Digital Transformation

Transformation and Innovative Banking Services


     Today our country is celebrating the 30th anniversary of its Independence. Looking back at the work done over the past 4 years, it becomes clear that they have become a turning point in our social and economic life.
     Indeed, at the initiative of the President of our country, Shavkat Mirziyoyev, at the new stage of reforms, this area was completely renewed. If it can be called that way, financial institutions is the “artery” of the economy, which began to work dynamically in accordance with the requirements of the times. This is the result of rapid reforms implemented with carefully thought-out concrete measures.
     It should be noted that Agrobank, which is one of the most active participants in the country’s financial services market, has risen to a radically new level of its development. Thanks to the acceleration of transformation processes and the introduction of innovative services, it has fully emerged as the most modern commercial bank in the country.
Foundations for sustainable growth created
     Recently, much attention has been paid to ensuring the stability of financial institutions and increasing their role in social and economic life, because commercial banks play an important role in improving the living standards of the population, creating a favorable business environment, developing entrepreneurship, and financial support for industry. Therefore, in the course of implementation of decrees and resolutions of the head of our state to support the banking system, over the past 4 years, the stability of JSCB “Agrobank” operations has been ensured and a solid foundation has been created for growth. According to these important documents, a total of 4.5 trillion soums were allocated towards increasing the level of the bank’s capitalization. With this, the authorized capital of the bank increased 14 times compared to the beginning of 2017 and amounted to 5.3 trillion soums.
     Undoubtedly, this further expanded the bank’s capabilities to attract local and foreign resources, and actively lend to sectors of the economy. The dynamics of attracting international credit lines is the evidence of this.
Dynamics of growth of the authorized capital (bln soums)
     As a matter of fact, if in 2016 only 30 million USD was attracted from one foreign bank, in 2017-2021 partnerships were established with 18 international financial institutions and foreign banks, agreements were reached on attracting lines in the amount of 703 million USD. In addition, the volume of deposits attracted from internal sources increased almost 5 times. In other words, the size of deposits increased by 7.3 trillion soums and amounted to 9.2 trillion soums.
     In general, since 2017, the bank has directed a total of 76 trillion soums credit funds to support sectors of the economy. Also, as of August 2021, the bank’s assets amounted to 34.6 trillion soums, credit investments – 28.9 trillion soums. This figure has increased almost 10 times compared to 2017.
     These achievements are the result of practical measures taken to reform the banking system and increase its investment activity, making the correct conclusion from the words of the head of our state “from now on, banks in the matter of attracting resources must “pull their own cart.” This is the only way they can become a financial institution with a modern management system that meets market conditions”.
Stage of renewal and development

     At the present stage of reforms, special attention is paid to the wide introduction of market norms and principles into the national economy, in particular, ensuring competition between banks.
     Looking at the practice of the banking system of developed and developing countries, we see that application of the same market principles and mechanisms gives good results. Therefore, in the transformation process of the Agrobank, the main task was to transform it into an innovative commercial bank operating in accordance with international standards, and to improve the quality of services provided to clients.
     It should be noted that for the banking transformation, initially in 2017-2018, experts from leading foreign banks in key areas were engaged. In turn, a group of our employees participated in exchange visits to leading banks in Turkey, Russia, Germany, Georgia, China and India to learn the achievements of international banking practice.
     In 2019-2020, which is the next stage of the transformation process, a long-term development strategy of the bank was developed with the involvement of the Asian Development Bank and the international consulting company KPMG. The new business model adopted based on the strategy, determined steps for further development of Agrobank’s operations in two main areas.
     First, along with funding the development of family entrepreneurship, comprehensive support will be provided to enterprises in the agro-business sector.
     Secondly, the work on expanding the bank’s commercial business, in particular, corporate clients, small businesses, the scale of retail business, will be consistently continued.
     It is worth noting that similar well-judged measures, carried out during 4 years since the start of the bank’s transformation, have begun to take the bank uphill. This is also confirmed by the fact that by the end of 2020, the bank’s key indicators improved significantly. Consequently, the fact that net profit increased 18 times and reached 255 billion soums, return on assets increased 3 times, by 1 percent, return on equity increased 2 times, by 5.1 percent, operating efficiency improved by 28 percentage points, 60 percent growth means a lot.

The entrepreneurial spirit of the population has awakened

     Poverty reduction has been identified by the President of our country as one of the priority tasks, and efforts have begun to provide government support to vulnerable segments of the population. The JSCB “Agrobank” along with a number of other banks was charged with the task of financing projects in this direction.
     “Poverty reduction is the implementation of a comprehensive economic and social policy to awaken the entrepreneurial spirit of the population, to fully realize the internal forces and human potential, to create new jobs,” the President of our country said in his speech. Based on this fact of life, currently the medium-term and long-term strategies, state programs to combat poverty are being adopted, and their consistent implementation is ensured. That is, under the programs, in total, loans were allocated in the amount of 7 trillion. 44 billion soums. Thanks to this, so many people were able to set up their business activities and get a constant source of income. This is confirmed by the fact that over the past 4 years the number of small businesses and entrepreneurship serviced by the bank has increased by almost 80 thousand due to the support of entrepreneurial projects.
     At the same time, loans worth 4.7 trillion soums were allocated to finance 2,719 projects under the programs for socio-economic development of regions. Ultimately, more than 33 thousand new jobs were created. This means that a solid foundation has been created for many families to live in prosperity. In this sense, we can say that Agrobank has become the closest partner, financial intermediary in bringing the vulnerable segments of the population out of poverty, awakening an entrepreneurial spirit in them.
Investment in a cluster perspective
     As the bank name speaks for itself, the priority area in our operations is comprehensive support of the agricultural sector and other related industries, financing of promising business projects.
     It is known that a cluster system was introduced to achieve quality development and industrialization of the sector through introduction of market principles in agriculture. Currently, the total number of cotton-textile clusters created in the republic has reached 122, and 91 of them are Agrobank clients. In these clusters, which grow cotton on a total area of 384 thousand hectares, investment projects are being implemented in stages, which cover the process of creating the value chain, that is, from sowing seeds to producing finished products. In particular, in 2021-2023, it is planned to implement 43 investment projects in cotton and textile clusters for a total amount of USD 501.4 million USD. Of this, 300 million USD will be financed through a bank loan, which will create about 17,000 new jobs.
     Until now, projects worth 272 million USD have been funded, aimed at deep processing of cotton fiber based on a similar mechanism. Work in this direction will continue in the future, and the volume of allocated bank loans will increase annually.
In addition, loans worth 2.4 trillion soums were issued for introduction of drip irrigation technology in cotton-textile clusters and farms operating on the basis of cooperation with them.
     The electronic trading platform “,” which is expected to be launched in the near future, will undoubtedly provide additional conveniences for all types of agricultural enterprises in general. Because the platform will create opportunities for the trade in garden and field goods, mineral fertilizers, agricultural machinery, and provision of services in the sector.
Putting the modern knowledge and experience into practice
     Projects implemented by Agrobank play a key role in achieving high efficiency in the agricultural sector through development of modern knowledge and experience in agriculture, introduction of intensive and innovative agricultural technologies into practice. For example, a collection of 100 books has been created for farmers and cluster members in our country to enrich their knowledge and skills, to present them best practices. This collection is developed by the research team consisting of more than 120 subject-matter experts and scientists supported by the bank, and is published in a circulation of 10 thousand copies and distributed free of charge throughout the country.
The collection is and also available in the electronic form on the website and on Telegrams at agro100_citob_bot. It has been downloaded 30 thousand times.
     Another major project implemented by our bank for the prosperity of the country’s agriculture is the establishment of the “School of Farmers”. The main goal of this project is to facilitate the establishment and development of businesses for the population planning to create their own entrepreneurship in the agricultural sector.
     This project is implemented in 5 regions in cooperation with Tashkent State Agrarian University, its Nukus, Samarkand and Termez branches, as well as the Andijan Institute of Agriculture and Agricultural Technologies. The trainees can enroll in the schools from all regions.
     The interest of young people in the school is growing because of the fact that courses are offered based on foreign standards in animal husbandry, poultry, vegetable and melon growing, greenhouse farming, as well as in business areas, financial and legal literacy.
     Taking into account the growing demand for agricultural education, efforts have already begun to further improve the educational process and provide courses in new areas.
Leader in online service offering

     In line with the requirements of the time, the ongoing rapid reforms set the task for commercial bank to improve the service market and provide quality services. Naturally, this cannot be achieved without the practical application of modern programs and IT achievements. Therefore, Agrobank carried out an IT audit with the assistance of an international consulting company (PWC) in order to assess the effectiveness of the functioning of automated banking systems.
     To date, we have started to implement 4 large projects in the field of information technology. These include CRM – customer relationship management system, HR – human resource management system, BRMS – business process management, i.e. a credit conveyor system, and ESB – system for integrating various information systems (bus).
     A striking example of this is that the JSCB “Agrobank” was the first in the financial services market of Uzbekistan to introduce the services “Online microcredit” and “Online credit” for individuals. The advantage of this new service is that it can be used remotely 24/7. There is no need to come to the bank offices, wasting time on filing documents. The operation is performed on devices through the “Agrobank Mobile” application and the “Internet Banking” system.
     It is worth noting one more innovation – Agrobank for the first time in the domestic market of financial services introduced online international money transfers. This type of service, introduced jointly with Sberbank of Russia, enables to transfer funds between Uzbekistan and Russia with a bank card without visiting the bank.
     In order to create more convenience for customers, the marketplace, specializing in retail services, has been introduced. More than 7,000 products can be purchased online on this platform in B2C format. In addition, in 2017-2020, 1,400 new ATMs were imported and deployed across the country.
     Also, new types of services have been developed, such as free delivery of plastic cards, money transfers in national currency throughout Uzbekistan, multi-currency Visa cards, Humo credit cards, as well as card machines that make it easy to get a bank card, mobile office services that move around the regions, and 333 self-service centers (24/7) have been opened to create additional convenience for the population.

Long-term development strategy

     Over the years of independence, the JSCB “Agrobank” has won the trust of customers and partners with its effective activities. Indeed, each successful year left behind, leaves a vivid mark in bank’s life. However, while many achievements have been accomplished, there is still a lot of work to be done. First, we need to introduce the generally recognized modern methods and norms in assessing the financial stability of a bank and the quality of provided services.
     The measures carried out in the bank are aimed at ensuring consistent implementation of priority tasks related to banking transformation, defined in the Decree of 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,” increasing the competitiveness of Agrobank, transforming it into a system operating on the basis of advanced banking practices, as well as further strengthening public confidence in the banking system.
     This is undoubtedly facilitated by strategic reforms aimed at radically improving the activities of commercial banks in our country, organizing their activities on the basis of international standards. Agrobank as one of the largest financial institutions in the country, will be in the forefront of these processes, and will contribute to further development of the economy, wider involvement of the population in entrepreneurship, as well as to poverty reduction through financial support for business projects.
«Agrobank» JSCB Press Service


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