Central Bank: banks have the opportunity to provide car loans
Tashkent, Uzbekistan (UzDaily.com) -- At a meeting held by the Banking Supervision Committee on 12 September 2023 in order to ensure the fulfillment of the supervision tasks of the Central Bank, a decision was made on the state of concentration risk in the loan portfolio of banks.
The Law of the Republic of Uzbekistan “On Banks and Banking Activities” stipulates that banks must, in order to reduce the risk of losses on assets, ensure the diversification of their assets.
At the same time, according to the law, if risks are identified by the Central Bank that affect banking activities, it is envisaged to strengthen the requirements for compliance with established restrictions on certain financial transactions, which can significantly worsen their stability.
A sharp increase in the share of car loans in the loan portfolios of commercial banks issued to individuals led to the formation of a concentration risk and an increase in the impact of possible financial losses in this direction on the stability of commercial banks.
In this regard, in order to protect the interests of depositors and creditors, as well as reduce the negative impact of possible risks on the stability of banks, the Central Bank issued appropriate instructions to commercial banks to ensure the diversification of their loan portfolios.
In turn, these instructions of the Central Bank do not prohibit the issuance of car loans by commercial banks and will not affect the increase in the proposed interest rates on them.
It is worth noting that today banks operating in our country are able to provide car loans and this process is being carried out.