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Uzbekistan sets new requirements for local banks

Business Materials 16 September 2017 19:56 (UTC +04:00)

Tashkent, Uzbekistan, Sept. 15

By Demir Azizov– Trend:

Minimum authorized capital for each newly established commercial bank in Uzbekistan will be 100 billion soums (8,092.13 soums = 1$ and 9,718.65 soums = 1 euro on Sept. 15) starting from Oct. 1, 2017.

According to the decree of the country’s President Shavkat Mirziyoyev "On measures to further develop and improve stability of Uzbek banking system" obtained by Trend, the banks operating in Uzbekistan must bring their authorized capital, if necessary, to the established requirements before Jan. 1, 2019.

So far, the minimum volume of the authorized capital of each Uzbek bank has been 10 million euros in soum equivalent for joint-stock banks and 5 million euros in soum equivalent for private banks, and individuals’ funds must account for not less than 50 percent in the authorized capital of these banks, according to the legislation.

The decree said that the results of stress tests, held by the Uzbek Central Bank regarding commercial banks to check their stability and adaptability in the conditions of liberalization of the domestic foreign exchange market, revealed a number of shortcomings that have a negative impact on the financial state and the foreign exchange position of banks, and the consequences of this impact negatively affect the liquidity of banks.

On Sept. 5, the Central Bank of Uzbekistan devalued the national currency – soum – by almost two times, setting the official exchange rate of US dollar at 8,100 soums/USD compared to 4,210.35 soums/USD on Sept. 4.

Simultaneously, restrictions were lifted for legal entities and individuals to convert the national currency.

Individuals – residents of Uzbekistan – received the right to freely sell foreign currency in exchange offices and buy it in conversion departments of banks with transferring the purchased funds to international payment cards and using them abroad without any restrictions.

This also applies to individual entrepreneurs engaged in the import of consumer goods.

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