Reformation of Banking Sector in Uzbekistan
Uzbekistan announced that the Government wants
to sell they 40% of shares of the largest bank in Uzbekistan.
A bank privatization bureau has been organizing
tenders for a foreign general adviser and four investment banks'
consultants for making research and saleog these banks. The Government
wants a strategic investor who is well represented in London, Frankfurt,
NY and Tokyo.
International experts are not jejune about the
prospects of privatization until the economy is more securely opened
up, currency convertibility is instituted, and the Government truly
begins to relax its hold on the economy. Other large-scale privatization
projects to encourage foreign investment in major sectors of the
economy, such as the Almalyk Mining and Metallurgical Complex or
the telecommunications sector, have failed in the past year. Time
will tell whether or not the Government has learned its lesson.
Reformation of Banking Sector in Uzbekistan
Program of Reforming of banking system in Uzbekistan
The present Program is developed in the performance
of the orders of a study of the Cabinet of Ministers on January
15, 1999 "About measures on the further reforming of bank system"
and on June 10, 1999 "About measures on realization of the
basic situations contained in the report of the President of the
Republic of Uzbekistan on XIV session of the Cabinet of Ministers".
The program of reforming of banking system is a component of realization
of market reforms policy in Uzbekistan.
The purposes and directions of the Program
which reforming the bank system.
The strategic purpose of the Program is the formation
of bank system adequate to the market economy, activization of an
intermediary role of banks in the financial market, maintenance
of financial independence of banks, approach of their activity to
the world bank practice, and, at the end, achievement of a high
level of competitiveness of banks in the internal and international
financial markets.
The basic directions of the Program for
achievement of the specified purposes are:
- Deepening of processes of a privatization and nationalization
of banks, further incorporating of commercial banks, strengthening
of the system of corporate management through increasing of a
role of the shareholders in a management of banks;
- Institutional development of bank system, increasing the financial
stability of banks at the expense of improvement of quality of
their actives, including currency, further perfection of bank
business and expansion of kinds of rendered bank services;
- Increase of a role of commercial banks on investment processes
and improvement of the access mechanism of enterprise structures
of all patterns of ownership to credit resources, including, on
a line of the international financial organizations;
- The further perfection of a informational-computer infrastructure
of an interbank data network according to the modern international
standards with the purpose of increasing the efficiency of banks
activity, maintenance of conditions for integration with the international
financial markets;
- Formation of management of market system by banks, based on
principles of corporate management, strengthening of banks by
the highly skilled experts ready to work in market conditions,
perfection of methods of preparation and retraining of the bank
staff ;
- The further development system of regulation of the bank's
activity and bank supervision with the purpose of maintenance
of high trust of the population to bank system, protection of
interests of the investors, and creditors;
- Further development of cooperation with the international financial
institutions in the field of perfection of bank business and methods
of bank supervision.
Privatization and Nationalization of Commercial Banks
Nowadays in Uzbekistan there are 35 commercial
banks with more than 800 branches, in 5 of them the share of the
state in the authorized capital exceeds 25 percent. The basic founders
of large joint-stock commercial banks are the enterprises, association,
corporations and concerns, but the basic control package of which
a share of the state.
In this connection, exclusive importance there is an expansion of
participation of the population, individual businessmen, small and
medium sized business enterprises, and also foreign investors in
the capitals of commercial banks. It will allow to involve in management
of banks, fundamental interests of individual proprietor in the
market economy.
The program provides step by step privatization and nationalization
of banks by the way of:
Stock sale of 40 percents of shares of National Bank for Foreign
Economic Activity and 50 % of shares of Asaka Bank to the foreign
investors.
Reduction of a share of the state to 7 % in the authorized capitals
of:
Uzuyjoyjamgarma bank
Tadbirkor bank
Zamin bank
by the sale of state shares to the private and foreign investors
during 2000 - 2002;
Reduction up to 7 % of indirect participation of the state in the
capitals of banks by decreasing of the share of enterprises - shareholders
who controlled by the state, realization of their shares to the
private and foreign investors within 2000-2001 years.
With the purpose of attraction of additional means in the authorized
capitals of commercial banks and elimination of the possibilities
of conflicts of interests and systematic risk in the banking sector.
The program provides:
The termination of cross mutual possession of the shares between
banks - shareholders from January 1, 2000, and realization by commercial
banks of packages, belonging to them, of the shares in the authorized
capitals of working banks till January 1, 2001, and founders - shareholders
till July 1, 2001;
Increasing of the authorized capital of commercial banks by additional
issuing and realization of shares, first of all, to foreign investors,
shareholders and enterprise structures;
For activation of process of a privatization in bank sphere, maintenance
of realization and increasing the attractiveness of the shares of
commercial banks, this program includes the following measures:
Perfection of the mechanism of realization of the shares of banks
in the primary and secondary markets of securities through Stock
Exchanges, including foreign;
Perfection about the taxation of commercial banks with the purpose
of maintenance the equality of the rights of the shareholders of
bank with the right of the shareholders of other economic communities
(translation of banks from a category of the tax bearers from the
income in a category of the tax bearers from the profit).
Institutional development of bank system and further perfection
of bank business
Nowadays on shares of the state and specialized
banks it is necessary more than 80 percents(interests) of actives
of bank system. The not equal concentration of bank's actives in
separate branches of economy negatively influences on development
of small, medium and private businesses, strengthening of a competition
between banks in the financial market, diversification of risky
actives of banks, and also de monopolization of bank activity.
With the purposes of diversification of risky actives
of banks, maintenance of their independence in realization of bank
activity, strengthening of a competition in the financial market,
development of market principles in bank financing, and also assistance
to development of small, medium and private businesses.
The program provides:
Universialization and commercialization of the
working specialized (branch) commercial banks by expansion of quantity
of branches, served by specialized banks, kinds of the managing
subjects and number of made operations;
Acceptance of measures providing approach of activity of banks to
the world banking practices. During 2000-2002 years the transfer
of control functions which are carried out by banks to the appropriate
state bodies will be carried out step by step and also the measures
on increase of the responsibility of the clients of banks for operations,
made by them will be accepted;
The existing actives of banks belonging to the category of problem,
will be restructured within 2000-2001 years with assistance of Agency
on re-structuring actives of banks;
The measures on increase of a role and importance of private banks
in development of small, medium and private businesses will be accepted.
For this purpose the credit lines of the international financial
organizations will be used actively, whose quantity and volume will
increase.
With the purpose of further development of bank's businesses and
partner relations between banks and their clients, and also elimination
of the negative factors caused by existence of a difference between
cash and non-cash forms of accounts:
Since 2000 the spectrum of credit operations of
banks in the retail market, and kinds of consumer, hypothecate credits
will extend;
The realization of the program is connected with development of
savings business in commercial banks, introduction of floppy percentage
policy on deposits on the basis of a supply and demand, and also
introduction of safety operations on a storage of money resources,
securities and property of clients with the purpose of strengthening
of the deposit base of banks, attraction of free means of the population
on a business turnover;
During the period 2000-2005 will be accepted measures on strengthening
capital base of National bank and changing of the size of its authorized
capital up to 10 mlrd. soum for maintenance of protection of interests
of the small investors of the given bank;
In 2000 and further, the internal credit and percentage policies
of commercial banks will be advanced by Advice of banks for increasing
the attractability of credits and interests on them, expansion of
access of the managing subjects and population to credit resources
of banks;
At Association of banks of Uzbekistan in 2000 for maintenance the
information of banks on a credit history of the potential borrowers
will create a Credit-information bureau;
For effective utilization of existing market tool of maintenance
of credit risk as a pledge in 2000 by the Ministry of Justice, Central
Bank and Association of banks will be prepared and are brought on
consideration of the appropriate bodies of the offer on additions
to pledge to the legislation;
During 2000-2001 will receive the further development on legislative
and normative base for increasing of leasing volumes, export-import
transactions and venturing financing;
The Central Bank together with the Ministry of Finance and State
Tax Committee will accept measures on the further development of
system of accounts with unification of using of cash and non-cash
forms with the purposes of involving in a bank's turnover of additional
financial resources and increasing of trustiness of banking sector;
Since 2000 for increasing the stability of resource base and level
of capitalization of commercial banks, the modern market tools of
long-term liabilities of banks will be involved as hypothetical
bonds, depository, savings certificates and other securities
Increasing of a role of commercial banks as active participants
of investment processes
Nowadays by basic participants of investment processes
stays large Commercial Banks. It concerns and to development of
credit lines of the international financial organizations for development
of small and medium business.
For increasing of an intermediary role of all banks in successful
realization of investment program of Government, duly development
of foreign credit lines and non-budget resource funds for development
of small and medium businesses, the present Program provides:
- Formation, of the combined financing mechanism and tools and
crediting of the large investment projects;
- The further improvement of the mechanism of examination and
rating of the investment projects of enterprises
Development of micro-crediting for SME
Now the market of micro-credits to the individual
businessmen, small and micro enterprises completely belongs tobanks,
that results in a insufficient level of a competition in this market.
For strengthening a competition in the micro-crediting market,
the Program provides:
- Development of the forms, alternative to the bank crediting,
of financing and crediting of small and medium enterprises by
creation of credit unions with assistance of Asian Development
Bank and other international financial institutions;
- Development on a constant basis of the mechanism of micro-crediting
of the individual businessmen, small and micro-enterprises with
the purpose of support of development of small and medium enterprionership.
Development of banking information systems and technologies
During years of independence of the republic, in banking system,
the electronic payment system providing on time translation of money
resources of the clients was generated. However, the tasks facing
to the banking system within the coming years, require its further
improvement and development.
With the purposes of the further improvement of an interbank informational-computer
infrastructure.
The Program is stipulated:
Perfection of informational - computer infrastructure of an interbank
data network of the Central bank according to advanced directions
of the development of systems of accounts. For this purpose, during
2000, the conceptual design of payment system will be developed
within the framework of the project of the World Bank;
Development of an interbank data network of the Central bank by
transformation of it during 2000-2001 in a global republican network
of telecommunications providing informational interaction of banks
and other financial structures;
The further improvement of work of email by improvement of the
standards and rules of information interchange in a data network;
Creation of a national system of the clearing settlements on the
basis of plastic cards.
Perfection of bank management and methods of preparation
of the bank staff
With the purposes of the further perfection of
bank management and methods of preparation of the bank staff the
Program provides:
Strengthening of a role of internal auditing services in commercial
banks, maintenance of their independence from the executive body
and maintenance of services of internal audit by the executive bodies
of banks by the authentic information about the financial status
of bank for duly revealing and liquidation of problems in their
activity;
For maintenance of conditions for preparation of the bank staff
responding the modern requirements of the market economy will be
arranged further on strengthening material base of bank educational
establishments and their library fund by maintenance of modern computer
engineering, domestic and foreign literature on bank business;
With the same purpose, in 2000-2002 the special attention should
turn to the process of creation of a new generation of the tutorials,
manuals and methodological literature, and also unified educational
programs for high schools, bank colleges and classes, for training
the bank experts in conformity with advanced world banking practice;
The further perfection of the system of market methods of motivation
of work of the bank workers by stimulation and maintenance of professional
growth, development of a social infrastructure of banks, and also
systems of the non-material forms of encouragement.
Strengthening and Development of bank supervision
In conformity with accepted laws regulating bank activity, it was
created an effective structure of bank supervision in the Central
bank behind activity of commercial banks responding to the international
standards and requirements Bazel committee on bank supervision.
The new plan of accounts of commercial banks appropriate to the
International standards of the financial reporting and providing
a transparency of activity of banks is introduced into action. Practice
of realization of external auditing of commercial banks by international
recognized auditing companies also is introduced.
For strengthening of a role of the Central bank on realization
of supervision behind activity of commercial banks, maintenance
of effectiveness of bank supervision in promptly developing market
conditions, and the Program provides:
Constant perfection of methods of remote and inspection supervision
behind bank risks according to the requirements of Bazel committee
on bank supervision;
The development of the standards of disclosing of the information
of commercial banks for the external users by perfection of book
keeping and financial reporting of banks according to the international
standards of the financial reporting.
Development of cooperation with the international financial institutions
in the field of perfection of bank business and methods of bank
supervision
During years of independence of the republic due to fruitful cooperation
with the international financial institutions the legislative base
and market focused two-level banking system responding to the international
standards was created.
With the purpose of the further perfection of bank business and
methods of bank supervision the Program provides a deepening of
cooperation with the international financial institutions in the
following directions:
A privatization and nationalization of commercial banks;
Improvement of bank strategy and planning, management of credit
risks and liquidity of bank, book keeping, according to the international
standards;
Improvement inside and interbank payment system, control system
of information;
Formation of standardized-legal base on creation of non- bank credit
organizations as credit cooperative societies;
Attraction of the foreign investments and credit lines for development
of small, medium and private enterprises through commercial bank
Expected results from the Program of Reformation of Banking
Sector
The basic directions of the Program of reforming
of banking system opens a priority directions of further deepening
of national financial-credit system and basing on principles of
a coordination of the Program with general economic transformations
of the country, step by step realization of banking system, maintenance
of stability of a national financial system, free competition in
the financial markets.
The realization of the basic directions of the
Program of reforming of banking system will ensure:
-
Optimization of structure of the property
of bank system for achievement of equation of functioning of
state and not state bank institutes;
-
A deepening of demonopolization of banking
sector with orientation of development of banking system on
increasing of competitiveness level;
-
Perfection of a credit policy of banks, providing
effective management with actives and passives in according
to the market and credit risk; development of the system of
controlling of internal crediting in commercial banks; a direction
of credit resources on stimulation of consumer and investment
demand;
-
Development of depositary policy of banks,
which provides the activation of the work of banks on attraction
of money resources of the legal and physical persons in the
deposits (including currency means) by introduction and perfection
of appeal of bank tools;
-
Perfection of investment policy of banks
directed on increasing of a role of commercial banks as investment
intermediaries;
-
Expansion of scales of crediting of priority
branches of a real sector;
-
Development of financial opportunities,and
private sector of economy, and also a small and medium business,
introduction of a new forms and methods of participation of
banks in financing the investment projects and programs;
-
Harmonization of relations between commercial
banks and their clients on the basis of expansion and diversification
of bank services, introduction of modern bank products and service
technologies of clients of banks;
-
Institutional strengthening of corporate
management in commercial banks responding to the modern international
standards and rules of law providing with increasing of quality
and efficiency in management with the current and strategic
activity of bank, promoting to increase of stability and trustworthiness
of the functioning of bank;
-
Increasing of a transparency of the market
of banking services, and also activity of commercial banks for
their clients, investors and partners;
-
Perfection of system of state and internal
economic regulation of activity of banks including monetary
policy, state credit, fiscal policy, internal control and auditing,
and external audit;
-
Realization of consecutive integration of
domestic commercial banks in world bank system which provides
of non-admission of negative risky system for a financial system
of the country in conditions of globalization of the world economy;
-
Perfection of legal base of financial sector;
-
The development of activity of not bank financial
institutions, is especial in a part accumulate of internal investment
resources;
-
Creation of a national network of banks,
which would be well adjustable on credit establishments which
are taking place under high-grade of bank supervision;
-
Development of providing subsystems of banking
sector.
Realization of the Program of reforming of banking
system of Republic of Uzbekistan will cause a number of positive
consequences on economy by maintenance of more advanced financial
environments for the enterprises of real sector of economy, creation
of favorable conditions for increase of business activity of small,
medium and private businesses, positive influence on increasing
of competitiveness of the domestic enterprises, assistance to essential
growth of a level of the savings and investments in a national economy,
strengthening of macroeconomic stabilization and tendencies of economic
growth.
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