Salim Togayev,

PhD, Associate professor, Department of “Accounting, taxation and finance” of the Samarkand branch of the Tashkent State University of Economics

Samarkand, Uzbekistan. Email: sts-bank@bk.ru,

https://orcid.org/: 0000-0002-3170-9181

Abstract. In the article, one of the problems of ensuring the financial stability of the republic’s commercial banks is to reduce the amount of reserve allocations intended to compensate for losses from loans, problem loans and their current situation are analyzed, and scientific and practical recommendations and conclusions are formulated to reduce them.

In the “Action Strategy for the Further Development of the Republic of Uzbekistan”, approved by Decree of the President of the Republic of Uzbekistan No. PD-4947 dated February 7, 2017, deepening the reform of the banking system and ensuring its stability, increasing the level of capitalization of banks and strengthening the financial stability of the country’s banking system are highlighted as priorities directions of development of the banking system of the country[8].

Ensuring the financial stability of commercial banks in Uzbekistan is an important issue. To this end, the strategy for reforming the country’s banking system for 2020-2025 defines such tasks as “modernizing banking services, creating an efficient infrastructure for banks, improving the quality of the loan portfolio and risk management, and introducing technological solutions for assessing financial risks”[2]. In fulfilling these tasks, the need was noted for implementing measures aimed at developing the banking system, such as increasing the profitability of commercial banks’ assets, developing banks’ operations with securities, improving risk assessment and management practices in the activities of commercial banks, and reducing the share of problem loans.

Today, the world is rapidly developing, new equipment and innovative technologies are being created. With this in mind, the bank sees the lending process as a key factor in attracting new customers, entering and occupying new sectors. The bank should take a place as a convenient lending platform for the real sector of the economy and all its customers[11].

At the same time, there are actual problems related to ensuring the financial stability of commercial banks of the Republic of Uzbekistan. In particular, low profitability of assets in commercial banks, low quality of banks’ loan portfolios, increased amount of reserve allocations for loans are urgent problems in this regard.

Keywords. commercial banking, financial stability, credit, net profit, assets, reserve allocations intended to cover losses from loans.