RESOLUTION OF BOARD OF NATIONAL BANK OF THE KYRGYZ REPUBLIC

of August 15, 2018 No. 2018-P-12/33-6-(NPA)

About modification and amendments in some regulatory legal acts of National Bank of the Kyrgyz Republic

According to articles 20 and 68 of the Law of the Kyrgyz Republic "About National Bank of the Kyrgyz Republic, banks and banking activity" the Board of National Bank of the Kyrgyz Republic decides:

1. Make changes and additions to the following regulatory legal acts of National Bank of the Kyrgyz Republic (are applied):

- The resolution of Board of National Bank of the Kyrgyz Republic "About approval of the Instruction for determination of standards of sufficiency (adequacy) of the capital of commercial banks of the Kyrgyz Republic" of July 21, 2004 No. 18/2";

- The resolution of Board of National Bank of the Kyrgyz Republic "About some regulatory legal acts of National Bank of the Kyrgyz Republic" of August 25, 2005 No. 26/5".

2. This Resolution becomes effective after 15 (fifteen) days from the date of official publication.

3. Establish for commercial banks execution of the subitem 6 of Item 4.3 of the Instruction for determination of standards of sufficiency (adequacy) of the capital of commercial banks of the Kyrgyz Republic in the following terms:

- from January 1, 2019 to June 30, 2019 - degree of credit risk of 110%;

- from July 1, 2019 to December 31, 2019 - degree of credit risk of 130%;

- since January 1, 2020 - degree of credit risk of 150%.

4. Establish for commercial banks execution of the subitem 7 of Item 4.3 of the Instruction for determination of standards of sufficiency (adequacy) of the capital of commercial banks of the Kyrgyz Republic in the following terms:

- from January 1, 2019 to June 30, 2019 - degree of credit risk of 130%;

- from July 1, 2019 to December 31, 2019 - degree of credit risk of 160%;

- since January 1, 2020 - degree of credit risk of 200%.

5. To legal management:

- publish this resolution on the official website of National Bank of the Kyrgyz Republic;

- after official publication to send this resolution to the Ministry of Justice of the Kyrgyz Republic for entering into the State register of regulatory legal acts of the Kyrgyz Republic.

6. To management of methodology of supervision and licensing of banks to bring this resolution to the attention of commercial banks, specialized financial credit institution of JSC Finance Company of Credit Unions, the relevant structural divisions, regional managements and

representative offices of National Bank of the Kyrgyz Republic in Batken Province.

7. To impose control of execution of this resolution on the board member of National Bank of the Kyrgyz Republic Dzhusupova Т.Дж.

Appendix

to the Resolution of Board of National Bank of the Kyrgyz Republic of August 15, 2018 No. 2018-P-12/33-6-(NPA)

Changes and amendments in some regulatory legal acts of National Bank of the Kyrgyz Republic

1. Bring in the Resolution of Board of National Bank of the Kyrgyz Republic "About approval of the Instruction for determination of standards of sufficiency (adequacy) of the capital of commercial banks of the Kyrgyz Republic" of July 21, 2004 No. 18/2 the following amendments and changes:

in the Instruction for determination of standards of sufficiency (adequacy) of the capital of commercial banks of the Kyrgyz Republic approved by the above-stated resolution:

- state Item 2.4 in the following edition:

"2.4. For the purpose of preserving financial stability of bank and preserving stability of its activities the requirement about support of "additional inventory of the capital of bank" ("capital buffer" index) for dividend payout is established. The "capital buffer" index is determined similar to calculation of coefficient of sufficiency of total (adequacy) of the capital. Value of the "capital buffer" index is established in the amount of 18%. For banks, the share of deposits and which credits of clients constitutes respectively 8% and more from the total amount of deposits and the credits of clients of bank system in general, the requirement about need of support of the "capital buffer" index at the level of at least 20% is established by Committee on supervision of National Bank, at the same time regulations of the Provision "About Criteria of Systemacity of Commercial Banks and Non-bank Financial Credit Institutions" are considered.

For the purpose of this Item "deposits" are understood as accounts of legal entities, including deposits of authorities, and physical persons.";

- state Item 2.5 in the following edition:

"2.5. The bank has no power of decision about dividend payout if the "capital buffer" index calculated taking into account deduction of the amount of dividends planned to payment will constitute value below established by National Bank.

After dividend payout the "capital buffer" index shall constitute value not below established by National Bank.

In case of respect for value of the "capital buffer" index calculated taking into account deduction of the amount of dividends planned to payment, the bank shall get permission of National Bank to payment, except as specified, when for the retained earnings account the bank increases the authorized capital.";

- declare Item 2.6 invalid;

- in paragraphs the thirteenth and sixteenth the subitem in) Item 3.7 of the word "Managements of External Supervision" shall be replaced with words "authorized structural division";

- state Item 4.3 in the following edition:

"4.3. Depending on degree of credit risk, and also from type of certain partners / partners balance sheet assets are divided into the following categories:

1) Category 1 (degree of credit risk - 0%):

a) banknotes and coins of the Kyrgyz Republic, the states which are members of EEU and OECD and the states, having long-term sovereign credit rating are not lower than level "A", s "Standard & Poor" appropriated by rating agency" or the equivalent score assigned to one of rating agencies "Japan Credit Rating Agency (JCR)", "Fitch Ratings", "Dominion Bond Rating Service (DBRS)" and "Moody" s Investors Service".

Note: OECD - Organization for Economic Cooperation and Development. The list of state members of OECD is posted on the official site by www.oecd.org;

b) requirements to National Bank;

c) requirements to the Government of the Kyrgyz Republic (the securities issued by the Government of the Kyrgyz Republic and other requirements);

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