Central Bank Demands Bank Clarification on Microloan Insurance

Tashkent, Uzbekistan (UzDaily.uz) — The Central Bank of Uzbekistan has instructed commercial banks to provide detailed explanations to clients regarding insurance conditions when issuing online microloans and other retail credits. The decision follows social media reports concerning potential difficulties with refunding a portion of the insurance premium upon full early repayment of a loan.

According to the regulator's letter sent to banks, the Central Bank is reviewing information indicating that when online microloans are issued, the insurance premium is withheld from the client's account or from the loan amount itself. However, during early repayment, the portion of the insurance premium for the unused period is either not returned or the procedure for its return remains insufficiently clear.

In this regard, the Central Bank has mandated credit organizations to post detailed clarifications on the procedure for providing insurance products on their official websites, mobile applications, and social media networks. Banks must disclose whether the insurance is mandatory or voluntary, the sources of funds used to pay the insurance premium, which insurance companies participate in the program, and whether a partial refund of the insurance premium is provided upon early repayment of the credit.

Furthermore, the regulator required banks to clarify whether the refund is processed automatically or if the client needs to contact the bank or the insurance company. Banks must also specify the timeframes for the return of funds, the list of required documents, and the application procedure.

If the cases described on social media do not correspond to reality, the Central Bank recommended that banks publish reasoned explanations with a clear description of the current procedure. In the event of technical or organizational difficulties in refunding the insurance premium, credit organizations were asked to openly report these issues and outline the measures and deadlines for their resolution. The regulator emphasized that publications must contain practical recommendations for clients rather than being limited to general statements.

Commercial banks are required to submit information on the work completed and links to the published clarifications to the Central Bank by 16 July 2026.

The regulator's intervention was prompted by a publication on the anonymous Telegram channel Platforma.uz. The authors claimed that when online microloans are processed, the insurance premium is withheld automatically, and clients must independently apply for a refund to recover a portion of the funds after early repayment of the credit. The publication also contained a call to implement an automatic refund mechanism for insurance premiums without the participation of the borrower.