Uzbekistan is set to expedite the privatization of state banks, according to Deputy Prime Minister and Minister of Economy and Finance Jamshid Kuchkarov as reported by "Gazeta.uz". Discussions were held at the Ministry of Economy and Finance regarding the implementation of the president's resolution on priority measures for reforms in 2024 across 10 main directions.
The government is focusing on accelerating the sale of state shares in two major state banks, aiming for the private sector's share in the banking system to reach 60% by the end of 2025. Efforts are underway for the privatization of "Uzpromstroybank" with recent meetings held with representatives from Rothschild & Co. Kuchkarov expressed gratitude to international financial organizations - the International Finance Corporation, EBRD, and the Asian Development Bank. Plans are also in place to sign an agreement with EBRD in May to prepare "Asakabank" for privatization.
The Vice Prime Minister also mentioned a "new major privatization program" that is expected to be approved in the coming days. The government, together with the Central Bank and the Presidential Administration, aims to work on implementing "Islamic finance", with plans dating back to 2021 to include this concept in the country's legislation.
Kuchkarov stated intentions to meet with the Vice President of the Islamic Development Bank in April to propose a roundtable discussion on the topic in July or September. The focus is on expanding cooperation with the Islamic Development Bank on various issues related to Islamic banking principles, which adhere to Sharia law prohibiting interest rates based on loan amounts and terms.
Moreover, a visit from the President of the European Bank for Reconstruction and Development, Odile Renaud-Basso, to Uzbekistan is expected soon. She is listed as a speaker at the Tashkent Investment Forum scheduled for May 2-3. In March, Fitch Ratings Deputy Director Pavel Kaptel warned of possible delays in the privatization of state banks in Uzbekistan, citing ongoing pre-sale preparations and the involvement of international financial organizations in bank capital as determining factors for the sale timeline.
Previously, in August 2023, authorities postponed the privatization and IPO of shares in "Kishlok Kurilish Bank" (recently transformed into the Business Development Bank), "Asakabank", "Alokabank", "Agrobank", and others to a later date. The government aims to reduce state shares in Uzpromstroybank to below 50% by the end of 2024, deviating from the initial plan to auction off all state shares.
