Regulation on Minimum Requirements for the Activities of Microcredit Organizations and Pawnshops in Relations with Financial Service Consumers

Resolution of the Board of the Central Bank of the Republic of Uzbekistan, registered on June 30, 2020, registration number 3262

Date of Entry into Force

October 1, 2020

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December 7, 2022

July 28, 2021

October 10, 2020

October 1, 2020

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Document lost its force December 7, 2022

[
OKOB:
1.
07.00.00.00 Legislation on Finance and Credit. Banking Activity / 07.22.00.00 Lending / 07.22.06.00 Specific Types of Lending / 07.22.06.02 Microcrediting. Lending to small business entities;
2.
07.00.00.00 Legislation on Finance and Credit. Banking Activity / 07.23.00.00 Other Credit Institutions / 07.23.02.00 Pawnshops]
[
TSZ:
1.
Finance / Banks and other credit institutions. Credits]

Resolution of the Board of the Central Bank of the Republic of Uzbekistan

On Approval of the Regulation on Minimum Requirements for the Activities of Microcredit Organizations and Pawnshops in Carrying Out Relations with Financial Service Consumers

[Registered by the Ministry of Justice of the Republic of Uzbekistan on June 30, 2020, registration number 3262]

This resolution loses its force from December 7, 2022, based on Resolution No. 14/6-1 dated July 18, 2022 of the Board of the Central Bank of the Republic of Uzbekistan "On Approval of the Regulation on Minimum Requirements for the Activities of Microfinance Organizations and Pawnshops in Carrying Out Relations with Financial Service Consumers" (registration number 3384, dated September 6, 2022).

In accordance with the Law of the Republic of Uzbekistan "On the Central Bank of the Republic of Uzbekistan", the Board of the Central Bank decides:

1. Approve the Regulation on Minimum Requirements for the Activities of Microcredit Organizations and Pawnshops in Carrying Out Relations with Financial Service Consumers according to the Appendix.

2. This resolution enters into force three months after the date of its official publication.

Chairman of the Central Bank M. NURMURATOV

Tashkent city,
June 27, 2020,
No. 15/3

APPENDIX

to the Resolution of the Board of the Central Bank of the Republic of Uzbekistan dated June 27, 2020, No. 15/3

REGULATION

on Minimum Requirements for the Activities of Microcredit Organizations and Pawnshops in Carrying Out Relations with Financial Service Consumers

This Regulation establishes the minimum requirements for the activities of microcredit organizations and pawnshops (hereinafter referred to in the text as credit institutions) in carrying out relations with financial service consumers, in accordance with the Laws of the Republic of Uzbekistan "On the Central Bank of the Republic of Uzbekistan", "On Microcredit Organizations", and "On Microfinancing".

Chapter 1. General Provisions

1. The following main concepts are used in this Regulation:
   consumers — physical and legal persons who have applied to the credit institution with a desire to use its financial services, are using these services, or have previously used them; credit — credit, microloan, or microcredits provided by the credit institution; inquiry — an application, complaint, or suggestion sent orally, in writing, or electronically to the credit institution by the consumer (or their representative).

2. Consumers have the right to freely choose the credit institution and the financial services provided by it.
   It is prohibited for the credit institution to provide one service conditional upon the consumer using an additional service.

3. Financial services of the credit institution are provided in accordance with the contract concluded between the credit institution and the consumer.
   The text of contracts must be expressed clearly and simply so that consumers can understand it, and when printed using computer means, it must use a font size no smaller than 12 points or a similar font, utilizing the Microsoft Word text editor. The text of contracts is drawn up in the state language. With mutual agreement between the consumer and the credit institution, the contract text may also be drawn up in another language.

Chapter 2. Minimum Requirements for Providing Information to Consumers

Section 1. General Minimum Requirements for Providing Information

4. Information about financial services provided by the credit institution must be disclosed to the consumer.
   Information about financial services must not contain trade secrets.

5. Conditions for providing financial services by the credit institution and information about changes to these conditions must be posted on the credit institution's information stands and announced on the credit institution's official website (if available).

6. Information about the credit institution's financial services must be provided to consumers free of charge and made available before contracts are concluded.

7. The consumer has the right to take the contract (for credit, microcredit, microloan, microleasing, etc.) for review before signing it.
   The credit institution must inform the consumer of their right to take the contract for review before signing it.

8. Information about the credit institution's financial services must be delivered to consumers in the state language. In this regard, the credit institution has the right to provide information about its financial services in other languages as well.
   The text of information about the credit institution's financial services should be expressed in concise, simple, and fluent language.

9. Financial services provided by the credit institution must be explained to consumers fully and correctly.

10. Upon receiving the consumer's oral or written request during the period of providing credit services by the microcredit organization, the following information is provided to them in writing free of charge once a month within one working day from the date of receipt:
    credit limit; amount of funds paid for the credit; remaining balance of the principal sum; amount, composition, and deadlines of next payments (payment schedule); amounts to be paid if the consumer expresses a desire to partially or fully repay the credit early; amount and composition of overdue debt; information that incoming funds will be directed to repay the credit.

11. At the consumer's request, the credit institution provides free of charge (once per contract for providing one service) certified copies of the following documents issued by the credit institution:
    the contract for providing financial services signed by the credit institution and the consumer; the application submitted by the consumer (if the legislation requires such an application to be formalized or if the credit institution's internal rules require such an application to be formalized when concluding a contract for providing financial services); (Paragraph 11, third bullet point was edited by Order No. 16-mh dated July 28, 2021 of the Minister of Justice of the Republic of Uzbekistan (registration number 3313, dated July 28, 2021), effective July 28, 2021, No. 10/21/3313/0724) a document confirming that credit was granted to the consumer (order, payment order, certificate of transfer of funds to an electronic payment instrument); a document confirming that the consumer has fully fulfilled obligations under credit contracts (certificate). At the consumer's request, the credit institution may provide the documents specified in this paragraph unlimitedly for a fee not exceeding the cost of preparing them. If there is no possibility to provide the documents specified in this paragraph, the credit institution must provide the consumer with a reasoned written notice about this.

12. The credit institution must agree with consumers on contact means when concluding a contract for providing financial services and ensure the opportunity to communicate through these contact means to provide information to consumers.

13. Within ten working days from the date of registration of the consumer's relevant inquiry at the credit institution, the contract for providing the credit institution's service, the application submitted by the consumer, and the document confirming that credit was granted to the consumer are provided. A document confirming that the consumer has fully fulfilled obligations under credit contracts is provided within one working day.

14. The credit institution must provide the consumer or their representative with one original copy of the contract on the day it is signed.

Section 2. Minimum Volume of Information Provided to Consumers

15. The following information must be posted on the credit institution's information stands:
    the full name, address, addresses of branches, working hours, contact telephone numbers, and email address of the credit institution; procedure, conditions, and cost of providing financial services to consumers; rates, interest rates, and brokerage fees for credit institution operations.

16. The credit institution must inform the consumer about the rights, obligations, and liabilities of the parties to the contract for providing financial services and, at the consumer's request, provide the information specified in Paragraph 15 of this Regulation.
    Refusal to provide information about the conditions and cost of services provided is not permitted.

17. Unilateral introduction by the credit institution of changes to the terms of the contract concluded with the consumer that affect the consumer's rights and lawful interests is not permitted.

18. Before the credit contract is concluded, the credit institution provides the consumer with the following information:
    the maximum amount of the credit; duration of using the credit; annual nominal value of the interest rate, as well as the full cost of the credit on the date of the consumer's inquiry (at the time of concluding the contract, it provides information on its absolute value, i.e., the principal value of the credit or loan, interest, commissions, and other payments, including payments to third parties according to current tariffs, specifying them separately); detailed list and amounts of brokerage fees, tariffs, and other payments related to obtaining the credit and servicing it; liability and risks of the consumer in case of non-performance of obligations under the credit contract; liability of the pledgor, guarantor (surety), and other persons who are parties to the credit contract; information about the rights and obligations of the credit institution and the consumer, including the consumer's rights during the process of collecting overdue debt, and information about the liability of the parties envisaged in the contract for providing financial services by the credit institution; deadlines for reviewing documents submitted by the consumer for obtaining credit, granting the credit, and using it; full list of documents required for obtaining credit; types of collateral accepted for credit security (if collateral is required).

19. The credit institution informs the consumer about risks associated with the consumer's failure to fulfill their obligations under the credit contract to the required extent, including about the penalty (fine, penalty) applied for violating obligations against the consumer and the probability of increasing the consumer's expenses as a result.

20. The consumer must be warned that the information provided by the consumer in response to inquiries may affect the terms of the credit contract being drawn up.

21. When a consumer applies to a microcredit organization for a credit, the microcredit organization fills out together with the consumer the Information Sheet on Main Terms of Credit (hereinafter referred to in the text as Information Sheet) attached to this Regulation and provides it to the consumer free of charge.
    The Information Sheet is not considered an order for obtaining credit.

Chapter 3. Organization of Relations Between the Credit Institution and the Consumer

Section 1. Basic Rules for Carrying Out Relations Between the Credit Institution and the Consumer

22. If questions arise regarding the mutual relations of the parties under the contract for providing the credit institution's service, the credit institution must provide the consumer with reasoned answers and other relevant explanations on the essence of these questions.
    In this regard, the credit institution is not entitled to engage in activities related to advising consumers on methods and ways to evade debt repayment and/or avoid liability for non-payment, as well as other similar issues (including regarding services provided by other financial institutions).

23. The use of dishonest service practices in the activities of the credit institution is not permitted, including:
    providing incorrect information to the credit bureau and/or other organizations by the credit institution with the aim of preventing the consumer from concluding a contract with another credit institution; encouraging the consumer to conclude another credit contract with the aim of repaying an initial debt formalized under favorable conditions for the consumer; rewarding and incentivizing employees of the credit institution for implementing measures aimed at increasing the amount of consumer debt.

24. When providing services on credits to consumers, credit institutions must adhere to the principles of honesty, transparency, reliability, partnership relations, taking into account economic interests and opportunities.

25. The credit institution:
    must not exceed the announced interest rate indicators on the date of granting the credit for nominal and real interest rates on the credit; must inform the consumer of information in accordance with Paragraphs 18 and 19 of this Regulation before the credit contract is concluded; must thoroughly study the borrower's ability to pay before the credit contract is concluded; must not include additional fees, brokerage fees, and other payments prohibited by legislation from being collected from the consumer in the terms of the credit contract; (fifth bullet point of Paragraph 25 was edited by Order No. 16-mh dated July 28, 2021 of the Minister of Justice of the Republic of Uzbekistan (registration number 3313, dated July 28, 2021), effective July 28, 2021, No. 10/21/3313/0724) must provide for the consumer's right to refuse credit free of charge during the period after the contract is concluded and before the customer receives the funds; must provide for the consumer's right to repay the credit early at any time without collecting fine sanctions; must control that the total maximum amount of interest calculated on the credit debt, brokerage fees, and penalties (penalties, fines) does not exceed the amount established by legislation; (eighth bullet point of Paragraph 25 was edited by Order No. 16-mh dated July 28, 2021 of the Minister of Justice of the Republic of Uzbekistan (registration number 3313, dated July 28, 2021), effective July 28, 2021, No. 10/21/3313/0724) must not permit unilateral introduction of changes to the terms of the credit contract leading to restriction of the borrower's rights and/or increase in obligations.

26. It is prohibited for credit institutions to:
    charge interest, collect commissions and penalties (fines, penalties), and apply other measures of liability in the amount of more than half of the annual debt amount under microloan contracts, as well as credit contracts concluded by pawnshops; charge fees for reviewing credit applications, servicing loan accounts, disbursing credits, and collecting penalties for early repayment of credits by individuals and small business entities; accept residential real estate property as collateral for short-term microfinance services provided to individuals; grant credits to individuals in foreign currency and record their obligations on credits in foreign currency; provide new microfinance services to individuals if there is outstanding overdue debt on previously obtained credits that has not been repaid.

27. A consumer-individual has the right to independently choose the form of making payments for the credit institution's financial services.

28. It is prohibited for the credit institution to set different prices (tariffs) for its services depending on the form of payment (cash or non-cash settlement).

29. It is not permitted to establish a requirement that consumers make payments for the credit institution's financial services only through their own cash desks and/or in cash form.

30. A consumer-individual has the right to apply to the credit institution of their choice for a credit regardless of their place of residence.

31. The credit institution must not restrict the right of the borrower and/or pledgor to choose an insurance company and/or appraiser.

32. The credit institution must comply with the following in carrying out credit operations:
    explicitly specify the deadline and conditions for providing credit funds in the credit contract; reflect its liability as a creditor to the borrower for failure to fulfill or untimely fulfillment of the obligation to provide credit funds in the credit contract.

33. The credit repayment schedule attached to the credit contract is an integral part of the credit contract, must be signed by the credit institution and the borrower, and, as a rule, should refer to the attachment (credit repayment schedule) in the text of the credit contract.

34. Interest for using the credit must be calculated by the borrower at the nominal rate specified in the credit contract relative to the remaining principal sum of the credit actually granted to the borrower.
    In this regard, interest for using the credit is calculated starting from the date the credit sum was transferred to the borrower's account or another account indicated by the borrower, or given to the borrower in cash form.

35. If the credit institution completely or partially refuses to grant the credit envisaged in the credit contract, it must send a written notice to the borrower without delay from the next working day after the date the decision to stop providing funds for this credit is adopted, informing them that the credit is stopped and the reasons for it.

36. The type of interest rate for using the credit (fixed or variable interest rate) and the method of paying the principal sum and interest of the credit (differential or annuity) must be envisaged in the credit contract according to mutual agreement of the parties.

37. The credit institution carries out the collection of credit debt in the manner and on the grounds envisaged in the credit contract and legislative acts.
    (first bullet point of Paragraph 37 was edited by Order No. 16-mh dated July 28, 2021 of the Minister of Justice of the Republic of Uzbekistan (registration number 3313, dated July 28, 2021), effective July 28, 2021, No. 10/21/3313/0724) To collect credit debt, the credit institution appropriately notifies the debtor of the need to repay the debt and the consequences of non-performance of obligations on the credit. The notice regarding debt must contain brief information for the debtor about the amount of debt, showing the principal debt sum, calculated interest, brokerage fee, penalty (penalty, fine), and other payments (if any). Handing over the notice and making oral reminders via telephone between 20:00 and 08:00 local time is not permitted.

38. If funds received from the debtor for the current payment of the credit exceed the amount specified in the credit repayment schedule, the credit institution directs the excess part of the received funds to repay the principal debt of the borrower's credit (loan) and recalculates the credit (loan) sum, unless otherwise established by the contract.
    If, after the credit repayment schedule is formalized, the dates or terms of financing the credit change, or the variable interest rate envisaged in the contract changes, or the terms of the credit contract are reconsidered between the parties (including restructuring of the credit), or the borrower partially repays the credit early, causing changes in the dates and deadlines for making payments on the credit or the amounts of interim credit payments, the credit institution must re-formalize the credit repayment schedule and present it to the borrower. In this regard, with the re-formalization of the credit repayment schedule, the previously existing credit repayment schedule loses its force. This rule must be recorded in the credit contract.

39. The microcredit organization must, without delay from three working days starting from the date the borrower fully fulfills the obligation to pay the debt amount on the credit (loan) based on the contract:
    unfreeze the property held in pledge; take measures to remove the entry regarding the credit institution's rights to the pledged property from the pledge register.

Section 2. Minimum Requirements for Providing Services to Consumers

40. The credit institution:
    must create opportunities for all consumers to use the information disclosed at the service locations specified in Paragraph 15 of this Regulation throughout the entire working time; ensure that information is placed in a way that allows consumers convenient and barrier-free access; ensure that credit institution employees (hereinafter referred to in the text as administrators) who work directly with consumers have visual identification tools displaying the employee's surname, name, and position, which are visible to consumers; ensure the opportunity to conclude contracts with consumers, including disabled and limited-mobility consumers, at the location intended for providing credit institution services.

41. Administrators must be able to present in simple form the minimum volume of information provided to the consumer envisaged in this Regulation and create opportunities for the consumer to familiarize themselves with the credit institution's documents containing such information.
    The credit institution must ensure that administrators have the opportunity to obtain, study, and update the information specified in Paragraph 15 of this Regulation.

Chapter 4. Carrying Out Relations Between Credit Institutions and Consumers in Case of Debt Emergence

42. In case of overdue debt arising under the credit contract, with the aim of preventing the consumer's debt burden from further increasing, the credit institution must notify the consumer within seven days from the date the overdue debt arose, attaching the repayment schedule, using any communication method agreed upon in the credit contract, including electronic communication means or other methods envisaged by legislative acts.

43. The credit organization must notify the consumer about the case of non-fulfillment by the consumer of the obligation to repay overdue debt under the consumer credit contract, taking into account the requirements of legislative acts, including the deadline, amounts, composition, and consequences, and must inquire about the reasons for the emergence of overdue debt from the consumer.
    (Paragraphs 42 and 43 were edited by the Order of the Minister of Justice of the Republic of Uzbekistan dated July 28, 2021, No. 16-mh (Registration No. 3313, 28.07.2021) — effective 28.07.2021, No. 10/21/3313/0724)

44. In case of violation by the consumer of the deadlines for repayment of the principal amount of the debt and (or) payment of interest under the consumer credit contract, the credit organization delivers its claim regarding the resolution of the dispute out of court to the consumer in the manner provided for in the relevant credit contract.

45. The claim sent by the credit organization must indicate the following information:

• the name of the credit organization and sufficient information for its identification;
• the amount and composition of the consumer's credit debt as of the date the claim was formalized;
• the method (methods) of debt repayment;
• the deadline by which the consumer must fulfill their obligations (which must not be less than ten days);
• the consequences of the consumer's failure to fulfill their obligations by the deadline indicated in the claim;
• methods for resolving the dispute out of court.

46. The credit organization and the consumer, by mutual consent, have the right to apply methods of resolving disputes out of court established by legislative acts, including through negotiations.
    (Paragraph 46 was edited by the Order of the Minister of Justice of the Republic of Uzbekistan dated July 28, 2021, No. 16-mh (Registration No. 3313, 28.07.2021) — effective 28.07.2021, No. 10/21/3313/0724)

47. If the consumer fails to fulfill the claims indicated in the claim regarding the resolution of the dispute out of court within the deadline specified in the claim, the credit organization has the right to appeal to the court with a lawsuit.

Chapter 5. Requirements for the Consideration of Consumer Complaints

48. The credit organization must have a procedure for considering consumer complaints. In this regard, the procedure for considering consumer complaints must comply with this Regulation and legislative acts.
    (Paragraph 48 was edited by the Order of the Minister of Justice of the Republic of Uzbekistan dated July 28, 2021, No. 16-mh (Registration No. 3313, 28.07.2021) — effective 28.07.2021, No. 10/21/3313/0724)

49. Information about the procedure for considering complaints by the credit organization must be posted on the credit organization's stands and on its official website (if available).

50. At the consumer's request, the credit organization must explain the procedure for considering complaints to the consumer.

The credit organization ensures the timely and impartial consideration of complaints and notifies the complainants of the results.

51. The credit organization has no right to restrict the consumer's right to appeal. The consideration of consumer complaints by the credit organization is carried out free of charge.

It is not allowed for the credit organization to refuse to accept a complaint.

52. The credit organization must organize the acceptance of consumers' electronic complaints through its official website (if available).

53. All written and electronic complaints from consumers must be registered on the same day they arrive; if they arrive after working hours, they must be registered on the next working day.

54. Consumer complaints must be considered and a written or electronic response provided no later than fifteen days from the date the complaint arrives at the credit organization; if additional study and (or) inspection or request for additional documents are required, the period may be extended up to one month.

55. The following complaints are not considered:

• anonymous complaints;
• complaints submitted through representatives of physical and legal persons if documents confirming their authority are not available.

The complainant is notified in the appropriate manner that the complaint was not considered due to the absence of documents confirming the authority of the representative of the physical or legal person.

56. If a complaint is made via telephone, the conversation may be recorded using special (audio) technical equipment with prior notice to the consumer for the purpose of subsequent consideration of this complaint.

57. A complaint received regarding the actions or inaction of a credit organization employee may not be submitted for consideration to that same employee.

58. In cases where the consumer's complaint is found to be justified, the credit organization must take appropriate measures to eliminate deficiencies and restore the consumer's legitimate interests and rights.

59. The credit organization must regularly:

• monitor consumer complaints, analyze, summarize, and generalize the issues raised in them and the dynamics of complaints;
• develop recommendations for improving the work with consumer complaints;
• eliminate identified deficiencies and ensure that such deficiencies do not recur in the future in the credit organization's activities.

Chapter 6. Final Provisions

60. Persons guilty of violating the requirements of this Regulation are held liable in the manner established by legislative acts.
    (Paragraph 60 was edited by the Order of the Minister of Justice of the Republic of Uzbekistan dated July 28, 2021, No. 16-mh (Registration No. 3313, 28.07.2021) — effective 28.07.2021, No. 10/21/3313/0724)

61. This Regulation has been agreed upon with the Chamber of Commerce and Industry of the Republic of Uzbekistan.

Chairman of the Chamber of Commerce and Industry of the Republic of Uzbekistan A. IKRAMOV

June 27, 2020

Regulation on Minimum Requirements for the Activities of Microcredit Organizations and Pawnshops in Relations with Financial Services Consumers

APPENDIX

Information Sheet on the Main Terms of Credit
*

Name of the Microcredit Organization

This sheet is filled out by
(First Name, Last Name, and position of the microcredit organization specialist)

Date of completion

Section I. Information on the Credit

1. Purpose (type) of the credit

2. Currency of the credit to be issued

3. Amount of the credit

4. Term of the credit

5. Interest rate of the credit
   (in nominal terms)

---

(in percent)

---

(in monetary terms for the full term of the credit)

6. Total cost of the credit
   (includes the nominal interest rate and costs for servicing the credit)

7. Frequency of payments
   (every month, every quarter, etc.)

8. Method of credit repayment
   (annuity method (equal amounts), declining balance method, etc.)

9. Amount of a one-time payment during the payment period

---

(under the annuity method)

10. Additional costs associated with the credit, including:

---

(in monetary terms for the full term of the credit, total)

Types of commissions and fees of the microcredit organization (to be indicated separately) __________________________________ (in monetary terms for the full term of the credit)

Third-party services
(to be indicated separately)

---

(in monetary terms for the full term of the credit)

Read carefully before agreeing to take a credit!

• This sheet does not replace the credit contract or the application for obtaining a credit; rather, it helps compare the lending conditions of various microcredit organizations and make the necessary choice.

Section II. Other Important Terms

1. Penalty for violation of the terms of the credit contract

---

(percent or fixed amount is indicated, as well as the contractual terms serving as the basis for calculating the penalty)

2. Amount of the increased interest rate payable from the credit amount for failure to repay the debt on time
   (if such a condition exists)

---

(in percent)

3. Collateral for the credit
   (minimum requirements for the subject of collateral, minimum value of the pledge)

The information provided in Sections I and II of this information sheet is not final and may be changed in the credit contract.

Section III. List of Documents to be Submitted for Obtaining a Credit

1.

2.

...

Section IV. Your Rights as a Future Borrower

1.
You are free to choose the microcredit organization and their services.

2.
You have the right to refuse to sign a credit contract or other contracts and agreements.

3.
You have the right to demand that the credit contract be formalized in the state language.

4.
You have the right to receive a draft of the credit contract to review and consult on it outside the microcredit organization.

5.
You have the right to obtain full and detailed information from the microcredit organization regarding the terms and cost of the credit, the procedure for payments and settlements (interest, fines, and penalties), your rights and obligations under the credit contract, the risks and liabilities that may arise under the credit contract, as well as on other issues that are unclear to you.

6.
After signing the credit contract, but before the funds are actually received, you have the right to refuse to take the credit without any payments. Employees of the microcredit organization are not entitled to assist in obtaining a credit for a fee.

If you have complaints, you can send your complaint (phone number is indicated) to the landline or (postal address of the microcredit organization is indicated) to the address or (electronic mail address of the microcredit organization is indicated) to the electronic address.

The correctness and authenticity of the information sheet are confirmed.

---

---

(First Name, Last Name, and position of the microcredit organization specialist) (Information of the National Database of Legislation, 30.06.2020, No. 10/20/3262/1091; , 28.07.2021, No. 10/21/3313/0724 )