Comments on the Guidance on the Procedure for Conducting Deposit Operations in Banks of the Republic of Uzbekistan

COMMENTS ON THE GUIDANCE ON THE PROCEDURE FOR CONDUCTING DEPOSIT OPERATIONS IN BANKS OF THE REPUBLIC OF UZBEKISTAN

The Board of the Central Bank of the Republic of Uzbekistan approved the "Guidance on the Procedure for Conducting Deposit Operations in Banks of the Republic of Uzbekistan" on December 31, 2010, and this Guidance was registered with the Ministry of Justice under No. 2205 on March 4 of the current year.

In connection with the entry into force of this Guidance, the "Regulation on Deposits in Banks of the Republic of Uzbekistan" (registration No. 534, November 16, 1998) lost its force. This Regulation contained only general concepts and norms describing types of deposits. In addition, the "Guidance on Organizing Cash Operations, Collection, and Transportation of Valuables in Commercial Banks" (registration No. 1831, June 27, 2008) regulates operations performed in cash offices located within bank branches.

The "Guidance on the Procedure for Conducting Deposit Operations in Banks of the Republic of Uzbekistan" establishes the procedure for performing and controlling operations related to the attraction, repayment, interest calculation, and payment of deposits by commercial banks, in accordance with the Civil Code of the Republic of Uzbekistan and the Laws "On the Central Bank of the Republic of Uzbekistan" and "On Banks and Banking Activity."

It is well known that as a result of reforms being implemented step-by-step in the banking system of the republic over the past period, serious changes have occurred in normative legal documents regulating bank activities. In particular, laws on "Guarantees for Protecting Citizens' Deposits in Banks," "Bank Secrecy," "Combating the Legalization of Income Obtained from Criminal Activity and Financing of Terrorism," "Electronic Payments," "Electronic Document Circulation," and "Electronic Digital Signature" were adopted and implemented. As a result, fundamental technological and legal changes occurred in the conduct of banking operations and the preparation of reports. Naturally, these changes also affected issues related to the conduct of deposit operations.

In addition, modern new technologies began to be introduced into the banking system of the republic over the past period. Specifically, significant changes occurred in the structural composition of commercial banks. For example, branches organized outside the branches of many large commercial banks, such as minibanks, as well as stationary and mobile operational cash offices performing deposit operations, began to operate. By the beginning of this year, the number of deposit cash offices engaged in accepting deposits from physical persons approached 5,000, which is clear evidence of our view.

The above factors, along with the need to fully cover the main principles of operations performed by banks on deposits (deposits) of legal and physical persons, the documents used in them and the procedure for their formalization, the reflection of deposit operations in personal account passbooks, the completion of the working day in deposit cash offices, the preparation of daily reports and their final control, as well as the establishment of rules for organizing a special department for deposit operations in the banking system and creating a normative document regulating all other issues related to deposit operations, gave rise to the task.

In this regard, the "Guidance on the Procedure for Conducting Deposit Operations in Banks of the Republic of Uzbekistan" was developed.

This Guidance consists of 17 sections, 233 paragraphs, and 15 appendices.

The "General Provisions" section provides concepts and general rules used in this Guidance, as well as introduces new concepts not provided for in other legal acts, such as "Deposit Department," "Deposit Cash Office," "Final Controller," and "Inactive Deposits," and describes the definition of "Bank Deposit Contract."

At the same time, based on current legislation, rules for the disposal of deposits by physical persons in banks, means to ensure the return of deposits accepted by the bank, the minimum and maximum amounts of deposits placed by the depositor, and rules for fees charged by the bank for performing deposit operations were established.

Banks must ensure secrecy of information about bank deposits in accordance with the requirements established by legislation.

Based on this Guidance, bank deposits are divided into types: "Demand Deposits," "Savings Deposits," "Time Deposits," and "Deposit Certificates," and definitions are provided for each type of deposit, clarifying their specific characteristics. In addition, banks are permitted to accept other deposits not contrary to legislation, in addition to the above-mentioned types of deposits.

The section "Documents Maintained in Performing Operations on Deposits of Physical Persons" of the Guidance deserves special attention. Indeed, this document lists for the first time the documents that banks must use when performing deposit operations for physical persons, and their forms are provided in the appendices. In addition, a separate section was introduced regarding the opening, maintenance, and closing of personal accounts for physical persons' deposits. Of course, most of the above-mentioned documents have been used in banking practice. However, they mainly retained the forms used by "savings offices" during the old Soviet regime. Therefore, they were sorted out and their forms simplified based on current requirements. In addition, a new document confirming that the depositor has placed funds with the bank - the "Confirmation" - was introduced.

The Guidance is further supplemented with sections detailing the acceptance of funds from physical persons for deposit, the issuance of deposits to physical persons, the non-cash credit and debit operations on personal accounts of physical persons depositors, the completion of the operational day in deposit cash offices, the preparation of daily reports, and the final control of operations performed daily in deposit cash offices.

The main document confirming to the depositor that the bank has received the deposit and the operations performed on the deposit is the deposit passbook. Therefore, this normative document introduced separate sections on issuing new deposit passbooks and establishing control over the consumption of deposit passbooks issued for formalizing deposit operations.

The final section "Final Provisions" of the Guidance establishes norms of liability for performing deposit operations.

In conclusion, a comprehensive and thorough normative document has been created that details the rules for performing operations on deposits of physical persons, which is a complex and at the same time extremely important task in the activities of commercial banks.

The "Guidance on the Procedure for Conducting Deposit Operations in Banks of the Republic of Uzbekistan" developed by the Central Bank serves as a manual for employees of commercial banks to correctly and accurately perform deposit operations, and all commercial banks are required to comply strictly with the requirements of this document.

Commercial banks must develop their internal regulations in compliance with the rules of this Guidance.

M. MARPATOV Deputy Director of the Department of Accounting, Reporting, and State Budget Cash Execution Central Bank of the Republic of Uzbekistan, Ph.D.