October 21, 2009
Savings pulse of credit institutions
The safety reserve of the domestic banking system is strengthening and developing, accomplished with the initiative of President Islam Karimov. Customers more boldly trust their free cash to the banking sector.

This is evidenced by a steady flow of household savings to banks. According to the Central Bank of the Republic of Uzbekistan, as of October 1, 2009, the amount of borrowed funds from private individuals in credit institutions, in comparison with the same period of the last year, has increased by 68.8 per cent. If to compare with the year 2000, this important indicator rose by 140.9 percent.

In turn, the banking sector is accumulating the savings of the population and enterprises, transforming them into loans and investments.

Modernization of savings policy, which is due to the special attention of the country’s leadership to this issue, has been actively conducted in the country in recent years, and has turned to be a success. And the success of bank deposits has been achieved, as you know, when they are able to meet the basic needs of investors: save money and make a profit. No less important is trust.

At the initiative of the Head of State, there were issued a series of decrees and regulations that are crucial for the development of the banking sector.

On November 28, 2008 the President issued a decree “On additional measures to guarantee the protection of citizens’ deposits in commercial banks of Uzbekistan”. It was announced that funds of individuals placed on deposit accounts in commercial banks, are protected by the state. In accordance with the Law of the Republic of Uzbekistan “On guarantees of protection of citizens’ deposits in banks” they provide credible assurance of compensation in full, regardless of the size of the deposits.

In a document adopted on April 6, 2009, the Resolution of President of the Republic of Uzbekistan “On additional measures to further stimulate the attraction of free funds of population and economic entities on deposits in commercial banks”. A wide range of measures were taken, in addition to the establishment of strict monitoring to ensure the issuance of cash from deposit of the population on demand of clients, which facilitated growth of long-term deposits and further development of cashless payments.

Established in 2009, the minimum level of interest rates on deposits of the population for more than 1 year in an amount not less than 150 percent from the current rate of the Central Bank, and by means of plastic cards of individuals – in an amount not less than the current refinancing rate, it was a good incentive for the market for long-term savings. (Central Bank refinancing rate – the basis of the interest policy of the banking system – in 2009 it is 14 per cent).

Many investors have become more confident in the forecasts and increased the “planning horizon” to a year or more. On 1 October 2009, there were more than 300 types of deposits in national currency – from “Istiqlol-1”of Open Joint Stock Commercial Bank “Uzpromstroybank” and “Muallim” of Open joint-stock commercial bank “Qishloq Qurilish Bank of maturity period of 3 months and rate of 30 per cent per annum respectively and “Taraqiyot” of Open joint-stock commercial bank “Uzpromstroybank” for 3 and 5 years at 26 and 30 per cent per annum.

The growth of income deposit accounts from available funds of the population in national and foreign currency testifies the strengthening of trust and partnership between the banks and depositors. This allows banks to strengthen their resource base and to send additional funds to invest in major economic projects that will contribute to further development of our country with strong production potential.

Source: www.UzA.uz


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