State allocates almost US$1 billion to the authorized capital of banks
22/11/2018 23:02
State allocates almost US$1 billion to the authorized capital of banks
22/11/2018 23:02
Tashkent, Uzbekistan (UzDaily.com) -- On 22 November, a videoconference meeting was held under the chairmanship of the President of the Republic of Uzbekistan Shavkat Mirziyoyev on reforming the banking system and strengthening the financial stability of banks, increasing the role of commercial banks in regional development and entrepreneurship.
Loans are a necessary resource for development of entrepreneurship, production and infrastructure. Therefore, in economic processes, the role of commercial banks attracting available funds and lending them to entrepreneurs and investors is very important.
As a result of the systemic measures taken in this direction over the past two years, the scale of lending by banks of investment projects has increased significantly, the loan portfolio increased by 3.2 times. As part of regional development programs, 6.4 thousand projects received loans for 27 trillion soums.
At the meeting, along with positive results, a number of problems in the banking system were noted. This is evidenced by the receipt in the current year in the Virtual and People’s Reception of the President over 24 thousand appeals regarding the banking sector.
The meeting addressed the issue of problem loans. Although their volume is less than 1.8 percent of total loans, this indicator has grown since the beginning of the year. In the regions, 76 percent of problem loans accounted for the city of Tashkent, 5 percent for Kashkadarya and 3 percent for the Bukhara region.
It was also indicated that due to the imperfect development of some projects by khokimiyats and industries, a number of objects were not put into operation in a timely manner and as a result, the return of loans was delayed.
In particular, the meeting criticized the fact that in Tashkent, Samarkand, Jizzakh, Surkhandarya regions and the Republic of Karakalpakstan implementation of some investment projects for which credit funds have already been allocated has not yet begun.
The number of bad debts is growing due to the allocation of loans for the repair of the housing stock and the construction of housing without a full study of the sources of repayment and sufficiency. For example, there are bad loans for a large amount related to partnerships of private homeowners and the construction of multi-storey buildings. The highest rates in the city of Tashkent are 32 billion soums, the Kashkadarya region is 27 billion soums, Andijan region is almost 20 billion soums, and Bukhara region is 14 billion soums.
The head of state underlined that the repayment of problem loans will further expand the capabilities of banks, and when collecting them, the joint work of heads of banks, enterprises, companies and associations, regions and debtors is necessary.
Insufficient activity of banks in attracting resources for loans was underlined. Attracting free funds of the population and legal entities, primarily in term and savings deposits, contributes to the financial stability of banks.
The President noted the need for a broader attraction and activation of the development of credit lines of international financial institutions.
The situation, in which the authorized capital of commercial banks, increases mainly due to the state share, while private sector funds are practically not attracted, has been seriously criticized.
Over the past two years, the state allocated almost US$1 billion to the authorized capital of banks. Despite the measures taken, the authorized capital of almost all banks with state shares, including Qishloq Qurilish Bank, Uzpromstroybank, Asaka Bank, and Agrobank, Microcreditbank, Alokabank and Ipoteka Bank, the share of shares of individuals and legal entities has decreased sharply. In this regard, it was noted the need to actively attract private sector funds in the authorized capital of banks.
At the meeting, attention was paid to the inadequate work of the supervisory boards of commercial banks to determine areas of strategic development and to improve their operations. In this regard, the Central Bank and the Ministry of Economy of the Republic of Uzbekistan have been told to critically examine the activities of the supervisory boards of banks under the jurisdiction of the state, to review the composition of the boards and increase their effectiveness. It was entrusted to attract highly qualified specialists from abroad to improve the activities of financial institutions.
President underlined the need for a significant increase in the volume of microcredits for the development of entrepreneurship, the provision of employment, and the simplification of the procedure for their allocation.
On the issues discussed at the meeting, the information of the responsible persons was heard.
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