On October 9, President Shavkat Mirziyoyev signed a decree on Measures to improve the financial stability of Uzbekistan’s banking sector.
According to the decree, the Ministry of Finance will get the shareholder functions of the stateэы share in banks and will be entrusted to transform banks with a state’s share and to introduce modern management methods in them, including for achieving the following tasks:
- assessment and monitoring over the implementation of objectives and benchmarks defined by banks development strategies, including assessment of the effectiveness of the use of funds aimed at capitalizing banks in line with government decisions;
- taking measures together with the State Assets Management Agency to improve the quality of corporate governance in banks with a state share, including reviewing, if necessary, the composition of supervisory boards, with the establishment of requirements to their authorities for their members, especially in the risk management and internal audit;
- attracting international consultants as advisors to strengthen the supervisory boards of banks, as well as coordinating their interaction with international financial institutions and consulting companies as part of their reform and preparation for privatization;
- development and establishment of performance criteria for executive bodies (boards) in direct proportion to financial efficiency, the quality of investment and loan portfolios, as well as activity in the field of attracting deposits.
Answering questions, the Central Bank Chairman Mamarizo Nurmuratov said that the Ministry of Finance would not attract banks to implement its fiscal policy, shifting to them the possible risks of public debt as part of the implementation of state programs.
Deputy Finance Minister Akhadbek Khaidarov said that the function of a shareholder of a state share in banks was transferred to the Ministry of Finance with aim for effective management of banks.
"Why are we doing that? Previously, the state’s share in banks was in different hands: partly owned by the Uzbekistan Fund for Reconstruction and Development, partly by the State Assets Management Agency, and some by the Ministry of Finance. There was no coordinated policy. Therefore, to improve the efficiency of managing these banks, increase the efficiency of corporate governance, banks should be in the same hands,” he said.