Uzbekistan banking reform enters toughest phase, says bank

Uzbekistan is entering what regulators describe as the most complex phase of its banking reform, as the country moves to align its financial system with international standards by 2026–27, the Central Bank has said.

Deputy chairman of the Central Bank Sanjar Nosirov said the focus was shifting from structural change to quality and institutional strength, with banks preparing to adopt International Financial Reporting Standards (IFRS) and the Basel III regulatory framework.

"We have reached the most difficult stage of reforms and are increasingly concentrating on quality," Nosirov said. "The transition to IFRS and the assessment of assets under Basel III standards will be our main task this year."

From 2026, all commercial banks will be required to fully adopt IFRS, bringing financial reporting into line with international practice. Asset classification will be aligned with Basel standards and IFRS 9, while new criteria will be introduced to assess business plans during bank licensing.

The Central Bank also plans to establish a Financial Stability Council, with government participation, to strengthen oversight of systemic risks and improve crisis prevention mechanisms.

By 2027, Uzbekistan is expected to complete its transition to Basel III, a global set of banking regulations introduced after the 2008 financial crisis to strengthen capital requirements, improve risk management and enhance banks’ resilience to economic shocks.

The reform package includes capital surcharges based on banks’ risk profiles, consolidated supervision of banking groups, and the full introduction of bank resolution and deposit guarantee mechanisms.

The reforms follow Uzbekistan’s first Financial Sector Assessment Programme, conducted by the International Monetary Fund and the World Bank in 2025, which evaluated the resilience of the banking system and its compliance with international supervisory standards.

According to the Central Bank, Uzbekistan aims to bring its financial sector into full compliance with all 29 core principles of effective banking supervision set by the Basel Committee.

President Shavkat Mirziyoyev has instructed regulators to accelerate the transition to IFRS, introduce Basel III standards and establish the Financial Stability Council as part of broader efforts to modernise the financial system and boost investor confidence.

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