President Shavkat Mirziyoyev chaired a meeting on the implementation of the Banking System Reform Strategy for 2020–2025 and accelerating the transformation of banks, the presidential press service said.
Shavkat Mirziyoyev noted that the Strategy was aimed at increasing private sector stakes in banking assets from 15% to 60% by 2025.
He indicated that it was imperative to step up the process of bank transformation.
Currently, six banks - Ipotekabank, Uzpromstroybank, Turonbank, Asakabank, Alokabank and Agrobank have begun cooperation with international financial institutions in the areas of financial diagnostics, development of long-term strategies and privatization. However, the transformation of other banks is not progressing well enough, the president said.
To change the situation, he instructed to conduct an inventory check of functions not inherent to banks, to organize training programs at the Corporate Retraining Center at the Central Bank to clarify the goals of the banks transformation, primarily for local bank employees.
The meeting discussed issues of improving the quality of the loan portfolio and bank projects. It was indicated that the share of problem loans, as shown by the results of stress tests, can increase several times, which is a serious challenge for the banking system.
In this regard, the President gave instructions to analyze problem loans in provinces and create an effective mechanism to maintain the quality of loan portfolios. He emphasized that after the inventory check of banks' loan portfolios, the Central Bank should develop specific measures to restore the financial capabilities of each client in a difficult situation.
The Central Bank monitors cash flows monthly, tracking the economic activity of enterprises, which is growing every month. At the same time, for some enterprises, revenue remains at a low level, and therefore they need more time to recover. It is predicted that a number of enterprises will not be able to service their loans after October 1. However, the forecast of the regulator is reviewed every month in a positive trend, taking into account the resumption and strengthening of business activity in the country, a source in the Central Bank told the Tashkent Times.
Shavkat Mirziyoyev emphasized that bank chairmen should take tough measures to eradicate corruption, introduce compliance control and other effective mechanisms.
He criticized the fact that banks with state assets still have a high share of funds received from the government.
In particular, the share of such loans is 41% in Qishloq Qurilish Bank, 32% in Ipoteka Bank. Last year, credit lines worth about US$ 600 million were attracted under the state guarantee, this year this figure will be US$ 570 million. At the same time, the share of savings and fixed-term deposits of the population in large banks averages only 5%. Given this fact, the Central Bank was instructed to prepare additional proposals for attracting household deposits in banks.
The President emphasized the need for banks to independently attract financial resources without state support.