The power of trust
The fifth plenary session of the Senate of Oliy Majlis of the Republic of Uzbekistan continued its work on April 1, 2016.
The second day of the plenary session the senators began work with a status report on the activities of the Central Bank of the Republic of Uzbekistan in 2015. It was noted that the activities of the Central Bank for the previous year was carried out in accordance with the Law "On the Central Bank of the Republic of Uzbekistan" and was aimed at the unconditional fulfillment of the tasks defined by the President of the Republic of Uzbekistan Islam Karimov at the meeting of the Cabinet of Ministers dedicated to the results of socio-economic development in 2014 and major priority directions of economic program for 2015, and the relevant resolutions of the Senate of the Oliy Majlis adopted in the previous reports of the Central Bank.
According to senators, in the reporting year, as a result of measures on the increase of capitalization of banks, strengthening liquidity and growth of the deposit base, high ratings and growth of volumes of investments into the real sector of the economy were achieved. Achieved in the banking system indicators are not only consistent with international generally accepted standards, but also exceed some of them.
The past year saw further strengthening of the banking system, an increase of the level of capitalization and expansion of investment activities of banks. Aggregate capital of banking system in comparison with 2014 increased to 23.3 percent and reached 7.8 trillion soums. Over the past 5 years, this indicator has been increased by 2.4 times. The capital adequacy ratio of the banking system of the country is almost 24%, which is 3 times higher than the generally accepted minimum international standards established by the Basel Committee and its liquidity – twice higher than the highest indicator ratings.
Total assets of banks in the reporting year increased by 25.1 percent and as of 1 January 2016 amounted to 65.2 trillion soums.
Monetary policy in 2015 contributed to the level of inflation calculated by the consumer price index (CPI). Compared to 2014, the inflation rate (6.1 percent) decreased by 0.5 percentage point and amounted to 5.6 percent.
The total volume of loans channeled by the commercial banks towards the real sector of the economy rose by 27.3 percent. The loans granted at the expense of internal funds in the total amount of credit portfolio of commercial banks comprised 86.7 percent, of which 79.8 percent – long-term loans for investment purposes.
The expansion of the volume of investment loans for the modernization of economy branches and investment projects, technical and technological re-equipment were of great importance. In 2015, the commercial banks for these projects allocated loans in the amount of 10.2 trillion soums, which is 20 percent more compared with 2014.
At that, a financial and economic stability was ensured, as a result of implementation of the investment policy of the banking system through supporting modernization and technical and technological renewal of the economy, a sharp rise of its competitiveness, increase of the export potential, organization of new productions based on innovative and energy-saving technologies, the development of the production of demanded in the world market new products.
During the reporting period, the amount of allocated loans to small business entities compared to 2014 increased by 1.3 times.
Particular attention was paid to the financial support of business projects of graduates of professional colleges. To start their own business and practice acquired modern skills and knowledge they were allocated 280 billion soums, or 1.3 times more than in 2014.
The range of the banking services is expanding from year to year. Thus, the volume of rendered services to clients in the past five years has grown by 3.5 times, including in 2015 – 1.3 times.
The stability of the banking system, the growth of confidence, increase in incomes were the key to attracting the free funds of the population and economic entities into deposits.
The reforms carried out in the banking system in 2015, became a major factor in ensuring a stable high rate of growth of the economy and increased welfare of the population.
The positive results achieved in the banking system of the Republic have also been reflected in the ratings of international rating agencies. In the past six years, the rating Agency “Moody's” has been assigning the Uzbek banking system a rating of “Stable".
According to the World Bank, Uzbekistan is currently in the first TOP ten countries in the world, which last year achieved the best results in improving the business environment for entrepreneurial activity. In particular, in the ranking "Doing business" by such criteria as "supporting new businesses" and "loans towards small businesses" Uzbekistan over the past three years has risen from 154-th to 42-nd place, having improved just in the last year its rating at 63 positions.
It was noted that this year the Central Bank of the Republic of Uzbekistan has continued to pursue its prudent monetary policy, efforts have been made to increase the capital of the banking system, to ensure the volume of deposits of the population and businesses in banks, wide application of information and communication technologies and the amount of rendered banking services, as well as the introduction of new recommendations of the international Basel Committee into the banking supervision system.
During the discussion of the report, senators expressed their proposals and recommendations aimed at further improving the activities of the Central Bank of the Republic of Uzbekistan. In particular, it is recommended to increase the effectiveness of supervision of banks and other financial institutions for the purpose of maintaining the stability of the financial and banking system, protection of interests of depositors, borrowers and creditors, to strengthen the resource base of banks at the expense of attraction of funds of the population and economic entities on long-term deposits, stimulate the development of small business and private entrepreneurship, increase the investment activity of banks, as well as the financing of projects under programs of socio-economic development of regions.
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