INTERNATIONAL JOURNAL OF ARTIFICIAL INTELLIGENCE
ISSN: 2692-5206, Impact Factor: 12,23
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Journal:
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THE IMPORTANCE OF EFFECTIVE ORGANIZATION OF CREDIT OPERATIONS
IN COMMERCIAL BANKS
Shokulova Zakhro
Student, Karshi State Technical University, Uzbekistan
Annotation
:This article explores the significance of the effective organization of credit
operations in commercial banks and addresses the methodological issues essential for ensuring
their successful and sustainable functioning. It also examines the management of credit risks,
the proper structuring of the lending process, and methods for improving its efficiency. In
addition, the article provides conclusions and recommendations aimed at enhancing the
effectiveness of credit operations within commercial banks.
Keywords:
credit operations, credit portfolio, credit risk, credit process, problem loans,
Introduction.
Currently, ensuring the efficiency of credit operations in commercial
banks is of critical importance for their successful and sustainable functioning. Primarily, the
proper organization and acceleration of credit processes can be achieved through the effective
use of modern information technologies. In this context, it is essential to implement effective
methods of credit risk management and creditworthiness assessment. Additionally, applying an
individual approach to each client and identifying their specific needs plays a vital role in
enhancing service quality. Improving the efficiency of credit operations in commercial banks
remains a pressing issue today. As in all sectors, competition among banks is increasing year by
year. Attracting more clients and gaining their trust requires the delivery of high-quality
banking services. Moreover, the proper management of credit risks is crucial for maintaining
the financial stability of banks. This includes monitoring credit quality and accurately assessing
the repayment capacity of borrowers. In particular, within the framework of the "Strategy for
Reforming the Banking System of the Republic of Uzbekistan for 2020–2025," one of the key
goals is to increase the share of the private sector in the banking system from 15% to 60%, as
well as to accelerate the transformation of state-owned banks. In the process of implementing
this strategy, commercial banks are paying increased attention to the automation and
optimization of credit processes in order to improve financial analysis and long-term
development strategies. Banks must quickly adapt to these changes and align their activities
with the new requirements. By enhancing the efficiency of credit operations, banks can
strengthen their competitiveness, improve customer service, and ensure their long-term stability.
Analysis and Results.
Credit operations hold strategic importance for commercial
banks, as they serve as the primary source of income. The efficiency of these operations
directly affects the financial standing and competitiveness of the bank. Regular monitoring of
each issued loan and the prevention of non-performing loans contribute to assessing the
importance and effectiveness of credit operations. The significance of credit operations in
commercial banks is characterized by their role as a revenue source, their contribution to
economic growth, and their function in expanding the customer base.
Specifically, reviewing the key indicators of banking activity for the first quarter of
2024 reveals a slowdown in the growth rate of total banking system assets. While this growth
ranged between 20–30% during 2022-2023, as of March 1, 2024, it amounted to 15.4%. The
total assets of the banking system reached 648.6 trillion UZS, and liabilities amounted to 549.6
trillion UZS. State-owned banks accounted for 67.4% of total assets, 70.1% of the credit
INTERNATIONAL JOURNAL OF ARTIFICIAL INTELLIGENCE
ISSN: 2692-5206, Impact Factor: 12,23
American Academic publishers, volume 05, issue 06,2025
Journal:
https://www.academicpublishers.org/journals/index.php/ijai
page 449
portfolio (331.2 trillion UZS), and 50.7% of total deposits (120.6 trillion UZS), while the
remaining share belonged to 25 private banks. For every 100 UZS in loans issued, state-owned
banks attracted 36 UZS in deposits (down from 39 UZS the previous year), whereas private
banks attracted 83 UZS (down from 93 UZS).Since the beginning of the year, the growth rate of
bank deposits has also slowed. While in the first quarter of the previous year bank deposits
grew by 42%, during the same period of the current year the figure stood at 13%. Furthermore,
foreign currency deposits declined from 38% to 29% compared to the same period of the
previous year. There has been an increase in the activity of individuals using banking services.
The share of credit portfolios belonging to individuals rose from 26.5% in the first quarter of
the previous year to 32.1% during the reporting period an increase of nearly 6 percentage points.
Consequently, the share of legal entities decreased from 73.5% to 67.9%. Moreover, the share
of individual deposit balances increased by 6 percentage points to 36.1%, while the share of
corporate deposit balances decreased from 70% to 63.9%. In order to assess whether the
indicators of commercial banks comply with regulations, it is necessary to consider several key
prudential indicators. Compliance with the norms established by the Central Bank plays an
essential role in ensuring the stability of banking activities. All banks currently meet these
regulatory requirements. These indicators confirm that the capital base of banks is sufficient
and that they are creating the necessary reserves for non-performing loans, demonstrating an
improved approach to risk management. Additionally, through the restructuring of loans,
commercial banks
on loans from commercial banks as of April 1, 2025
No.
Bank name
Total
credits
from that
individuals
legal
entities
1
National bank of Uzbekistan
108,593
19,092
89,501
2
Uzbek Industrial and Construction Bank
(SQB)
68,860
10,299
58,561
3
Agrobank
64,633
10,099
54 534
4
Asaka Bank
39,577
9 571
30,006
5
Xalq Bank
29 186
21,999
7 187
6
Business Development Bank
23 271
12 177
11,094
7
Microcredit bank
18,808
7,505
11,303
8
Aloqa bank
14,080
4 665
9,414
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ISSN: 2692-5206, Impact Factor: 12,23
American Academic publishers, volume 05, issue 06,2025
Journal:
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page 450
Table 1. Information on loans from commercial banks [4]
are providing opportunities for clients to restore their payment capacity by restructuring
problematic credits.
Loan Portfolio Structure and Bank Specialization Analysis
Among the nine commercial banks listed in the table, National Bank of Uzbekistan
holds the largest credit portfolio, with a total volume of 108,593 units, demonstrating a
significant lead in this regard. It is followed by Uzbek Industrial and Construction Bank (SQB)
(68,860 units) and Agrobank (64,633 units), which also possess considerable shares in the
national credit market. Loan allocation by client type reveals a marked orientation toward
legal entities in the majority of banks. Specifically, banks such as National Bank of Uzbekistan,
Uzbek Industrial and Construction Bank (SQB) , Agrobank, Asaka Bank, Aloqa Bank, and
Turon Bank allocate a major share of their total loans to corporate clients. This trend highlights
the priority placed on financing the corporate sector and industrial enterprises. For instance, in
the case of National Bank of Uzbekistan, the volume of loans allocated to legal entities is
approximately 4.7 times higher than that to individuals (89,501 vs. 19,092 units). Exception in
retail lending: A notable deviation from this general trend is observed in Xalq Bank, where the
majority of the credit portfolio is directed toward individuals (21,999 units), nearly three times
the volume of loans extended to legal entities (7,187 units). This suggests that Xalq Bank is
actively engaged in consumer and mortgage lending and is focused on serving the financial
needs of the population. Balanced distribution is observed in the Bank for Small Business
Development, where the loan allocation between individuals and legal entities is nearly equa
l2,177 and 11,094 units, respectively. This indicates the bank's diversified client base and its
commitment to serving both corporate and retail customers. Specialization by bank: The data
show varying degrees of specialization across banks. Some institutions-such as National Bank
of Uzbekistan and Uzbek Industrial and Construction Bank (SQB)-are primarily focused on
financing large-scale corporate projects and state programs. In contrast, banks like Xalq Bank
are more oriented toward meeting the financial needs of households. In summary, as of April 1,
2025, loans extended to legal entities dominate the credit portfolios of Uzbekistan’s commercial
banks. This reflects the broader economic focus on the development of the industrial and
entrepreneurial sectors. Nevertheless, certain financial institutions, such as Xalq Bank, have
assumed a leading role in providing financing to individuals, thereby contributing to the
fulfillment of social needs. The volume and structure of credit portfolios define each bank’s
market strategy and its role in the national economy. Moving forward, assessing the quality,
sectoral distribution, and dynamics of these loans will enable a deeper understanding of the
stability and future prospects of the banking sector.
Conclusion and Recommendations.
Based on the analysis presented above, it can be
concluded that, in the execution of credit operations, commercial banks must carefully consider
risk levels, loan collateral, and most importantly the repayment capacity of borrowers in order
to make optimal lending decisions. Ensuring the timely repayment of each issued loan and
avoiding the accumulation of non-performing loans is of paramount importance for both banks
and borrowers.At the same time, in order to recover problem loans, it is advisable for banks to
collaborate with various institutional entities, which can lead to more effective resolutions.
Early detection of loan repayment issues plays a crucial role in this context, necessitating the
9
Turan Bank
12,582
2 204
10 379
INTERNATIONAL JOURNAL OF ARTIFICIAL INTELLIGENCE
ISSN: 2692-5206, Impact Factor: 12,23
American Academic publishers, volume 05, issue 06,2025
Journal:
https://www.academicpublishers.org/journals/index.php/ijai
page 451
implementation of modern credit evaluation systems aimed at proactive risk management.One
effective approach is the restructuring of outstanding debts, offering flexible repayment
solutions to borrowers. This allows for partial recovery of non-performing loans while
supporting the financial rehabilitation of clients.By implementing the aforementioned measures,
commercial banks can significantly enhance the efficiency of their credit operations. Such
reforms will not only contribute to the soundness of individual banks but also foster greater
stability and sustainability within the broader banking sector.
Literature:
1.“On the Strategy for Reforming the Banking System of the Republic of Uzbekistan for 2020-
.of Uzbekistan No. PF- 5992 dated May 12 , 2020
2. Z.Mamadiyorov, M.Makhmudova , M.Kurbanbekova Banking. Textbook . T .:- Innovative
Development Publishing House. 2021 , 158 pages
3. Decree of the President of the Republic of Uzbekistan on the Development Strategy of New
Uzbekistan for 2022-2026. January 28, 2022 No. PF- 60
4. www.сbu.uz – official website of the Central Bank of the Republic of Uzbekistan
