Central Bank moves to tighten oversight of BNPL services

Uzbekistan will draft a separate law to regulate installment payments, Spot reported citing Sanjar Nosirov, deputy chair of the Central Bank, as saying.

According to him, the regulator has plans to regulate the installment payment sector and has already begun work in this direction together with government representatives. As a first step, the Central Bank developed standards and submitted them to industry associations, which have begun implementing them.

“At the next stage, our plans include drafting and adopting a separate resolution and a separate law. We have already started work within our internal processes. We plan to gradually move toward regulating installment payments under the Central Bank’s supervision,” Sanjar Nosirov said.

The deputy chair of the Central Bank stated that within the framework of regulating installment payments, the regulator is most concerned about the formation of an excessive debt burden among the population. In this regard, the Central Bank has begun taking a number of measures, including making it mandatory to provide information on installment payments to credit bureaus.

At the next stage, the regulator plans to require installment payment services to take borrowers’ debt burden into account. To do this, market participants will have to request data from credit bureaus, calculate the debt burden indicator (DTI), and comply with established limits.

Regulation of installment payments

The Central Bank first announced plans to regulate the BNPL sector (Buy Now, Pay Later) back in January 2025. In May, Central Bank Governor Timur Ishmetov again stated that the authority was concerned about rapidly growing segments that are not yet covered by supervision but already pose “certain risks.”

At a Senate session in June, he confirmed that the regulator proposes to enshrine in legislation the obligation to submit data on installment payment agreements to credit bureaus and to disclose overpayments on such products.

In October, the Central Bank published a draft Code of Ethics for participants in the installment payment market. To prevent an increase in debt burden, the regulator proposes allowing installment payments only for citizens aged 18 and older. When registering new clients, it is required to collect basic information: full name, date of birth, PINFL (personal identification number of an individual), phone number, residential address, and citizenship.

After registration, each new client is provided with an initial installment limit of UZS 2 million. To increase this limit, the debt burden indicator (DTI) is calculated, which must not exceed 50%. Under the Central Bank’s proposal, borrowers will be able to allocate no more than half of their official income to installment payments.

If a client has overdue payments or penalties, no additional sanctions (compound interest) are charged on them. If there is overdue debt on previously obtained loans, the client will be denied a new installment plan. The maximum amount of overpayment on installment plans may be capped at 50% of the principal debt.

In addition, clients will be able to repay their debt ahead of schedule without paying penalties – fines or late fees.