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Uzbekistan
Banking and Finance
Uzbekistan began a movement toward a two-tier banking system
under the old Soviet regime. The new structure, which was ratified
by the Banking Law of 1991, has a government-owned Central Bank
wielding control over a range of joint-stock sectoral banks specializing
in agricultural or industrial enterprise, the Savings Bank (Sberbank),
and some twenty commercial banks. The Central Bank is charged
with establishing national monetary policy, issuing currency,
and operating the national payment system. In performing these
operations, the Central Bank manipulates as much as 70 percent
of deposits in the more than 1,800 branches of the Savings Bank
(all of which are state owned) for its own reserve requirements.
A National Bank for Foreign Economic Affairs, established in 1991
as a joint-stock commercial bank, conducts international financial
exchanges on behalf of the government. The national bank holds
Uzbekistan's foreign currency reserves; in 1993 it was converted
from its initial status to a state bank.
In the mid-1990s, the banking structure in Uzbekistan was limited
to only a handful of primarily state-owned banks, and, compared
with Western banking systems, the commercial banking system was
still in its infancy. But the establishment in the spring of 1995
of Uzbekistan's first Western-style banking operation--a joint
venture between Mees Pierson of the Netherlands and other international
and Uzbekistani partners--suggests that this sector, too, may
have prospects for change. The Uzbekistan International Bank that
would result from the new joint venture is intended primarily
to finance trade and industrial projects. The bank is to be based
in Tashkent, with 50 percent of ownership shares in Western hands.
If successful, this and other similar ventures may reward policy
makers' cautious approach to reform by establishing an infrastructure
from which economic growth can begin.
Data as of March 1996
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