Bill on private banks discussed in Uzbek parliament

Business Materials 12 September 2012 17:47 (UTC +04:00)

Uzbekistan, Tashkent, Sept. 12 / Trend D. Azizov /

The meetings of factions of political parties and the MPs' group of the Uzbek Ecological Movement were held in the Legislative Chamber of the Oliy Majlis (a lower house of the parliament).
Uzbek bill on "Private banking, financial institutions and guarantees of their activity" was preliminary considered in the first reading, the Legislative Chamber said today.

The purpose of the bill is to create legal basis for the banks' and financial institutions' functioning on the basis of private property, to expand and improve banking and other financial services and to create conditions for the further development of modern market infrastructure.

In particular, a procedure of forming private banks and financial institutions, the rights and obligations, the warranty, the prohibition on state bodies' illegal interference in their activities are fixed in a legislative manner.

According to the press service, the bill defines such rules and regulations as the property foundations of the private banks' and financial institutions' activity, taxation, property rights guarantees, warranties of nationalization, confiscation, requisition, self-determination of tariffs for services, guarantees of free using the income.

According to the press-service, the factions unanimously approved the presented bill in the first reading after discussions. The bill will be submitted for discussing at the plenary session of the Legislative Chamber.

Up to now, the activity of Uzbek private banks has been regulated by the law on "Banks and banking activity" and the presidential decree on "Measures of stimulating private commercial banks", adopted in 1997.

The presidential decree stipulates that along with the existing commercial banks, private commercial banks can be formed, in which the share of founders - physical entities hits at least 50 percent of the share capital, but the rest part is owned by non-state legal entities. The citizens of the Republic may contribute to the authorized capital of private commercial banks without providing the income statement.

The Uzbek banking system is currently represented by 30 banks including three state, five with the participation of foreign capital, 12 joint-stocks and 10 private.

In 2011, the total assets of commercial banks increased by 32.4 per cent, compared to the totals of 2010 and amounted to 27.45 trillion soums.

The total loan portfolio of banks in the republic increased last year by 35.6 per cent - to 15.65 trillion soums and the aggregate bank capital increased during the year by 30 per cent - up to 5.334 trillion soums as of 2011.

The official exchange rate is 1.930.25 soums to $1 on Sept. 121.