The President Shavkat Mirziyoyev signed the new version of the Banks and Banking Activities Bill into Law on November 5, with immediate effect.
The Law has expanded the list of financial transactions that could be conducted by banks - it includes trust management of property and assets, purchase and sale of refined precious metals, and transactions with derivative financial instruments. The banks are now entitled to outsource certain types of services and operations with the permission of the Central Bank.
The Law has set the minimum authorized capital of banks in the amount of 100 billion soums. Previously, it was determined by the Central Bank.
The Article 7 lists the types of activities that banks are forbidden to engage in, while permissible exceptions described in detail, without reference norms.
The document sets out the requirements for members of the supervisory board, board and key personnel of the bank - they must have an impeccable business reputation, possess the experience, knowledge and skills necessary for the effective management of bank risks. Nominated candidates are agreed with the Central Bank before they assume office.
The Law introduces the definition of banking groups as associations of financial institutions that are not a legal entity in which the main bank controls other financial institutions, as well as the definition of a systemically important bank, the stability of the banking system depends on its activities.
Chapter 7 has been introduced, which describes the measures and sanctions that the Central Bank can apply for violation of banking legislation. Violations are subdivided into gross, serious and minor, and punishment may include revocation of a license, a fine, and the publication of reports of violations in the media.