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Uzbekistan To Increase The State Share In Commercial Banks By $500 Million

Tuesday, June 20, 2017 - 00:51

This week, Uzbekistan intends to increase the state shares invested in the authorized capitals of commercial banks by $500 million in aggregate. This will be done in accordance with the decree signed several days ago by the president of the republic, Shavkat Mirziyoyev. This decision was made with a view to improving the financial stability of the national banking system and further supporting the process of capitalization of commercial banks, which will allow them to expand their participation in financing many investment projects and in supporting the entrepreneurship.

 

The funds needed to increase the state share will be allocated at the expense of the Development and Reconstruction Fund of Uzbekistan. They will be used to finance or co-finance a number of targeted programs for socio-economic development of regions and as financial support to business entities in 2017-2018.

 

In addition, Sh. Mirziyoyev instructed the Central Bank to introduce a mechanism for providing loans to commercial banks without collateral, for a period of up to three months in the event of an acute shortage of liquidity. Such loans will be issued only in order to maintain the bank liquidity and to ensure an uninterrupted payment process. The function of the Central Bank will be to monitor that commercial banks do not redirect these monetary resources to grant loans.

 

The regulator has also received the authority to introduce the guardianship regime over those commercial banks that fail to ensure the smooth execution of client payments after receiving loans without collateral from the Central Bank.

 

Worth recalling, the aggregate capital of Uzbek commercial banks increased by 20.2 percent in 2016. In monetary terms, it amounted to UZS9.35 trillion. In 2016, the total volume of bank deposits increased by 25.2 percent, reaching a level of UZS44.6 trillion.



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http://easttime.info/news/uzbekistan/uzbekistan-increase-state-share-commercial-banks-500-million