Uznews.net – According to the Central Bank of Uzbekistan, the country’s commercial banks have issued over 7 million plastic cards so far. This means that at least a quarter of the Uzbek population is facing cash problems to one extent or another.

Uzbek employers started paying wages into their employees’ bank accounts in the late 1990s when there were problems with cash and banks could not release cash for months. However, this did not help solve the problem of cash flow as there was a limited number of ATMs in the country and only expensive supermarkets accepted cards.

Card holders had to beg shoppers in supermarkets to pay for their shopping.

Only in late 2005 did the government manage to ease the problem when it enacted legislation punishing banks if they released money with a delay.

However, in less than six months the Central Bank started again turning a blind eye to such delays.

“Even though no-one abolished fines for issuing cash with a delay, the Central Bank simply stopped reacting to our complaints and one could achieve something only after lengthy court trials,” Tashkent-based accountant Svetlana Hegay said.

This behaviour of the Central Bank and economic courts contradicted legislation but was in full compliance with the policy to cut non-banking cash turnover.

“This policy, firstly, aimed to control commercial entities’ and the population’s revenue and ensure the collection of taxes. Secondly, decreasing

	A long queue to withdraw money

money supply curbs inflation,” commented a Finance Ministry official on condition of anonymity.

The situation worsened further when the government ordered all wages to be paid into bank cards, observers said.

However, only banks are now paying 100% of wages into their employees’ accounts, while some commercial entities are paying only 30% and public-sector workers receive up to 60% of their wages on their cards. This is true in Tashkent, as all public-sector workers get paid into their accounts in provinces, where there even fewer ATMs than in Tashkent.

“We have been able to withdraw cash not a single time since our wages started to be paid into bank accounts 18 months ago. We cannot buy anything on cards, because there are no POS terminals anywhere, but where there are terminals prices are much higher. We cannot afford them on our teacher’s wages. We have to persuade taxi drivers to buy petrol on our cards in return for their cash,” said Muhabbat Ibrayeva, a teacher from Bukhara.

The government is trying to create a system of non-cash settlements and a year ago ordered the main social and commercial facilities to install POS terminals.

“On the one hand, the situation will be improving, but, on the other, it will also deteriorate if the government does not ensure enough ATMs filled with enough money. When the population runs out of cash, shopkeepers will have to install terminals and this will improve the situation,” the Finance Ministry source said. “However, it will be hard to sell a flat, a car or anything else valuable for cash.”

Card holders, nevertheless, need cash for some reasons and they do frequent banks to fulfil their goals. It turns out that the best bank is Ipak Yuli Bank which allows its customers to withdraw up to 30,000 sums ($15) a day, while other banks set a much lower limit; the National Bank of Uzbekistan does not allow its customers to withdraw money using their cards at all.

Banks, the government and the local media often report about the successful adoption of non-cash settlements and an increase in the number of plastic cards, whereas people who still have cash are feverishly trying to think how to avoid a switch to non-cash settlements.