ANALYSIS OF THE LEVEL OF COMPETITION IN THE BANKING SYSTEM OF UZBEKISTAN
Abstract
Annotation. Competition in the banking services market is one of the important components of a stable banking system. The article describes the current state of interbank competition among banks in Uzbekistan, analyzes the main indicators of banking activity, studies the indicators of the Herfindahl-Hirschman index relative to the domestic banking system. The author also makes proposals for stimulating the development of healthy competition between banks in Uzbekistan.
Key words: banks; competition; banking market; competitive environment; interbank competition; level of competition
A significant role in the sustainable development of reproductive processes in the regional economy is played by banking institutions, the functioning of which is based on achieving the strategic goals of sustainable development and maintaining a dynamic balance of the social, economic and environmental environment. The ongoing changes in the modern economic space affect all areas of the functioning of industry markets and sectors of public relations. Emerging problems associated with achieving economic equilibrium and sustainable development of industry markets require the formation of new methodological approaches to their solution.
Under the influence of a competitive environment, banks operating on the principles of financial intermediation are being transformed into development institutions that ensure economic growth and integration of the areas of application of environmental, social, information, digital and investment capital. In the conditions of the digital economy in the Republic of Uzbekistan, intense competition in the banking business is already an objective reality, which is constantly increasing every year as the network of credit institutions and other various financial institutions develops. At the same time, improving the quality of financial institutions, which is the basis for the growth of national competitiveness, is also the main goal of structural transformations in the banking and financial sector, necessary to ensure sustainable long-term economic growth. Today, in Uzbekistan, the reform of the banking system has reached a decisive stage, as evidenced by the Decree No. PF-5992 adopted by the President of the Republic of Uzbekistan dated May 12, 2020 “On the strategy for reforming the banking system of the Republic of Uzbekistan for 2020-2025”[1]. The main task in the Decree set for commercial banks is their capitalization and the privatization of banks with a State share, mainly to foreign investors. Against the backdrop of high uncertainty and tension in foreign economic conditions, the Central Bank maintained the main rate of 14% per annum in order to ensure macroeconomic and financial stability in the country, by preventing the growth of devaluation and inflation expectations, maintaining savings activity in the national currency and mitigating the impact of external risks on the economy. The functioning of the economic system is based on market mechanisms - competition and competition - these categories are key in a market economy. In the Decree of the President of the Republic of Uzbekistan dated January 28, 2022 PF-60 “On the Development Strategy of New Uzbekistan for 2022-2026,” the priority tasks are the accelerated development of the service sector in existing commercial banks and radically change the composition of services provided in the next five years through modern high-tech types.[2]
