Approval of the Regulation on the Procedure for Commercial Banks to Lend to Housing Property Owners' Associations in National Currency

Resolution of the Board of the Central Bank of the Republic of Uzbekistan, registered on April 18, 2002, registration number 1126

Date of Entry into Force

28.04.2002

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25.03.2021

24.01.2020

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28.04.2002

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Document lost its force 25.03.2021

[
OKOZ:
1.
07.00.00.00 Legislation on Finance and Credit. Banking Activity / 07.22.00.00 Lending / 07.22.03.00 Loans of Commercial Banks]
[
TSZ:
1.
Finance / Banks and other credit institutions. Loans]

RESOLUTION OF THE BOARD OF THE CENTRAL BANK OF THE REPUBLIC OF UZBEKISTON

ON APPROVAL OF THE REGULATION ON THE PROCEDURE FOR LENDING BY COMMERCIAL BANKS TO HOUSING PROPERTY OWNERS' ASSOCIATIONS IN NATIONAL CURRENCY

[Registered by the Ministry of Justice of the Republic of Uzbekistan on April 18, 2002, registration number 1126]

This resolution loses its force based on the Resolution of the Board of the Central Bank of the Republic of Uzbekistan No. 3/3 dated February 24, 2021 "On Approval of the Regulation on the Procedure for Lending by Commercial Banks to Housing Property Owners' Associations in National Currency" and on the Resolution on Amendments and Additions to it (registration number 1126-6, dated 25.03.2021).

In accordance with Resolution No. 74 of the Cabinet of Ministers of the Republic of Uzbekistan dated March 1, 2002 "On Additional Measures to Support Housing Property Owners' Associations", the Board of the Central Bank of the Republic of Uzbekistan resolves:

1. The report of H. Nurmurotov, Director of the Department for Coordination of Methodological Work in the Banking System, on this issue is accepted for information.

2. The "Regulation on the Procedure for Lending by Commercial Banks to Private Housing Property Owners' Associations in National Currency" is approved according to the Appendix.

3. This Regulation enters into force 10 days after the day of its registration with the Ministry of Justice of the Republic of Uzbekistan.

4. Control over the execution of this resolution is entrusted to Deputy Chairman A. Qodirov.

Chairman of the Central Bank F. MULLAJONOV

Tashkent city,
March 16, 2002,
No. 6/1

Approved by the Board of the Central Bank of the Republic of Uzbekistan March 16, 2002, No. 506 (No. 6/1 protocol, March 16, 2002)

REGULATION

On the Procedure for Lending by Commercial Banks to Private Housing Property Owners' Associations in National Currency

1. General Provisions

2. This Regulation is developed in accordance with the Laws of the Republic of Uzbekistan "On the Central Bank of the Republic of Uzbekistan", "On Banks and Banking Activity", Resolution No. 178 of the Cabinet of Ministers of the Republic of Uzbekistan dated April 18, 2001 "On Additional Measures to Improve the Provision of Communal Services to the Population", Resolution No. 74 of the Cabinet of Ministers of the Republic of Uzbekistan dated March 1, 2002 "On Additional Measures to Support Housing Property Owners' Associations", as well as other legislation of the Republic of Uzbekistan, and establishes the procedure for lending to private housing property owners' associations by commercial banks.

3. Lending to private housing property owners' associations within the territory of the Republic of Uzbekistan is carried out by commercial banks in accordance with this Regulation, observing the conditions for the repayment, profitability, security, timeliness of loans granted, and their targeted use, taking into account a comprehensive assessment of risks and the value of collateral.

4. Subjects of lending are associations - housing property owners' associations (hereinafter referred to as HPOAs) - established in the manner prescribed by legislative acts to ensure the use of housing by private housing owners, joint management and maintenance of it, establish the conditions and procedure for ownership and use of common-use facilities, and ensure the proper condition of property in common ownership.

5. Loans to HPOAs are granted for the following purposes:

• comprehensive repair of roofs of multi-apartment buildings and/or engineering communications inside the building - taking into account the periodicity of execution of these works;

• purchase of fixed assets (special equipment and mechanisms);

• landscaping of yard areas.

5. The terms of loans granted by commercial banks are determined independently based on the availability of resources and the possibility of their repayment.
   (Paragraph 5 in the edition of the Resolution of the Board of the Central Bank of the Republic of Uzbekistan No. 31/8 dated December 21, 2019 (registration number 1126-5, dated 24.01.2020) - National Database of Legislative Acts of the Republic of Uzbekistan, dated 24.01.2020, No. 10/20/1126-5/0080)

6. Loans granted by commercial banks are issued at the refinancing rate of the Central Bank of the Republic of Uzbekistan, or at rates established independently based on market principles starting from January 1, 2021, with the possibility of applying a mechanism for compensating part of interest expenses.
   (Paragraph 6 in the edition of the Resolution of the Board of the Central Bank of the Republic of Uzbekistan No. 31/8 dated December 21, 2019 (registration number 1126-5, dated 24.01.2020) - National Database of Legislative Acts of the Republic of Uzbekistan, dated 24.01.2020, No. 10/20/1126-5/0080)

7. Procedure for Formalizing Loans

8. Loans are implemented by the bank where the borrower's main demand deposit account is opened, in agreement with local finance bodies, upon the presence of documents approving the project estimate for capital repair of the object by the relevant departments of the Ministry of Housing and Communal Services of the Karakalpakstan Republic, Departments of Housing and Communal Services of regions, and the Main Department of Housing and Communal Services of Tashkent City, as well as a list of addresses, and a financing plan explaining the sources of financing for the capital repair of the housing stock.

Loans to HPOAs for the purposes specified in Paragraph 4 of this Regulation are granted for the missing part of funds in accordance with the capital repair financing plan.

8. To obtain an HPOA loan, the borrower must submit the following documents (loan package) to the bank:

• loan application;

• protocol of the housing property owners' meeting on the need to obtain a loan, officially оформлен in the prescribed manner;

• business plan of the borrower showing the inflow of funds (cash flow) to the bank account;

• accounting balance (Form No. 1) of the borrower submitted to the relevant state tax inspection for the last reporting period, as well as reconciliation statements for debts overdue by more than 90 days, and a report on financial results (Form No. 2);

• one of the forms of loan repayment security specified in Paragraph 9 of this Regulation.

9. To prevent the risk of non-repayment of received loans, the borrower must have security that meets the requirements for quick and free sale. The borrower may submit to the bank one of the following types of security:

• pledge of property or securities;

• guarantee of third parties;

• insurance policy of an insurance company confirming the insurance of the risk of non-repayment of the loan by the debtor;

• guarantee of district (city) hokimiyats (local administrations).
  (Paragraph 9 was supplemented with a bullet point based on the Resolution of the Board of the Central Bank of the Republic of Uzbekistan No. 31/8 dated December 21, 2019 (registration number 1126-5, dated 24.01.2020) - National Database of Legislative Acts of the Republic of Uzbekistan, dated 24.01.2020, No. 10/20/1126-5/0080)

10. Banks have the right to issue trusted (reliable) loans to borrowers with whom they have permanent contact, have regular cash flow in their bank accounts, and have a good reputation and credit history.

11. Property pledge serves as one of the forms of loan repayment security. In accordance with the Law of the Republic of Uzbekistan "On Pledge", any property, including items, property rights, may be pledged.

Banks accept liquid property, including production and social infrastructure facilities, transport vehicles, and other liquid assets of the borrower, as collateral.

In this case, the house, apartment, household appliances and equipment, clothing, and other items necessary for the normal life of the borrower's family cannot be the subject of a pledge.

12. A guarantee is formalized in favor of the bank by a guarantee agreement concluded in writing in 3 (three) copies between the borrower and the guarantor. On the last page of this agreement, after the signatures of the guarantor and the borrower, a record is entered signed by the head of the bank branch confirming the acceptance of the guarantee by the bank.
    (Paragraph 12 in the edition of the Resolution of the Board of the Central Bank of the Republic of Uzbekistan No. 31/8 dated December 21, 2019 (registration number 1126-5, dated 24.01.2020) - National Database of Legislative Acts of the Republic of Uzbekistan, dated 24.01.2020, No. 10/20/1126-5/0080)

13. When making a decision on granting a loan, the bank takes into account not only the borrower's ability to repay the loan, but also other various aspects of the credit agreement, including the marketability of the submitted security, the borrower's credit history, and the reputation of its head (previous places of work, qualifications, timely repayment of previously obtained loans, security, etc.).

14. Starting from the moment a decision is made to grant a loan, a credit card is opened for the borrower, and control over the loan is carried out using it.

15. Procedure for Granting and Repaying Loans

16. Loans are implemented from a separate credit account based on the borrower's payment order. Payment orders are signed by an employee of the credit department handling this loan. In this case, he must strictly control the targeted direction of payments made from the credit account.
    (Paragraph 15 in the edition of the Resolution of the Board of the Central Bank of the Republic of Uzbekistan No. 31/8 dated December 21, 2019 (registration number 1126-5, dated 24.01.2020) - National Database of Legislative Acts of the Republic of Uzbekistan, dated 24.01.2020, No. 10/20/1126-5/0080)

17. Financing of capital repair from the credit account is implemented by the HPOA after submitting to the bank the terms of the contract concluded between the HPOA and contracting organizations, indicating the volume of all works specified in the address program and the distribution of funds allocated to the object:
    (Paragraph 16 in the edition of the Resolution of the Board of the Central Bank of the Republic of Uzbekistan No. 31/8 dated December 21, 2019 (registration number 1126-5, dated 24.01.2020) - National Database of Legislative Acts of the Republic of Uzbekistan, dated 24.01.2020, No. 10/20/1126-5/0080)

An amendment was made to the first bullet point of Paragraph 16 based on Resolution No. 20/3 of the Board of the Central Bank of the Republic of Uzbekistan dated August 16, 2006.
See Russian text.

The selection of a contracting organization is carried out based on the results of competitive tenders.

An amendment was made to the second bullet point of Paragraph 16 based on Resolution No. 11/3 of the Board of the Central Bank of the Republic of Uzbekistan dated April 25, 2015.
See Russian text.

17. The accounting of loans granted to the borrower is maintained in the relevant balance sheet accounts in accordance with the Chart of Accounts of Accounting in Commercial Banks of the Republic of Uzbekistan (registration number 773-17, dated August 13, 2004).
    (Paragraph 17 in the edition of the Resolution of the Board of the Central Bank of the Republic of Uzbekistan No. 31/8 dated December 21, 2019 (registration number 1126-5, dated 24.01.2020) - National Database of Legislative Acts of the Republic of Uzbekistan, dated 24.01.2020, No. 10/20/1126-5/0080)

18. According to the order of the credit department, term obligations are formalized in separate credit accounts for granted loans, and their accounting is maintained until the loans are fully repaid.
    (The first bullet point of Paragraph 18 in the edition of the Resolution of the Board of the Central Bank of the Republic of Uzbekistan No. 31/8 dated December 21, 2019 (registration number 1126-5, dated 24.01.2020) - National Database of Legislative Acts of the Republic of Uzbekistan, dated 24.01.2020, No. 10/20/1126-5/0080)

The loan repayment schedule may be presented in the form of a table providing for several stages of repayment, depending on the prospects for cash inflow.

If the loan repayment date arrives and there are no funds in the borrower's accounts, the debt is recovered in the manner prescribed by the "Guidelines on the Procedure for Deducting Funds from Bank Accounts of Business Entities" (registration number 2342, dated March 15, 2012). (The third bullet point of Paragraph 18 in the edition of the Resolution of the Board of the Central Bank of the Republic of Uzbekistan No. 31/8 dated December 21, 2019 (registration number 1126-5, dated 24.01.2020) - National Database of Legislative Acts of the Republic of Uzbekistan, dated 24.01.2020, No. 10/20/1126-5/0080)

19. Commercial banks carry out constant monitoring throughout the entire period of loan usage. During the monitoring process, the client's economic and financial activity, the fulfillment of its obligations to provide services in accordance with concluded contracts (orders), the volume of services provided, non-production expenses and losses, operating expenses, profit, the dynamics of the availability of working capital, the condition of commodity-material reserves, and the turnover of working capital are analyzed. The bank carries out constant monitoring of the borrower's creditworthiness and systematizes its indicators in the credit portfolio.

The condition of the collateral submitted to the bank and the effective and targeted use of the loan are examined on-site in accordance with the terms agreed in the credit contract.

For loans allocated for financing capital repair and other landscaping works, the bank carries out control measurement of the volume of work performed at the financed object in accordance with the terms and deadlines specified in the credit contract during the monitoring process.

20. If, based on the results of control measurement, the bank finds that the volume of work performed has been overstated, this amount is transferred to the account of overdue loans in the manner prescribed by the credit contract and recovered.
    (The first bullet point of Paragraph 20 in the edition of the Resolution of the Board of the Central Bank of the Republic of Uzbekistan No. 31/8 dated December 21, 2019 (registration number 1126-5, dated 24.01.2020) - National Database of Legislative Acts of the Republic of Uzbekistan, dated 24.01.2020, No. 10/20/1126-5/0080)

The credit contract must provide for penalty sanctions for non-targeted use of the loan, including for overstating the volume of work performed.

21. If it is established that loans granted were used for other purposes, the bank has the right to recover in advance the part of the loan used inappropriately from the borrower's demand deposit account in the manner prescribed by the credit contract.
    See previous edition.
    (Paragraph 22 was repealed based on the Resolution of the Board of the Central Bank of the Republic of Uzbekistan No. 31/8 dated December 21, 2019 (registration number 1126-5, dated 24.01.2020) - National Database of Legislative Acts of the Republic of Uzbekistan, dated 24.01.2020, No. 10/20/1126-5/0080)

22. If the borrower fails to repay the debt and accrued interest on time, the bank has the following rights:

to place mandatory payment demands on secondary accounts of debtors, including those opened in other banks;

if the main debt and accrued interest on the loan are not repaid by the debtor within the period agreed in the credit contract, the bank has the right to recover such loans by recovering from the debtor's liquid property, including production and social infrastructure facilities, transport vehicles, computers, and other liquid assets of enterprises and organizations, in accordance with the "Procedure for Recovering from the Liquid Property of Debtors in Case of Untimely Repayment of Bank Loans" approved by Resolution No. 422 of the Cabinet of Ministers of the Republic of Uzbekistan dated December 4, 2002.

The bank has the right to recover from the district (city) hokimiyat (local administration) the debt arising from loans granted to associations guaranteed by the district (city) hokimiyat, based on the "Regulation on the Procedure for Providing Guarantees by District (City) Hokimiyats for Bank Loans Attracted by Private Housing Property Owners' Associations and for Covering Overdue Debt", approved by Resolution No. 396 of the Cabinet of Ministers of the Republic of Uzbekistan dated May 13, 2019. (Paragraph 23 was supplemented with a bullet point based on the Resolution of the Board of the Central Bank of the Republic of Uzbekistan No. 31/8 dated December 21, 2019 (registration number 1126-5, dated 24.01.2020) - National Database of Legislative Acts of the Republic of Uzbekistan, dated 24.01.2020, No. 10/20/1126-5/0080)