National Bank of Tajikistan Takes Payment System to New Level

In 2015 and under new management, the National Bank of Tajikistan (NBT) started to  implement a series of fundamental reforms in the country’s banking and insurance sectors, including payment systems. Thus, in order to strengthen the future development of Tajikistan’s payment systems, the first-ever Law on Payment Systems and Payment Services was drafted and finally adopted. The Law has become a turning point that defines regulation and ultimately helps the market to implement new products and services that are targeted to the development of cashless transactions.

The coverage of access points is growing, but it has significant regional differences, with most access points concentrated in the capital city, Dushanbe. Coverage is less widespread in the regions. The infrastructure for accepting cards has grown rapidly: as of July 2019, the number of devices used for non-cash transactions (POS terminals and ATMs) increased by 28.1 percent year-on-year to 3,261.

The infrastructure for accepting cards is concentrated in the capital. Only the Sughd and Gorno-Badakhshan regions have a share of access points that correlates with the share of the population, while in Khatlon region and regions of republican subordination there is a clear shortage of access points, especially POS terminals and ATMs. This problem must be addressed to ensure that the population has equal access to financial services.

Payment System Development in Tajikistan

The development of the payment system is one of the priorities for Tajikistan, but there is still a lot of work to be done to put the recent legislative changes into practice. In 2014, the country adopted the National Strategy for the Development of the Payment System of the Republic of Tajikistan for 2015-2025. As part of reforms in the banking sector, in 2017 the NBT developed and adopted the Law on Payment Services and Payment Systems. This allowed market participants to have a legal basis to expand their services.

The law also introduced the concept of agency banking. Credit institutions were allowed to engage legal entities to act as their agents and sub-agents to provide certain banking services. This allowed credit institutions to reduce their operating costs, especially when serving the population in remote areas of the country, as well as to increase financial accessibility. At the same time, the development of agency banking is at an early stage: as of December 2019, only nine agents were acting on behalf of credit institutions. Incentives will be needed to ...