Tashkent, Uzbekistan (UzDaily.com) -- Since 2017, the Government has been implementing bold reforms to build a sustainable market-based economy. In the banking system, the legislation has been reformed, and the Government has decided to halt the directed-lending practices and introduce market-based principles, Hideki Mori, World Bank Country Manager for Uzbekistan, said.

He noted that the recently adopted Strategy for Reforming the Banking System of Uzbekistan in 2020-2025 is a significant step forward to building a stable, effective, and modern banking system. It aims at the improvement of micro and macroprudential oversight of the financial sector, the privatization and restructuring of state-owned banks, the development of the ecosystem of non-bank financial providers, and the adoption of a comprehensive strategy to foster financial inclusion. These measures would make the banking and financial sector more stable, effective, transparent, and client-oriented.

The COVID-19 pandemic may slow down the implementation of the Strategy. However, the Strategy puts the reforms in the right direction and will transform local banks into a critical driver of Uzbekistan’s economic growth, Hideki Mori added.

“The World Bank has been pleased to support the Central Bank and the Ministry of Finance in drafting the Strategy, using our knowledge and analysis of international best practices. And it will continue to assist the implementation of the Strategy, for example, the preparation of relevant legislative acts such as the Draft Law on Non-Bank Financial Intermediaries and the Draft Law on Bank Resolution,” he underlined.

Another area of support will be the restructuring and the privatization of state-owned banks through open and transparent international tenders to attract financially sound, experienced, and reputable strategic investors, Mori said.

“Finally, support will continue for the improvement of banking system oversight and for the development of a National Financial Inclusion Strategy to expand the access of citizens and SMEs to banking and financial services,” the World Bank official said.