Tashkent, Uzbekistan (UzDaily.com) — At a recent plenary session of the Legislative Chamber of the Oliy Majlis, deputies reviewed the bill titled “On Deposit Protection Guarantees in Banks”.

It was noted that not all commercial banks in Uzbekistan are included in the deposit guarantee system. In particular, the People’s Bank, which serves the largest number of individuals, is not part of this system, as its deposits are guaranteed by the state. This creates unfavorable conditions for competition in the financial services market.

It was also highlighted that deposits in banks are fully guaranteed by the Deposit Guarantee Fund, allowing depositors to place their funds at high interest rates without assessing the bank’s financial condition and operational risks.

World Bank experts, examining the compliance of Uzbek banks with the "Core Principles for Effective Deposit Insurance Systems," found that the objectives of 8 out of 16 core principles cannot be achieved, or there are rules that contradict these objectives.

The proposed bill aims to reform the deposit insurance system to ensure the long-term stability of the banking system and align it with advanced foreign practices and international standards.

To strengthen public and business trust in the banking system and minimize the negative effects of the economic crisis, the bill establishes an upper limit for guaranteed deposits at 200 million sums. This amount was determined based on an analysis of the current state of deposits and ensures full protection for 99.7% of depositors’ funds in banks.

The initiators of the bill emphasized that banks are not exempt from civil liability due to the limitation of the guaranteed deposit amount and remain responsible to depositors with their assets. This means that depositors can demand the return of their funds exceeding the guaranteed amount from the bank.

During discussions, deputies highlighted the significance of the new provisions in the bill for strengthening public trust in the banking system. They also shared their opinions and suggestions for further improving the bill.

According to the deputies, the adoption of this bill will ensure the stability of the banking system, protect the funds of the public and businesses, allow for conducting business without fears of losing funds in the event of bank closures, and enhance public trust in the banking system.

The bill was approved by deputies in the first reading.