Republic of Uzbekistan (“Legal Information”), it was reported that stickers were provided to the heads of the Chamber of Lawyers and their territorial divisions, but it is not clear how providing stickers to these individuals will help the attorneys themselves in resolving the cases of their clients.

We can observe how statistics are kept every day and figures are given that reflect the number of cases and individuals who have violated the quarantine and self-isolation regime. Some of them are called to responsibility, and some are punished up to administrative arrest. However, the legitimacy of all these actions without the participation of attorneys is doubtful (and if the legal assistance was provided by law enforcement agencies, how much their “assistance” was objective and can it be considered qualified and in the interests of the defendant with the above).

the suspects/defendants of their constitutional guaranteed right to receive professional legal assistance and it is not only about those who were held accountable in view of the current situation, but also those who are in prison whose investigation is still “up” (detention and elsewhere insulation), where attorneys do not have access. 

The restriction of the right of freedom to movement came into conflict with the constitutional right to a fair trial, which should be allowed at any cost if we are or at least strive to build a healthy, democratic, legal society. The emerging epidemiological situation should not be a reason to reject the course taken by the Strategy actions for the further development of the Republic of Uzbekistan 2017-2021, in which one of the main areas is ensuring the rule of law and further reforming the judicial system. We should emphasize that this area also includes a full implementation of the adversarial principle in the trial, the improvement of the provision of legal aid and legal services.

The rule of law is particularly important at such difficult times as today, which was also emphasized by Tedros Adhanom Gebraysus, Director General of the World Health Organization during the St. Petersburg International Legal Forum held online on April 10, 2020.