Uzbekistan has kept a tight lid over bank transfers as part of the official fight against money laundering, organised crime and terrorist financing, Reuters reported.
A decree published late on Thursday stated that banks would be banned from questioning depositors making transactions using their accounts regardless of their money’s origin and without having to pay any extra tax.
"It will be illegal to ask depositors to offer any documents or any other information proving their funds’ legal origin," said the decree, signed into law by Karimov.
The law will help people legalise their money assets and lead to capital inflows into the impoverished nation where about half the population lives below the poverty line.
Uzbekistan’s banking sector is dominated by the state National Bank for Foreign Economic Activity of the Republic of Uzbekistan which holds 40 percent of all banking assets.
Total retail deposits rose nearly 50 percent in 2007 to US$760 million from 2006. By comparison, the same indicator stood at US$12 billion in neighbouring Kazakhstan in early 2008.