On Measures for the Development of the National Payment System

Through the consistent implementation of measures to develop the cashless payment system, a reduction in the circulation of cash outside the banking sector was achieved, the payment process was significantly facilitated, and the functionality of remote banking service systems was expanded.

As a result of the work carried out, the population's confidence in bank cards and other cashless payment methods as a safe and convenient payment tool increased. At the same time, despite the achievements made, there are a number of shortcomings in the introduction of modern technological solutions to develop payment systems, ensure their continuous operation, and foster a competitive environment.

In particular, the absence of a state processing center for retail payments reduces the security level of the national payment system, prevents achieving a unified integration of payment infrastructure, and leads to the absolute dominance of a single monopolistic system.

Furthermore, the lack of legislative regulation of the activities of payment system operators limits their development and negatively affects the reliable operation of these systems.

To ensure the continuity of payments, introduce innovative products, ensure the accessibility of banking services, develop a competitive environment in the payment services market, and implement the tasks set forth in the Strategy of Actions on Five Priority Areas of Development of the Republic of Uzbekistan for 2017–2021:

1. Consent is given to the proposal of the Central Bank of the Republic of Uzbekistan to establish the "Uzbekistan Republic Central Bank Information Technology Center" State Unitary Enterprise National Interbank Processing Center (hereinafter referred to as the National Interbank Processing Center).

2. The comprehensive measures for the establishment of the National Interbank Processing Center are approved in accordance with the Appendix.

3. The Central Bank of the Republic of Uzbekistan:

   • ensures the creation of a fully functional data processing center for the operation of the National Interbank Processing Center, the Interbank Payment System, and the Clearing Center of the Central Bank of the Republic of Uzbekistan by July 1, 2019;
   • ensures the launch of the National Interbank Processing Center, which facilitates information and technological communication between banks participating in settlements on local and international bank cards, by January 1, 2020;
   • ensures that by July 1, 2020, all processing centers in the country, including international payment systems, operate through a single gateway of the National Interbank Processing Center;
   • ensures the continuous improvement of the banking payment infrastructure, including the expansion of the network of ATMs and self-service multi-function terminals, involving enterprises and organizations under their control.

4. The Association of Banks of Uzbekistan, together with commercial banks, ensures the integration and mutual service of existing processing centers with the National Interbank Processing Center during the implementation of the National Interbank Processing Center project.

5. It is established that bank tariffs for providing retail payment services are set in accordance with international practice without administrative interference, to ensure the coverage of bank costs and support competition.

6. The Central Bank shall develop and submit to the Cabinet of Ministers by January 1, 2019, a draft Law of the Republic of Uzbekistan "On Payments and Payment Systems," based on a deep study of advanced foreign experience and generally recognized international norms and rules, which shall provide for:

   • the legal and organizational foundations of the national payment system;
   • the procedure for the Central Bank to monitor the regulation of the payment services market and license subjects of the national payment system;
   • features of ensuring the protection of bank secrecy in payment systems;
   • the regulation of legal relations in the field of operations with electronic money, including the procedure for identifying owners of electronic wallets.

7. As an exception, within the framework of implementing the project, permission is granted to the Central Bank and the "Uzbekistan Republic Central Bank Information Technology Center" State Unitary Enterprise:

   • to carry out construction and design simultaneously under conditions of design and financing, while complying with urban planning norms and rules established in the territory of the Central Bank;
   • to determine design and contracting organizations, as well as suppliers of equipment, components, machinery and technology, spare parts, raw materials, and materials based on the selection of the best offers without holding tender (competitive) auctions.

8. Control over the execution of this resolution is entrusted to the Prime Minister of the Republic of Uzbekistan A.N. Aripov, the Head of the Presidential Administration of the Republic of Uzbekistan Z.Sh. Nizomiddinov, the First Deputy Advisor to the President of the Republic of Uzbekistan B.M. Mavlonov, and the Chairman of the Central Bank of the Republic of Uzbekistan M.B. Nurmuratov.

President of the Republic of Uzbekistan Sh. MIRZIYOYEV Tashkent September 19, 2018 Resolution No. PQ-3945

APPENDIX to the Resolution of the President of the Republic of Uzbekistan dated September 19, 2018 No. PQ-3945

COMPREHENSIVE MEASURES for the Establishment of the National Interbank Processing Center

| No. | Name of Measures | Deadlines | Responsible Executors | | :--- | :--- | :--- | :--- |
| I. Establishment and Organization of Operations of the National Interbank Processing Center | | 1. | Approval of the Regulation on the National Interbank Processing Center (NIPC), its structure, and staff schedule. | By November 1, 2018 | Central Bank (M. Nurmuratov) | | 2. | Design of main and backup data processing centers. | By December 1, 2018 | Central Bank (B. Zokhidov) | | 3. | Conduct negotiations with prominent suppliers of specialized software for processing centers, identify the best offer, and conclude a contract. | By February 1, 2019 | Central Bank (M. Nurmuratov) | | 4. | Conduct negotiations with renowned manufacturers of servers and specialized equipment for the NIPC, Interbank Payment and Clearing System, identify the best offer, and conclude a contract. | By March 1, 2019 | Central Bank (M. Nurmuratov) | | 5. | Complete the construction of a building for the data processing center in the territory of the Central Bank. | By April 1, 2019 | Central Bank (B. Zokhidov) | | 6. | Equip the data processing center with servers and specialized equipment. | By July 1, 2019 | Central Bank (B. Zokhidov) | | 7. | Ensure full integration of commercial banks' automated banking systems with the NIPC system. | By October 1, 2019 | Commercial Banks, Central Bank (B. Zokhidov), ABT Manufacturers | | 8. | Connect billing systems of service providers to the NIPC system. | By December 1, 2019 | Central Bank (B. Zokhidov) | | 9. | Launch the National Interbank Processing Center. | By January 1, 2020 | Central Bank (B. Zokhidov) | | 10. | Issue contactless (dual-interface) bank cards. | By January 1, 2020 | Central Bank (B. Zokhidov), Commercial Banks | | 11. | Install POS terminals for banks with the ability to make contactless payments (NFC). | By March 1, 2020 | Commercial Banks, Central Bank (B. Zokhidov) | | 12. | Organize the connection of the NIPC to international payment systems (UnionPay, Mastercard, VISA). | By September 1, 2020 | Central Bank (M. Nurmuratov) |
| II. Ensuring Integration with Existing Processing Centers | | 13. | Implement host-to-host connection of other processing centers with the NIPC system. | By December 1, 2019 | Banks Association, Processing Centers, Central Bank (B. Zokhidov) | | 14. | Ensure mutual transfer of electronic payments between existing processing centers (P2P transfers, online payments, and other operations). | From January 1, 2020 | Banks Association, Processing Centers, Central Bank (M. Nurmuratov) | | 15. | Update software for devices (terminals, info-kiosks, ATMs) used for mutual card services by processing centers through the single gateway of the National Interbank Processing Center. | By April 1, 2020 | Banks Association, Processing Centers, Commercial Banks, Central Bank (B. Zokhidov) |
| III. Implementation of Innovative Digital Solutions for Banks | | 16. | Develop a standardized and universal payment system based on QR codes. | By August 1, 2019 | Central Bank (B. Zokhidov), Payment Systems, Commercial Banks | | 17. | Create a system for remote customer identification. | By January 1, 2020 | Commercial Banks | | 18. | Implement a service for opening virtual cards linked to the main cards of banks and payment systems' mobile applications. | By February 1, 2020 | Commercial Banks | | 19. | Implement a contactless payment system (NFC payment) using mobile phones and other devices. | By March 1, 2020 | Central Bank (B. Zokhidov) | | 20. | Provide banks with a platform for creating customers' personal cabinets and mobile applications. | By April 1, 2020 | Central Bank (B. Zokhidov) |

LexUZ Commentary Unofficial translation (National Database of Legislative Acts, 20.09.2018, No. 07/18/3945/1888)