July 17, 2007
Economics:
President resolves to further increase capitalization of commercial banks
Tax benefits for banks extended to 2012
Telephone exchanges of Uzbekistan digitalized
Society:
New level of legal system
Development of training programme for bank officers started
The Exposition Of Different Religious Has Been Presented At Museum
Uzbekistan defeated Malaysia 5-0
ECONOMICS
PRESIDENT RESOLVES TO FURTHER INCREASE CAPITALIZATION OF COMMERCIAL BANKS
On July 12, the President of the Republic of Uzbekistan signed a resolution "On measures to further increase liberalization of banks and activate their participation in investments processes on modernization of economy".
The document was signed with the purpose of further raising the level of capitalization of Uzbek commercial banks, ensuring their wide participation in investment processes, structural reforms of economy, modernization, technical and technological re-equipment of productions.
In line with the presidential resolution, the following have been set as priority direction of further deepening reforms and liberalization in banking and finance system:
- raising the level of capitalization of banks due to increase of their charter capitals, issue and active floatation of shares in stock markets for attraction into the capital of banks of free money resources of the population, economic entities and potential investors, including foreign ones;
- wide participation of commercial banks in investment processes on creation of new modern production, as well as modernization, technical and technological re-equipment of existing enterprises, providing on this basis the expansion of manufacture of competitive, export oriented products and increase of the population employment;
- further reduction of off-banking circulation of cash money resources, uninterrupted and unconditional provision with cash on the first demand of clients;
- expansion of the network of mini banks and the range of services rendered by banks, increase of the quality of servicing clients;
- provision of commercial banks with professionally trained highly skilled staff, increase of responsibility and culture of bank servicing.
The President approved the proposal of the Central Bank and Finance Ministry of Uzbekistan to use a part of Central Bank's profit on results of 2006, which should be put to state budget, for increase of charter capitals and expansion of resource base of investments:
• Microcreditbank – worth 42 billion soums, including 32 billion soums for increase of charter capital and 10 billion soums for opening credit line with focus on financing investment projects of small businesses;
• Pakhtabank – worth 25 billion soums, including 15 billion soums for increase of charter capital and 10 billion soums for opening credit line aimed at implementation of investment projects on deep processing of fruit and vegetable and cattle-breeding products;
• Ipotekabank – woth 25 billion soums, including 15 billion soums for increase of charter capital and 10 billion soums for opening credit line in order to enlarge volumes of mortgage crediting.
Commercial banks have been recommended to direct not less that 30% of their profits by the year end, after payment of all taxes and payments, to increase of the bank's stock capital.
The resolution has given commercial banks the right until 1 January 2012 to reduce the taxation base on income (profit) tax by the sum of incomes received from giving credits for the period of more than three years for implementation of investment projects on modernization, technical and technological re-equipment and update of production in priority industries of economy in accordance with the approved target programmes.
An order has been established, according to which the IPO public placement in stock exchange of commercial banks' shares is carried out worth at least 25% of the volume of newly issued shares into circulation (except for private banks); and the shares of commercial banks are compulsorily included in the listing of stock exchange with publication of regular quotes.
The resolution entrusted Finance Ministry to direct annually the resources allocated to the Mortgage Crediting Support Fund to coverage of negative margin between the interest rate on the resources attracted by the Fund in interbank market and the interest rate on preferential credit lines given by the Fund to commercial banks for support of preferential mortgage crediting.
Commercial banks shall be exempted from the payment of value added tax and income (profit) tax in case of transfer to their branches of inventory holdings, incomes and other resources. The payment source shall be exempted from taxes on interest and other payments made by commercial banks on credit lines of foreign financial institutions, attracted for financing of investment projects.
The customs and tax preferences, provided by the Resolution of the Cabinet of Ministers "On measures to further develop the system of settlements on the basis of plastic cards" dated 24 September 2004, shall be prolonged until 1 January 2010 in case of import and use of plastic cards, payment terminals, software, cash dispensers, information kiosks of self-service, other equipment and consumables used in payments by plastic cards.
The Central Bank of Uzbekistan jointly with the Uzbekistan Banking Association, interested ministries and departments, commercial banks have one month to prepare and approve a complex of measures on introduction of the system of national individual rating of commercial banks, financial institutions, issuers and the securities issued by them; as well as on attribution to commercial banks of creditability ratings of international rating agencies.
TAX BENEFITS FOR BANKS EXTENDED TO 2012
President Islam Karimov exempt commercial banks from tax on profit earned on long-term investment loans for the period until 1 January 2012.
According to the Presidential Resolution published in local press past Friday, the banks are eligible for tax benefits allowing them to exclude from the taxable base the profits earned on the loans extended for the period of over 3 years for the investment projects on modernization, technical re-equipment and renovation of production in priority sectors of the economy (in accordance with the approved target programs).
The Ministry of Finance will annually appropriate funds to the Fund for Support of Mortgage Lending to compensate for the negative margin between the interest rate on the funds borrowed by the Fund in the interbank market and the rate charged on preferential credit lines provided by the Fund to commercial banks to support the programme of preferential mortgage lending.
According to the resolution, commercial banks will be exempt from the VAT tax and the tax on profit with the transfer of material values, earnings and other resources to their branches.
In 2005, the banks were exempt from the tax on profit received from the extension of long-term investment loans to local enterprises for the period until 2010 on the condition that these profits are directed back into the bank's equity capital. The tax benefit coming in the form of the exemption from tax on earnings directed into the increase of the preferential lending fund and the earnings from extension of loans from this fund are kept.
The banking system of Uzbekistan currently consists of 28 banks, of which three are state owned banks, and five are banks with foreign capital. In 2007, 17% tax on profit was introduced for the commercial banks to replace the former rate of 12%.
TELEPHONE EXCHANGES OF UZBEKISTAN DIGITALIZED
This year the level of digitalization of over 2,000 telephone exchange stations is expected to reach 80%, against 73% at the end of 2006. These figures were announced during the general shareholders' meeting of Uzbektelecom Company, the largest telecommunications operator in Uzbekistan, UzA reported.
On President Karimov's initiative, the development and integration of information and communication technology in different spheres of economy and society have been made the priority objective of the socio-economic policy of the country, Uzbekistan Today wrote.
A major contribution to the implementation of this policy is made by Uzbektelecom. Performing similar functions, the telecommunications sector could be compared to a human nervous system. The level of its development determines the efficiency of functioning of other life-sustaining organs of the state, including the sectors of healthcare, economy, education, science and culture.
Uzbektelecom Director-General Hakim Muhitdinov said in 2006 over 10.5 billion soums were appropriated for the development of the telecommunication industry from the company's own funds; and appropriations from all sources totaled 44.7 billion soums. Under the contemporary market conditions special attention is paid to the efficiency of the company. In 2005 its earnings exceeded its expenses by 7.5 billion soums, and in 2006 – by 17 billion soums.
Uzbektelecom controls 97% of the fixed local telephone communication and 100% of the international. Using advanced technology, the company offers a wide range of voice communication, Internet access, CDMA standard based wireless connection, broadcasting and other services.
The head of the External Relations Department of Uzbektelecom Margarita Kashina said in 2006 the company implemented a number of projects, including the replacement of automatic telephone exchanges with digital systems in Tashkent, Andijan, Namangan, Ferghana, Syrdarya, Jizzakh and Samarkand regions, laid over 1,000 km of fibre-optic cables within the frame of the JBIC Project, and completed the works on other objects.
Early this year, the company launched a uS$21.2 million project on the expansion of the CDMA_450 standard based mobile communication network, reconstruction of the telecommunication transportation networks in Kashkadarya and Surkhandarya regions, in the cities of Ferghana and Jizzakh, modernisation and development of local telecommunication networks in Tashkent using new generation technologies.
For this project, China Development Banked extended a US$15.6 million loan to Aloka Bank, which, in turn, will procure the necessary equipment and provide it to Uzbektelecom on leasing conditions.
SOCIETY
NEW LEVEL OF LEGAL SYSTEM
“The abolition of death penalty and transfer the right to issue sanction on the custodial placement to courts” - the important step in democratization of a society” international online conference took place in the Japanese Right and Language Study Center at the Tashkent State Law Institute.
Scientists from Nagoy University and MIE University (Japan) have participated in it.
Point of issue was studying of the opinion and estimation of the international experts by results of liberalization of criminal law and to prospects of the further reforming of judicial system in Uzbekistan, issues of application of criminal punishment and transfer of the sanctions on the custodial placement.
Special attention has been given to socio-political and moral-spiritual aspects of the judicial-legal reform conducting in Uzbekistan under direction of the President Islam Karimov. Thus it was emphasized that Decrees of the President “On the abolition of death penalty in the Republic of Uzbekistan” and “On the transfer of the right to issue sanction on the custodial placement to courts” had been defined as basic principles and tasks, decision of which has predetermined the contents of legal norms established in laws “On amendments and additions into some acts of the Republic of Uzbekistan in connection with abolition the death penalty” and “On amendments and additions into some acts of the Republic of Uzbekistan in connection with the transfer of the right to issue sanction on the custodial placement to courts”.
Estimating the law “On amendments and additions into some acts of the Republic of Uzbekistan in connection with abolition the death penalty”, professor of MIE University Uyeno Tatsuhiko marked that Uzbekistan makes contribution in development of humanism and democratization.
- The law plays a huge role in stage-by-stage reforms of the punishment system and is the logical continuation of the reforms carried out in the country. Support of this law of international experts testifies the high estimation of reforms in legal field of Uzbekistan, - he said.
Participants have exchanged opinions on the procedures of conclusion under the custody and conditions of its application. Issues on removal of the certificate on application of the given preventive punishment, the order of appeal and protest, terms of holding in custody and opportunities of prolongation of these terms and application of punishment in the form of life imprisonment were discussed during the meeting.
Foreign experts from Japan have highly estimated the level of transformations in judicial-legal sphere, having emphasized that the legal system of Uzbekistan is being raised to a qualitatively new level of development.
DEVELOPMENT OF TRAINING PROGRAMME FOR BANK OFFICERS STARTED
Pursuant to the provision 9 of the part 4 of the Complex of Measures for Attraction of Foreign Credit Lines by Commercial Banks for the Financing of Small Business and Private Enterprise Projects in 2007, the Banking and Finance Academy of Uzbekistan together with the Banking Association of Uzbekistan has started to work on the development of a complex training programme and study plans to train the officers of commercial banks on the issues of attraction and appropriation of credit lines of the international financial institutions.
Based on the training programmes being developed with consideration of international experience and the needs of commercial banks, the Banking Association of Uzbekistan and the Banking and Finance Academy will organize special seminars and training courses for concerned categories of workers of commercial banks.
THE EXPOSITION OF DIFFERENT RELIGIOUS HAS BEEN PRESENTED AT MUSEUM
The exhibition - “Tashkent is a capital of Islamic culture” was held at the State Museum of Temurids in Tashkent, the Uzbekistan National News Agency Russian-language website reported last week.
The very event, which dedicated to naming Tashkent as a world capital of Islamic culture in 2007 by the International Islamic Educational, Scientific and Cultural Organization (ISESCO) have organized with assistance of the Institute of art studies of the Uzbek Academy of Arts and Tashkent Islamic University.
The material and spiritual monuments as archeological discoveries, works of art, craftsmanship wares and written sources were presented in exhibition.
“Four religions - Zoroastrism, Buddhism, Christianity and Islam are shown in exposition and now we have about 80 exhibits, - Nargis Kholovam the director of museum’s fund said. - “The various objects, as ossuaries (vessels for remains interment), ceramics and bronze wares, which founded in Surkhandarya Province belong to Zoroastrism”.
The exposition of Buddhism consists of wonderful photography of Buddha with monks and grandee’s sculpture, as well as ceramic products and wall-painting fragments of I-II centuries, which also had been founded in Surkhandarya.
The icons with the image of Christ, the Bible and various religious attributes were presented in exposition of Christianity.
The exposition, dedicated to Islam has gained substantial part of exhibition. The visitors were offered opportunity to see the Holy Koran and such works as “Al-Khidoya” by Burkhoniddin Marghinani, “Tafsif al-Kashshof” by Makhmud az-Zamakhshar, “Mubayyin” of Mirzo Bobur, “Arbain” (‘forty khadises’) and “Nafakat ul-uns” by Abdurakhmon Jomiy and “Khikmatlar” by Akhmad Yassaviy.
UZBEKISTAN DEFEATED MALAYSIA 5-0
Despite watching his side cruise to a 5-0 victory over Malaysia on Saturday, Uzbekistan coach Rauf Inileyev said that there is still room for improvement for his side before their crunch AFC Asian Cup match with China next week.
Maksim Shatskikh scored a brace and Timur Kapadze, Ulugbek Bakaev and Aziz Ibragimov added a goal each as the central Asians bounced back from their opening 2-1 loss to Iran to put themselves back in contention for a place in the last eight.
It was the biggest ever win recorded by the Uzbeks at the AFC Asian Cup but Inileyev was not completely happy with the performance of his side.
“I am not 100% satisfied with our performance although I felt that we played at a very good level today and I am pleased with the result that we got,” said the Uzbek coach.
“I never thought that we could win 5-0 so this is a very good result for us. But perhaps the most important thing is that we showed good form and we collected three points.”
Inileyev’s main concern was the ability of his side to maintain their fitness levels throughout the duration of the match in the energy-sapping heat and humidity of Kuala Lumpur.
“I am satisfied with our performance and the five goals that we scored but we had some problems that we will try to resolve before our next game.
“It is very hard to play for 90 minutes in this type of climate and that is why in the middle of the game, our form dipped.
“But our physical training here has helped us to get used to the conditions and I felt today that we maintained our strength for a longer period than we did in our last game.
“If we can bring together all of the good things that we have done in our games so far, I believe we can do better in our next game against China.”