Deposit guarantee

In accordance with the Law 'On Guarantees for the Protection of Citizens’ Deposits in Banks' dated February 18, 2025, it regulates the procedures and mechanisms for guaranteeing deposits of individuals, sole proprietors, and legal entities in banks across the country.

In accordance with the Law, the following deposits are not subject to guarantees:

• Deposits of banks, non-bank credit institutions, leasing companies, insurance companies, investment and mutual funds, as well as other financial organizations operating under a relevant license or permit issued by an authorized body of the Republic of Uzbekistan or a foreign state, or operating based on notification to the authorized bodies;

• Deposits of state organizations and enterprises, as well as government bodies of the Republic of Uzbekistan or foreign states;

• Deposits of related parties of the bank, except for deposits of board members and key personnel, provided that the amount does not exceed their salary and equivalent payments for the last 3 months;

• Deposits in the bank’s subsidiaries or branches located abroad;

• Funds accumulated in individual pension savings accounts;

• Funds obtained from activities related to the legalization of income derived from criminal activity, financing of terrorism, and financing the proliferation of weapons of mass destruction, as confirmed by a court decision that has entered into legal force.

In accordance with the Law, the deposits subject to guarantees include deposits of individuals, including sole proprietors, as well as legal entities, held in banks in the national currency of the Republic of Uzbekistan or in foreign currency.

For the purposes of determining the scope of guarantee, a deposit is considered to include:

• The balance of funds deposited in the bank under a bank deposit agreement or bank account agreement, including funds held in separate accounts until the relevant conditions of the agreement are fulfilled (escrow service), as well as amounts certified by a savings (deposit) certificate;

• The balance of interest under a bank deposit agreement or bank account agreement that has been accrued but not paid before the occurrence of a guarantee event, if the accrual of such interest is provided for in these agreements, as well as the balance of accrued but unpaid interest specified in a savings (deposit) certificate.

The following are not considered deposits:

• Shares and other instruments included in the bank’s regulatory capital in accordance with the legislation on banks and banking activities;

• Debt securities (secured and unsecured bonds, promissory notes) issued by the bank;

• Subordinated debt obligations of the bank;

• Cash held in the bank’s safes;

• Claims arising from derivative financial instruments, including futures, forward contracts, swaps, and options issued by the bank;

• Claims arising from the bank’s activities in fiduciary or trust management of assets.

The amount of compensation provided by the state to a single depositor in one bank is as follows:

• The full balance of the guaranteed deposit, if its amount is 200 million UZS or less;

• 200 million UZS, if the balance of the guaranteed deposit exceeds 200 million UZS.

In cases where a depositor holds multiple guaranteed deposits in a single bank, regardless of the size and currency of the deposits, the total amount of compensation payable for these deposits shall not exceed the limits specified above.

When depositors apply to receive compensation for their deposits, the agent bank is required to pay the specified compensation upon presentation of documents confirming the depositor’s ownership of the deposit (bank deposit agreement and/or bank account agreement) and an identity document.

Compensation is paid to heirs, legal successors, or their authorized representatives upon submission of all necessary documents confirming the right of inheritance or succession in accordance with the law.

• The legislative basis for deposit protection is the Law of the Republic of Uzbekistan 'On Guarantees for the Protection of Deposits in Banks,' adopted by the Legislative Chamber on October 18, 2024, approved by the Senate on January 24, 2025, and signed by the President of the Republic of Uzbekistan on February 18, 2025.
• Additionally, the Presidential Decree of the Republic of Uzbekistan No. UP-4057 dated November 28, 2008, 'On Additional Measures to Ensure Guarantees for the Protection of Citizens’ Deposits in Commercial Banks of the Republic of Uzbekistan' serves as a regulatory instrument supporting deposit protection.

• The Deposit Insurance System is a set of measures aimed at the state protection of depositors’ rights and lawful interests through the payment of compensation by the Agency in the event of a guarantee case.
• Participants in the Deposit Insurance System include the Agency, banks, and holders of guaranteed deposits.
• A bank, including a microfinance bank or an intermediary bank established in accordance with the law, becomes a participant in the Deposit Insurance System from the moment its license is issued.
• A bank’s participation in the Deposit Insurance System ceases in the event of license revocation by the Central Bank of the Republic of Uzbekistan.

The Agency is obliged to ensure access to compensation for at least three-quarters of the depositors of a liquidated bank:

• Within 20 business days from the date of the guarantee event – effective from January 1, 2025;

• Within 15 business days from the date of the guarantee event – effective from January 1, 2026;

• Within 7 business days from the date of the guarantee event – effective from January 1, 2027.

Guaranteed deposits that are not paid remain the property of the respective depositors and may be claimed from the Agency at any time.

The Agency guarantees the payment of compensation for deposits in banks in the event that the Central Bank of the Republic of Uzbekistan revokes a commercial bank’s license to conduct banking operations.

If, at the date of the guarantee event, a guaranteed deposit is pledged as collateral to secure the depositor’s obligations to a liquidated bank, and the deposit amount is sufficient only to fulfill that obligation, the guaranteed deposit will be applied toward satisfying that obligation.

Compensation for a guaranteed deposit in foreign currency is paid in accordance with the established procedure and limits in the national currency, based on the exchange rate of the Central Bank of the Republic of Uzbekistan on the date of the guarantee event (the date of the bank’s license revocation).

Grounds for suspension of compensation payments by the Agency include:

• The Agency or the agent bank having doubts about the accuracy and/or authenticity of the information in the documents submitted for compensation;

• Discrepancies between the depositor’s claims and the information provided by the liquidator;

• Existence of restrictive measures on the guaranteed deposit, including attachment or freezing of funds in the account, or suspension of account operations;

• Notification to the Agency before compensation is paid in cases where the guaranteed deposit is subject to a legal dispute.

Grounds for refusal of compensation or for reclaiming already paid compensation include:

• Submission of forged documents for compensation;

• A court decision that has entered into legal force confirming that the funds deposited were obtained from activities related to money laundering, financing of terrorism, or financing the proliferation of weapons of mass destruction.

• On the date of the guarantee event, the rights of depositors who are owners of guaranteed deposits against the liquidated bank are transferred to the Agency in an amount equal to the sum of the guaranteed deposits, regardless of whether compensation has actually been paid by the Agency. The Agency’s claims against the liquidated bank are satisfied in accordance with the priority established by law.
• The transfer of depositors’ claims to the Agency does not affect depositors’ rights to claim from the liquidated bank any portion of the guaranteed deposit exceeding the guaranteed amount.
• Depositors may claim directly from the liquidated bank any portion of the deposit exceeding the guaranteed amount.