Document from CIS Legislation database © 2003-2020 SojuzPravoInform LLC

LAW OF THE REPUBLIC OF UZBEKISTAN

of April 25, 1996 No. 216-I

About banks and banking activity

(as amended on 06-01-2020)

Chapter 1. General provisions

Article 1. Purpose of this Law

The purpose of this Law is relations management in the field of banking activity.

Article 2. Legislation on banks and banking activity

The legislation on banks and banking activity consists of this Law and other acts of the legislation.

If the international treaty of the Republic of Uzbekistan establishes other rules, than those which are stipulated by the legislation the Republic of Uzbekistan about banks and banking activity then are applied rules of the international treaty.

Article 3. Basic concepts

In this Law the following basic concepts are applied:

bank - the legal entity, being the commercial organization, performing in total transactions on opening and maintaining bank accounts, carrying out payments, attraction of money in deposits (deposits), to loan granting on its own behalf determined as banking activity;

banking group - merging of financial institutions, not being the legal entity in whom the main bank controls other financial institutions;

the bank account - the account opened by bank for the client according to the agreement under which the bank shall accept and enlist the money arriving into its account carry out orders of the client about transfer and issue of the corresponding money and carrying out other account transactions;

steady financial condition of bank - the condition of bank characterizing balance of financial flows, sufficiency of means for maintenance of solvency, liquidity and profitable activities and also accomplishment of all prudential standard rates by bank;

the indirect owner (acquirer) - the person holding shares (acquiring shares) bank by means of other person over whom exercises control;

key personnel - the employees of bank who are not board members whose positions allow them to have significant effect on activities of bank;

expected acquisition - the decision made by the potential acquirer on acquisition or increase in essential shareholding of bank;

the final beneficial owner - physical person which directly or indirectly owns the legal entity who is the potential acquirer or the direct or indirect shareholder of bank or controls it;

prudential supervision - the supervision exercised by the Central bank of the Republic of Uzbekistan behind activities of banks for the purpose of prevention and reducing specific risks of banking activity;

the regulatory capital - the capital of bank determined in the settlement way for the purpose of banking regulation and implementation of calculation of prudential standard rates;

systemically significant bank - bank on which activities banking system stability depends;

foreign bank - the legal entity, being bank by the legislation of foreign state in the territory of which it is registered;

essential ownership - immediate or indirect possession by person or persons acting jointly, at least than five percent of authorized fund (authorized capital) of the legal entity acquired as a result of one or several transactions.

Article 4. The state body regulating the sphere of banking activity

Central Bank of the Republic of Uzbekistan (further - the Central bank) is the state body regulating the sphere of banking activity and performing powers on licensing, regulation and prudential supervision.

Article 5. Financial transactions

Treat the financial transactions performed by banks:

attraction of money in deposits (deposits);

implementation of payments, including without opening of bank accounts;

opening and maintaining bank accounts of physical persons and legal entities, including correspondent accounts of banks;

provision on the terms of recoverability, the paid nature and urgency of the credits on its own behalf at the expense of own and raised funds;

transactions with foreign currency in cash and non-cash forms;

property trust management under the contract with physical person or legal entity;

collection and cash servicing;

issue of guarantees and adoption of other obligations for the third parties providing execution of their obligations;

acquisition of right of the requirement from the third parties of obligation fulfillment in cash (factoring);

release, purchase, sale, accounting and storage of securities, the securities management under the contract with the client, making of other transactions with them;

acquisition and sale of the affined precious metals, including account management of safe custody of metals and the depersonalized (not physical) accounts of metals;

purchase and sale of coins from precious metals;

implementation of transactions with derivative financial instruments (derivatives);

provision in lease of special rooms or the safes which are in them for document storage or values;

leasing provision;

issue of loans in forms, stipulated by the legislation;

rendering the consulting services connected with financial transactions;

portfolio management of assets;

release, use and repayment of electronic money;

issue of bank cards and payment processing, servicing of bank cards together with other organizations, including other financial institutions.

Banks perform also other financial transactions according to the legislation on banks and banking activity.

Banks have no right to perform the financial transactions which are not specified in the license for the right of implementation of banking activity.

Article 6. Contribution (deposit)

Contribution (deposit) is made money, in total corresponding to the following conditions:

are subject to return upon the demand of the client or after term with percent or other income either without those or on the conditions approved between the investor or his authorized representative and bank accepting money;

do not treat subordinated debt, rights of possession or services, including insurance services;

are supported in writing by the relevant document of the bank accepting money.

In deposits (deposits) only banks have the right to be engaged in activities for attraction of money.

Article 7. The activities forbidden or limited for banks

Banks have no right to be engaged directly in the productive, trading, insurance and other activity which is not connected with implementation of financial transactions, stipulated by the legislation about banks and banking activity.

The restriction specified in part one of this Article does not extend to cases:

sales or provisions in lease of the specialized equipment and the software to it used in systems of clearing settlements on the basis of bank cards;

sales of own assets;

release, realization and distribution of checkbooks;

implementation of activities for the organization of the conclusion of the insurance contract on behalf of insurance companies - residents of the Republic of Uzbekistan;

provisions in lease to legal entities in whom the bank is founder, own property according to the agreement of property hiring (lease).

Banks are forbidden to create legal entities and (or) to acquire shares or shares in authorized funds (authorized capital) of legal entities, except for:

the legal entities performing credit, insurance and leasing transactions on professional basis;

legal entities, being part of infrastructure of the financial market or rendering to banks information and consulting services;

the legal entities performing professional activity in the security market;

the affiliated organizations of bank abroad created for the purpose of release and securities placement under guarantee of this bank;

legal entities whose exclusive activities is collection;

the legal entities rendering services in ensuring interaction between participants of calculations for banking activities including calculations for transactions with bank cards;

stock and currency exchanges;

credit bureaus;

joint-stock companies in the secondary security market in the amount of no more than twenty percent from the placed shares included in listing of stock exchange.

Acquisition by bank of shares or shares in authorized fund (authorized capital) of one legal entity according to part three of this Article shall not exceed fifteen percent of the regulatory capital of bank of the first level. This restriction also extends to ownership of bank of shares or shares in authorized fund (authorized capital) of the specified legal entities, including in cases of their creation.

Implementation of security transactions by banks, acquisition of shares or shares in authorized fund (authorized capital) of legal entities in total shall not exceed fifty percent of the regulatory capital of bank of the first level.

If ownership of bank of shares or shares in authorized fund (authorized capital) of legal entities exceeds the amounts specified in parts four and the fifth this Article, the bank shall sell the exceeding part within one year.

The bank is forbidden to participate in authorized fund (authorized capital) of the legal entity owning one or more percent of the authorized capital of this bank.

Requirements of this Article do not extend to cases of acquisition by banks of shares of other bank or other securities which holder is other bank, or shares or shares in authorized funds (authorized capital) of the legal entities belonging to other bank when carrying out reorganization by them in the form of merge or accession.

Article 8. Independence of banks

Banks are independent in decision making, the financial transactions connected with implementation.

State bodies and their officials are forbidden to interfere with activities of banks, including with management of the entrepreneurial risks connected with forming of credit portfolio and assets of banks, appointment of leading employees of banks and also to require different payments and fees at the expense of the means of bank, except as specified, provided by this Law.

Article 9. Differentiation of obligations of the state and banks

Banks do not answer for obligations the state, the state does not answer for obligations banks, except cases when banks or the state assume such obligation.

Article 10. Banking associations

Banks for the purpose of protection of the common interests and implementation of joint programs can create associations and other associations if their creation does not contradict requirements of the legislation.

Banking associations can create the organizations for exchange of information and the joint solution of the other questions connected with implementation of banking activity.

Banking associations in ten-day time after their registration by authorized state body or decision making about liquidation notify on it the Central bank.

Article 11. Bank name

The term "bank" or phrases with this term are used in trade name or the trademark (service mark) only by legal entities having the license for the right of implementation of banking activity.

The legal entities having the license for the right of implementation of banking activity shall include the term "bank" in the trade name.

Article 12. Founders of bank

Legal entities and physical persons - residents, and also nonresidents can be founders of bank.

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