President Shavkat Mirziyoyev signed an updated version of the Guarantees for protection of individuals' deposits in banks Law on Tuesday. According to the Law, the deposit protection limit shall now stand at 200 million soums per depositor in one bank. If a person has deposits in several banks, then each deposit shall be insured separately.
World Bank experts have found that 8 out of 16 international principles of effective deposit insurance are not observed in Uzbekistan. The main problem remains the insufficient protection of deposits by the Deposit Guarantee Fund. This forces clients to focus on high interest rates instead of the financial stability of banks. It is also noted that the People's Bank is not included in the deposit insurance system, since it receives state guarantees, which creates unequal conditions in the market.
The following shall be covered by the protection scheme:
- money in bank accounts and deposits;
- funds awaiting performance of contract terms;
- cash certified by savings (deposit) certificates;
- accrued but not yet paid interest.
While, the following shall be outside the scheme:
- deposits of financial institutions (banks, insurance companies, investment funds, etc.);
- deposits of government bodies;
- accounts related to illegal income (if so ruled by court);
- money in foreign branches of Uzbek banks;
- funds in individual pension savings accounts.
Also, securities such as bank shares, bonds, subordinated liabilities and funds transferred to the bank for trust management are not covered by insurance.
Transitional provisions:
The new rules apply only to deposits opened after the law takes effect. For existing deposits, the previous terms and conditions shall be valid if they relate to time restricted or savings deposits. However, if the deposit amount has surpassed 200 million soums or its term has been extended, the guarantee shall only be valid within the new limit.
Additional changes:
If a bank's license is revoked, the timeline for payments has been cut:
- from 2 months 23 days to 20 days in 2025,
- to 15 days in 2026,
- to 7 days from January 1, 2027.
In the event of a bank's liquidation or reorganization, depositors shall receive additional compensation.
Depositors will be able to withdraw their funds within 6 months without penalties or loss of interest.
The new bank that has become the legal successor is required to notify clients of their right to compensation within 5 days.
Thus, the Law strengthens the deposit protection, reduces the timelines for compensation payments, and introduces new rules aimed at increasing the stability of the financial system.
