The Board of the Central Bank of Uzbekistan met to discuss the results of the banking system’s development in the first nine months of this year, and the performance of the tasks outlined by the President of the country Islam Karimov at the government meeting on 12 February 2007, and the tasks set at the meeting of the Cabinet of Ministers held on 16 October 2007.

The Chairman of the Board of the Central bank of Uzbekistan Fayzulla Mullajanov presided at the meeting. It was noted that in the reporting period, some positive results have been achieved through the measures to intensify and expand the banking system reforms.

The total capital of the banks in Uzbekistan made up 1.25 trillion soums at the end of the third quarter, which constitutes a growth of 21.6% compared to the first nine months of 2006.

At the same time, to ensure the execution of the Presidential resolution of 12 July 2007 "on measures to further raise the capitalization of banks and activate their participation in the investment processes on modernization of the economy", additional shares for 230 billion soums will be floated by the end of this year, which should raise the capitalization of banks by 40% to 1.5 trillion soums. At this time, measures are being taken to meet this target.

As a result of the measures taken, today the balance of the banks’ credit investments in the basic sectors of the economy makes up about 4.92 trillion soums, of which 64% is in investment projects.

In the reporting period, the volume of investment credits issued to the real sector of the economy increased by 38.3% compared to the same period of the previous year to 2.605 trillion soums.

This includes some 679 billion soums appropriated for investment purposes in the reporting period, including 484 billion soums in national currency and the equivalent of 195 billion soums in hard currency. This exceeds the appropriations made in the previous year by 38.8%.

The loans issued to support small businesses and individual entrepreneurs grew by 51.8% compared to the previous year to 583 billion soums.

It is worth noting that of the total of 32 billion soums extended to small businesses for the procurement of mini-technology and equipment, almost 87% were issued in the form of bank loans.

The volume of loans issued to support farming businesses has grown by 45.2% compared to the same period of the previous year to 903 billion soums.

It was noted that in the reporting period measures were implemented to further expand and popularise non-cash payments and reduce off-bank circulation of cash. In particular, the number of plastic cards issued into circulation grew by 491,000 compared to the same period of 2006, and the total number of cards in circulation today makes up 3.58 million.

In the reporting period, pursuant to the Presidential decree of 18 May 2007 "On additional measures to provide financial and moral support to young families" the commercial banks of Uzbekistan extended some 57 billion soums to young families in the form of mortgage, consumer and micro-loans on preferential terms.

At this time, the banks offer the population more than 140 types of deposits. Such a diversity of deposit products, has led to the growth in the balance of deposits in banks of 52.3% to 975 billion soums. This confirms the growing trust of the population in the banking system.

At the same time, there remain some critical problems in the banking system. In particular, a number of banks still have low level of capitalization, and some of them are lacking initiative in the investment activity. The participants of the meeting agreed on the tasks and measures that should be implemented concerning this issue in the fourth quarter of this year.

Thus, the priority tasks are – to further reduce the off-bank circulation of cash, and ensure unconditional issuance of cash from clients’ deposit accounts on first request.

Also, the heads of the commercial banks have been tasked to raise the capitalization of their banks and ensure their financial stability, and to activate their participation in the investment processes aimed at modernization of the economy.

These decisions and tasks were then discussed by the participants of the meeting.