About Fund

A number of measures preceded the creation of the legislative basis of the population deposit protection in banks of Uzbekistan, in particular, the decree of the Cabinet of Ministers in 1995 planned to establish the system of deposit protection from bank bankruptcy. In 1998, the Insurance Fund «Omonat-himoya» was established with the function of deposit insurance.

 

However, the experience of the Fund’s activity, which had been working with commercial banks on a voluntary basis, showed the need to improve its activity and create a better mechanism that covers the whole banking sector.

Adoption in April 2002 «The Law on deposit protection of citizens in banks» in Uzbekistan, it was created the legislative basis for citizens' deposits protection in banks and organization the system of guarantee.

 

The main goal of the Law is to protect the legal rights of the population and to provide their trust to commercial banks. For this aim the decree of the Cabinet of Ministers on September 19, 2002 «On the measures to implement the law of the Republic of Uzbekistan «On guarantees of protection of citizens 'deposits in banks» № 326 the Fund of guarantee citizens' deposits in banks was established.

 

Taking into account that all banks operating in the Republic of Uzbekistan have the right to attract deposits from the population, the Law establishes the mandatory participation of all banks in the deposit guarantee system and the inclusion of banks in the fund’s register.

 

The purpose of the Fund’s activity is to ensure payment of compensation on citizens' deposits in banks in the case of revocation of the bank’s license on the right to conduct banking operations by the Central Bank of the Republic of Uzbekistan.

 

The Fund cannot provide financial support and engage in charitable activities, as well as be the founder of legal entities.

 

The Supervisory Board of the Fund and the executive body of the Fund administer the Fund.

 

 The current supervisory board of the Fund consists of:

• The Deputy Chairman of the Central Bank, the Chairman of the Supervisory Board;
• The Deputy Minister of Finance, the Deputy chairman of the Supervisory Board;
• The General Director of the Association of Banks of Uzbekistan;
• The Deputy Head of Sector of the Cabinet of Ministers;
• The Director of the Department of Prudential Supervision of Credit Organizations of the Central Bank
  
  

The current management of the Fund is being conducted by the executive body, i.e. the Directorate of the Fund, which is responsible for the activity of the Fund.

The directorate of the fund consists of a director, deputy director and chief accountant.

The assets of the Fund are generated at the expanses of obligatory contributions of banks, incomes received from placement of funds, as well as other funds.

Obligatory contributions of the banks to the Fund are one-time fee and calendar fees.

One-time fee of the bank to the Fund is 0.1 percent from the amount of actually formed authorized capital of the bank. Calendar fee is 0.5 percent of the average balance of guaranteed deposits for the last month for the reported quarter.

 

Payment by the banks of calendar contributions shall be stopped when the amount paid for calendar contributions is reached 5 percent of the total balances of the deposits of citizens in banks. If the total amount the balance of deposits of citizens in the bank will be changed the amount of calendar contributions paid to the Fund must be recalculated.

 

In accordance with the law, money is not guaranteed:

• in deposits on which the legislation provides the special procedure of guaranteeing;
• transmitted by citizens to the bank’s trust;
• on the accounts of the bearer;
• placed on the accounts of individual persons engaged in entrepreneurship activities without forming a legal person, if these accounts are opened in connection with noted activities;
• citizens' deposits in banks incorporated under secured obligations to the Bank or the third party;
• placed in foreign branches of banks.

 

In accordance with the current Law, the payment of compensations on deposits of citizens is carried out in full at the expense of the bank and the Fund, based on the balance of deposits reflected in the interim final balance sheet of the bank, approved in the prescribed manner.

The law stipulates that in case of insufficient resources of the Fund to pay compensation for deposits of citizens, by decision of the Government, the Fund is granted a loan with its subsequent return from the proceeds to the Fund.

 

In accordance with the law, in the event of revocation of a license, the assets of a bank being liquidated are used as a matter of priority to pay off debt on deposits of citizens.

If the funds of the liquidated bank are not enough to pay off the debt on deposits of citizens, the bank refers to the fund. The Fund within three days from the date of receive the necessary documents publishes message in mass media about the order and time of the payment of compensation for citizens' deposits in banks.

The Fund is obliged to begin payment of compensation for citizens' deposits in banks, within ten days from the date of publication of the notice in mass media.

 

Payment is made by agent bank determined by the Fund with the consent of the Central Bank.

 

Reimbursement for citizens' deposits in banks in foreign currency is made in the national currency at the rate of the Central Bank on the day of license revocation.

 

Compensation of citizens’ deposits in banks also is paid to the legal representatives of depositors or their legal successor, upon presenting the relevant documents.

 

 

In December 2021, the Fund became a full member of the International Association of Deposit Insurers.