Improvement of Procedures for Formalizing Deposit Operations in Banks

The Instruction "On the Procedure for Carrying Out Deposit Operations in Banks of the Republic of Uzbekistan," approved by Resolution No. 19/11 of the Board of the Central Bank of the Republic of Uzbekistan dated July 22, 2015, was registered with the Ministry of Justice of the Republic of Uzbekistan on August 26, 2015, under No. 2711.

This Instruction was developed to improve the performance and control of operations related to the attraction, repayment, calculation, and payment of interest on deposits in national and foreign currencies by banks, in accordance with the Laws "On the Central Bank of the Republic of Uzbekistan," "On Banks and Banking Activity," and the Decision of the President of the Republic of Uzbekistan "On Measures to Further Increase the Financial Stability of Commercial Banks and Develop Their Resource Base" dated May 6, 2015, No. PQ-2344.

The Instruction provides a broader explanation for commercial banks regarding the acceptance of deposits, including demand and time deposits, and improves a number of documentation procedures in the acceptance of deposits.

The new edition of this Instruction includes the following main and important changes:

• Introduction of a Final Control Service to additionally verify the correct formalization of daily documents of deposit departments and deposit cashiers;
• Reduction of the period for granting the status of "inactive deposits" from 3 years to 1 year, with the aim of strengthening control over deposits not requested for a long time and simplifying work with them;
• Imposition of a ban in the program by the deposit department on operations on "inactive deposits" account numbers until the depositor arrives, from the point of view of security and convenience;
• Strict prohibition of using accounts 29801 "Settlements with Customers" and 29896 "Other Liabilities" as transit when crediting deposit funds to the bank balance, with the aim of reducing existing ambiguities in banks, including ensuring compliance with the chart of accounts;
• Organization of a "Personal Account" service on the website of each commercial bank, with the requirement to bring its operation to the required level, with the aim of further increasing depositors' trust in banks and ensuring the integrity of deposit funds in time and savings deposit accounts;
• Permission for the introduction of electronic deposit plastic cards by banks, with the aim of improving deposit operations and creating convenience for depositors;
• Permission to conduct inventory of population deposit balances in the bank using the "SMS-banking" program, while observing the requirements of the Law "On Bank Secrecy." In this case, banks must submit information to the Central Bank confirming that the inspection was conducted to the required extent;
• Elimination from practice of the Non-cash Receipt Order (Appendix 8 of the Instruction) and the Non-cash Payment Order (Appendix 9 of the Instruction), with the aim of reducing the documentation formalized in the work process. This is based on Clause 25 of the Regulation "On Non-Cash Payments in the Republic of Uzbekistan" (registration No. 2465, 03.06.2013), which stipulates the use of memorial orders by banks when transferring funds of individuals in non-cash form;
• Introduction of the "Register for Monitoring the Use of Strictly Accounted Forms Used During the Day," with the aim of controlling the use of strictly accounted forms used during the day;
• Permission for deposit booklets to be filled through the corresponding computer program, provided that the persons indicated therein sign personally, with the aim of improving deposit operations. Previously, deposit booklets were an exception to this;
• Permission to continue the deposit account in the previously opened account without opening new accounts for time and savings deposits whose term has expired and whose term has been extended, with the aim of improving deposit operations;
• Prohibition of transferring time and savings deposit funds to other deposit accounts without the participation of the depositor or their authorized representative after the term specified in the contract has expired or if no other conditions are provided for in the contract terms, with the aim of improving deposit operations;
• Introduction of the requirement to confirm all entries regarding the movement of deposits and interest on the personal account statement with the signatures of the controller and the depositor, with the aim of improving deposit operations and from the point of view of security;
• Permission for the formalization of a new deposit booklet for the same or another type of deposit without opening a new account or a new deposit booklet, without performing payment and re-credit operations at the bank cashier, if the depositor expresses the desire to reinvest (extend the term of) their expired time deposit, including the deposit amount and calculated interest (if the depositor wishes to add interest to the deposit amount), with the aim of improving deposit operations;
• Introduction of the provision that a new deposit booklet is issued within three bank working days instead of five bank working days after the submission of an application "about the loss of the deposit booklet," with the aim of creating convenience for depositors;

At the same time, it is established that legal entities may make payments (wages, payments equivalent to wages, etc.) to the personal accounts of one or more individuals in accordance with the law, based on general contracts concluded with the bank.

It should be noted that the new edition of this Instruction plays an important role in preserving the integrity of deposit funds, along with satisfying the population's demand for banking services and increasing their trust.