Central Bank Proposes Obligating Banks to Warn Borrowers of Loan Risks

Tashkent, Uzbekistan (UzDaily.uz) — The Central Bank of Uzbekistan has proposed requiring commercial banks to inform borrowers of potential financial risks when applying for loans. A draft of the proposed changes has been published for public discussion.

Under the draft proposal, advertisements for credit products must feature a prominent warning stating that failure to fulfill loan obligations could result in financial risks. The regulation suggests allocating at least 10% of total advertising space or broadcasting time to this warning.

For loan agreements, a separate requirement is envisioned: the warning must occupy no less than 30% of the primary area on the first page of the document.

The warning text is expected to explicitly clarify that late repayments can lead to an increased debt burden, compulsory collection enforcement measures, asset foreclosures, and the freezing of funds in bank accounts. Additionally, overdue payments can negatively affect a borrower's credit history.

The draft also introduces measures allowing the Central Bank to restrict or prohibit a bank from conducting certain financial operations or expanding its infrastructure for up to six months if a proposed loan product is found to mislead consumers.

The proposed amendments have not yet taken effect and remain open for public review and feedback.