On Measures for the Fundamental Improvement of the Activities of the Central Bank of the Republic of Uzbekistan

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10.06.2022

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Lost legal force 10.06.2022

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07.00.00.00 Legislation on Finance and Credit. Banking Activity / 07.19.00.00 Banking System / 07.19.01.00 Central Bank, its structural divisions and institutions]
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Finance / Banks and other credit institutions. Credits]

Decree of the President of the Republic of Uzbekistan

On Measures for the Fundamental Improvement of the Activities of the Central Bank of the Republic of Uzbekistan

This Decree has lost its legal force on the basis of the Decree of the President of the Republic of Uzbekistan dated June 9, 2022, No. PF-152 "On Making Additions and Amendments to Certain Documents of the President of the Republic of Uzbekistan and the Government of the Republic of Uzbekistan, as well as on Recognizing Some of Them as Having Lost Their Legal Force."

Serious changes occurring in the world financial system, as well as measures being implemented in the country for large-scale reform of the national economy, require the application of new approaches and principles in forming and implementing monetary and credit policy and further developing the banking system.

It must be honestly admitted that currently the opportunities for monetary and credit policy and banking regulation are not being fully utilized in practice; the underdevelopment of transmission mechanisms that ensure the proper functioning and effectiveness of monetary and credit instruments makes it difficult to achieve the set goals.

The underdevelopment of mechanisms by the Central Bank of the Republic of Uzbekistan (hereinafter referred to as the Central Bank) to influence the quality of management and risk management of commercial banks, the continued practice of administrative interference in the activities of banks, especially the creation by banks of enterprises not inherent in their activities, as well as the assignment of tasks not corresponding to their field of activity, complicates the effective implementation of banking supervision.

In accordance with the Strategy of Actions on Five Priority Areas of Development of the Republic of Uzbekistan for 2017–2021, as well as to ensure effective control over the stable operation of monetary and credit policy and the banking system in general, and further improvement of the Central Bank's activities:

1. The following shall be considered strategic priority directions of the Central Bank's activities:

price stability;

stability and development of the banking system;

stability and development of the payment system.

2. In the framework of ongoing reforms, the following shall be established as priority directions of the Central Bank's activities:

first, fundamental improvement of monetary and credit policy and its instruments through the gradual implementation of the principles and mechanisms of inflation targeting to prevent unjustified inflationary expectations, full transition to this approach in the medium-term perspective, and increasing the transparency of policy and measures implemented in the monetary and credit sphere;

second, development of the statistical, analytical, and research base to improve methods of forming, adopting, and implementing monetary and credit policy, based on in-depth study of inflation factors and the full formation of a system for accounting and analyzing the balance of payments;

third, improvement of mechanisms for regulating and supervising the banking system, including the system for managing and assessing the risk-taking of commercial banks, which allows for the early detection and elimination of problems arising in the activities of commercial banks;

fourth, development of the banking system as an important component ensuring stable economic growth in the medium and long-term perspective, formation of mutually full partnership relations between commercial banks and business entities, and creation of competitive conditions to strengthen the population's trust in the banking system as a reliable institutional partner;

fifth, further development of the payment system, including the organization of an effective information exchange system of commercial banks that allows for the rapid management of settlement accounts and execution of banking operations in real-time mode, as well as the provision of remote banking services;

sixth, implementation of comprehensive measures to strengthen the financial stability of non-bank credit organizations and strengthen supervision over their activities;

seventh, ensuring the protection of the rights and legitimate interests of consumers of banking services, and increasing financial openness and literacy levels of the population and business entities.

3. The following shall be established:

the Banking Supervision Committee and the Credit Committee of the Central Bank of the Republic of Uzbekistan, whose main tasks are, respectively, ensuring the stability of the banking system, protecting the interests of depositors and creditors, and implementing measures for the Central Bank's monetary and credit operations;

the Service for the Protection of the Rights of Consumers of Banking Services of the Central Bank, established on the basis of the Department for Working with Appeals of Physical and Legal Persons, whose main task is the protection of the rights and legitimate interests of consumers of banking services, and increasing financial openness and literacy levels of the population and business entities.

4. The proposals of the Central Bank of the Republic of Uzbekistan, the Ministry of Finance, and the State Tax Committee regarding:

the abolition of the Republican Bank Council;

the abolition of the Republican Monetary and Credit Policy Commission;

the abolition of the Republican Commission on Reducing Overdue Receivables and Payables and Strengthening Budget Payment Discipline;

the abolition of the State Unitary Enterprise "Agency for the Development of the Financial Sector of the Republic of Uzbekistan" under the Central Bank of the Republic of Uzbekistan;

the cancellation of the practice of assigning direct leadership of the activities of the Republican Cash Service under the Central Bank of the Republic of Uzbekistan to the Deputy Chairman of the Central Bank; are approved.
(Paragraph 7 of item 4 of this Decree, in the edition of the Decree of the President of the Republic of Uzbekistan dated September 22, 2020, No. PF-6066 — National Database of Legislative Acts of the Republic of Uzbekistan, September 23, 2020, No. 06/20/6066/1317)

5. Taking into account the approved priority directions of the Central Bank's activities and the optimized management system:

the organizational structure of the Central Bank of the Republic of Uzbekistan and the structure of its central apparatus are approved in accordance with Attachments 1 and 2;

the model structure of the Main Directorates of the Central Bank of the Republic of Uzbekistan in the Karakalpakstan Republic, regions, and the city of Tashkent is approved in accordance with Attachment 3.

6. In accordance with the Law of the Republic of Uzbekistan "On the Central Bank of the Republic of Uzbekistan":

it is noted that the Board of the Central Bank has the right to make changes to the staffing table of the Central Bank, its organizational structure, and the structures of its central apparatus and Main Directorates in the Karakalpakstan Republic, regions, and the city of Tashkent in necessary cases;

it is noted for information that the Central Bank is accountable to the Senate of the Oliy Majlis of the Republic of Uzbekistan;

the Central Bank is removed from the list of state bodies supervised by the Cabinet of Ministers of the Republic of Uzbekistan.

7. The Central Bank shall gradually introduce a modern personnel service that ensures the rational selection of employees, their placement and rotation, the quality formation of a personnel reserve, as well as increasing the efficiency and motivation of employee labor in 2018-2019.

8. In accordance with the Decree of the President of the Republic of Uzbekistan dated September 12, 2017, No. PQ-3270 "On Measures for Further Development and Increasing the Stability of the Republican Banking System" and the Decree dated September 13, 2017, No. PQ-3272 "On Measures for Further Improvement of Monetary and Credit Policy":

a) it is noted that:

the complex of measures for further development of the banking and financial system based on advanced banking practices for 2017–2021;

the complex of measures for further improvement of monetary and credit policy and gradual transition to the inflation targeting regime for 2017–2021;

were approved;

b) it is noted for information that personal responsibility has been placed on the Central Bank, commercial banks, and relevant ministries and departments for the timely and high-quality execution of the tasks envisaged in these complexes of measures.

9. The Central Bank shall:

take measures to increase the effectiveness of monetary and credit policy instruments by introducing modern types, mechanisms, and methods of liquidity provision and withdrawal to ensure price stability;

conduct a specific information and communication policy aimed at increasing the awareness and understanding of the public and business environment regarding monetary and credit policy;

systematically maintain the accounting and analysis of the balance of payments of the Republic of Uzbekistan in accordance with the methodology of the International Monetary Fund;

widely use innovative technologies to improve the effectiveness of the system for collecting and analyzing data in the banking system;

carry out effective supervision over the fulfillment of economic norms by banks, including capital adequacy and liquidity established within the framework of the requirements of international banking supervision principles;

introduce modern systems for assessing bank risks;

ensure the critical review of normative legal documents to eliminate barriers and create conditions for providing modern banking services, including the organization of "digital" banks and banking branches specializing in retail services, and the improvement of remote banking services through the active use of innovative banking technologies.

10. The following procedure is established:

the procedure for transferring enterprises declared bankrupt or having unpaid debt on loans to the property of commercial banks is abolished;

the participation of banks in the charter capital of management companies, investment companies and funds, as well as economic entities not inherent in banking activity, is prohibited.

11. The Central Bank shall, by September 1, 2018, develop and submit to the Cabinet of Ministers new editions of the drafts of the Laws of the Republic of Uzbekistan "On the Central Bank of the Republic of Uzbekistan" and "On Banks and Banking Activity," based on a deep study of advanced foreign experience and internationally recognized norms and standards, and the relevant expert opinions of specialized international financial institutions.

12. The proposals of the Central Bank of the Republic of Uzbekistan and the Ministry of Finance regarding:

the gratuitous transfer of the Central Bank's share in the authorized capital of the Joint-Stock Commercial People's Bank of the Republic of Uzbekistan and the Joint-Stock Commercial Bank "Mikrokreditbank" to the Ministry of Finance of the Republic of Uzbekistan on the right of operational management;

the introduction of a procedure prohibiting the inclusion of Central Bank employees in the supervisory boards of commercial banks, economic management bodies, and other economic entities;

the gratuitous placement of the relevant structural divisions of enterprises and organizations under the Central Bank's departmental subordination that ensure its activities in the territory and buildings of the Central Bank, as well as its Main Directorates in the Karakalpakstan Republic, regions, and the city of Tashkent; are approved.

13. The Central Bank shall, within one month:

approve the regulations on the Banking Supervision Committee and the Credit Committee of the Central Bank of the Republic of Uzbekistan and their composition;

approve the regulation on the Service for the Protection of the Rights of Consumers of Banking Services of the Central Bank of the Republic of Uzbekistan;

approve the program of measures for improving the activities and management system of enterprises and organizations under the Central Bank's departmental subordination that ensure its activities.

14. Amendments shall be made to certain documents of the President of the Republic of Uzbekistan in accordance with Attachment 4.

15. Certain documents of the President of the Republic of Uzbekistan shall be recognized as having lost their legal force in accordance with Attachment 5.

16. The Central Bank, together with the Ministry of Justice of the Republic of Uzbekistan and other interested ministries and departments, shall submit proposals to the Cabinet of Ministers of the Republic of Uzbekistan within two months regarding amendments and additions to legislative acts arising from this Decree.

17. Control over the execution of this Decree is entrusted to the Chairman of the Central Bank of the Republic of Uzbekistan, M.B. Nurmuratov.

President of the Republic of Uzbekistan Sh. MIRZIYOYEV

Tashkent city,

January 9, 2018,

No. PF-5296

Attachment 1 to the Decree of the President of the Republic of Uzbekistan dated January 9, 2018, No. PF-5296

Organizational Structure of the Central Bank of the Republic of Uzbekistan

(Attachment 1, in the edition of the Decree of the President of the Republic of Uzbekistan dated September 22, 2020, No. PF-6066 — National Database of Legislative Acts of the Republic of Uzbekistan, September 23, 2020, No. 06/20/6066/1317)

Attachment 1 is an unofficial translation.

Attachment 2 to the Decree of the President of the Republic of Uzbekistan dated January 9, 2018, No. PF-5296

Structure of the Central Apparatus of the Central Bank of the Republic of Uzbekistan

(Attachment 2, in the edition of the Decree of the President of the Republic of Uzbekistan dated September 22, 2020, No. PF-6066 — National Database of Legislative Acts of the Republic of Uzbekistan, September 23, 2020, No. 06/20/6066/1317)

Attachment 2 is an unofficial translation.

Attachment 3 to the Decree of the President of the Republic of Uzbekistan dated January 9, 2018, No. PF-5296

Model Structure of the Main Directorates of the Central Bank of the Republic of Uzbekistan in the Karakalpakstan Republic, Regions, and the City of Tashkent

• In the Main Directorates of the Central Bank of the Republic of Uzbekistan in the Karakalpakstan Republic, regions, and the city of Tashkent.

Attachment 3 is an unofficial translation.

Attachment 4 to the Decree of the President of the Republic of Uzbekistan dated January 9, 2018, No. PF-5296

AMENDMENTS to be made to certain documents of the President of the Republic of Uzbekistan

1. In paragraph 2 of the Decree of the President of the Republic of Uzbekistan dated October 28, 1997, No. PF-1875 "On Measures for Regulating the Organization of Capital Construction," the words "(Republican Commission on Monetary and Credit Policy)" shall be deleted.
   See previous edition.
   (Paragraph 2 has lost its legal force on the basis of the Decree of the President of the Republic of Uzbekistan dated September 22, 2020, No. PF-6066 — National Database of Legislative Acts of the Republic of Uzbekistan, September 23, 2020, No. 06/20/6066/1317) See previous edition. (Paragraph 3 has lost its legal force on the basis of the Decree of the President of the Republic of Uzbekistan dated September 22, 2020, No. PF-6066 — National Database of Legislative Acts of the Republic of Uzbekistan, September 23, 2020, No. 06/20/6066/1317)

2. In the fifth item of Attachment 5 of the Decree of the President of the Republic of Uzbekistan dated November 15, 2017, No. PQ-3388 "On Measures for Further Development of the Jewelry Industry of the Republic of Uzbekistan for 2018–2020," the following wording shall be stated:

"Sabirov B.B. — Director General of the Agency for Precious Metals."

Attachment 5 to the Decree of the President of the Republic of Uzbekistan dated January 9, 2018, No. PF-5296

LIST of documents of the President of the Republic of Uzbekistan that have lost their legal force

See previous edition.
(Paragraph 1 has lost its legal force on the basis of the Decree of the President of the Republic of Uzbekistan dated September 27, 2020, No. PF-6075 — National Database of Legislative Acts of the Republic of Uzbekistan, September 28, 2020, No. 06/20/6075/1330) See previous edition. (Paragraph 2 has lost its legal force on the basis of the Decree of the President of the Republic of Uzbekistan dated September 27, 2020, No. PF-6075 — National Database of Legislative Acts of the Republic of Uzbekistan, September 28, 2020, No. 06/20/6075/1330)

3. Decree of the President of the Republic of Uzbekistan dated July 11, 1996, No. PF-1492 "On the Composition of the Republican Monetary and Credit Policy Commission."

4. Paragraph 4 of the Decree of the President of the Republic of Uzbekistan dated February 18, 1997, No. PF-1710 "On the Establishment of the Export-Import National Insurance Company 'Uzbekinvest'."

5. Decree of the President of the Republic of Uzbekistan dated August 1, 1997, No. PF-1827 "On Changing the Composition of the Republican Monetary and Credit Policy Commission."

6. Attachment 9 to the Decree of the President of the Republic of Uzbekistan dated September 29, 2000, No. PF-2720 "On Approving the Composition of Certain Commissions."

7. Sub-item "b" of paragraph 2 of the Attachment to the Decree of the President of the Republic of Uzbekistan dated December 5, 2000, No. PF-2772 "On Making Amendments and Additions to Decrees of the President of the Republic of Uzbekistan."

8. Decree of the President of the Republic of Uzbekistan dated October 2, 2002, No. PF-3143 "On Making Amendments to Some Decrees of the President of the Republic of Uzbekistan."

9. Decree of the President of the Republic of Uzbekistan dated November 15, 2002, No. PF-3162 "On Establishing the Republican Bank Council."

10. Paragraph 1, fourth item of the Decree of the President of the Republic of Uzbekistan dated October 1, 2003, No. PF-3323 "On Making Amendments to Some Decrees of the President of the Republic of Uzbekistan and Recognizing Some of Them as Having Lost Their Legal Force."

11. Paragraphs 1 and 2 of the Attachment to the Decree of the President of the Republic of Uzbekistan dated February 27, 2009, No. PF-4087 "On Making Amendments and Additions to Some Decrees of the President of the Republic of Uzbekistan."

12. Paragraphs 31 and 33 of Attachment 2 to the Decree of the President of the Republic of Uzbekistan dated April 28, 2010, No. PF-4215 "On Making Amendments to Certain Documents of the President of the Republic of Uzbekistan and Some Decrees of the Government of the Republic of Uzbekistan."
    See previous edition.
    (Paragraph 13 has lost its legal force on the basis of the Decree of the President of the Republic of Uzbekistan dated April 30, No. PF-6218 — National Database of Legislative Acts of the Republic of Uzbekistan, April 30, 2021, No. 06/21/6218/0398)

13. Paragraph 7 of the Decree of the President of the Republic of Uzbekistan dated June 13, 2005, No. PQ-97 "On Sources of Additional Financing for Construction and Reconstruction Objects in Tashkent City in 2005."

14. Paragraph 7 of the Attachment to the Decree of the President of the Republic of Uzbekistan dated August 5, 2005, No. PQ-147 "On Guarantees for Continuous Provision of Cash Payments from Deposit Accounts in Banks."
    See previous edition.
    (Paragraph 16 has lost its legal force on the basis of the Decree of the President of the Republic of Uzbekistan dated April 30, No. PF-6218 — National Database of Legislative Acts of the Republic of Uzbekistan, April 30, 2021, No. 06/21/6218/0398)

15. Paragraph 8 of the Decree of the President of the Republic of Uzbekistan dated March 3, 2014, No. PQ-2137 "On Measures for Further Development of Construction Organizations and Strengthening Their Material and Technical Base."

16. Paragraph 12 of the Decree of the President of the Republic of Uzbekistan dated October 4, 2017, No. PQ-3309 "On Improving the System for Organizing the Construction and Operation of Road Bridges, Crossings, and Other Artificial Structures."
    (National Database of Legislative Acts of the Republic of Uzbekistan, January 10, 2018, No. 06/18/5296/0534; September 23, 2020, No. 06/20/6066/1317; September 28, 2020, No. 06/20/6075/1330; April 30, 2021, No. 06/21/6218/0398)