Methodological Basis of Formation and Management of Banks' Revenue Base

Abstract

This study explores the methodological foundations for forming and managing the income base of commercial banks in Uzbekistan, as outlined in the "Strategy for Reforming the Banking System of the Republic of Uzbekistan for 2020–2025." Key objectives include fostering competitive financial markets, improving credit risk management, modernizing banking services, and enhancing technological solutions. Regulatory reforms, such as increased capital adequacy requirements, liberalized currency policies, and improved liquidity management, have been pivotal in strengthening financial stability. The research identifies the net interest margin as a critical indicator of profitability, highlighting its inverse relationship with bank assets and the recommendation that interest income constitutes at least 70% of gross income. Credit risk, particularly from foreign currency loans, poses a significant challenge, exacerbated by currency depreciation. Reforms like raising the minimum authorized capital, adopting Basel Committee standards, and ensuring non-interference from state bodies have further enhanced financial security and operational autonomy. These measures have bolstered liquidity, stabilized capital adequacy ratios, and fostered growth in Uzbekistan's banking sector. The findings underscore the importance of aligning regulatory frameworks with international standards to ensure sustainable income growth, offering practical insights for policymakers to navigate the evolving economic environment effectively.