RESOLUTION OF BOARD OF NATIONAL BANK OF THE REPUBLIC OF TAJIKISTAN

of August 5, 2019 No. 87

About approval of the Instruction No. 238 "About procedure for regulation of activities of Islamic credit institutions" 070.170.010.

According to article 42 of the Law of the Republic of Tajikistan "About National Bank of Tajikistan" and part 2 of article 35 of the Law of the Republic of Tajikistan "About Islamic banking activity", the Board of National Bank of Tajikistan decides:

1. Approve the Instruction No. 238 "About procedure for regulation of activities of Islamic credit institutions" it (is applied).

2. In accordance with the established procedure to provide this resolution to the Ministry of Justice of the Republic of Tajikistan for state registration and to enact after state registration and official publication.

3. Authorize Department of banking supervision in case of state registration of this resolution in the Ministry of Justice of the Republic of Tajikistan if necessary to bring in the text of its appendix of change and amendment of editorial nature, not changing its content.

4. To assign execution of Item 2 of this resolution to the Secretary of Board, Department of banking supervision, Legal department and Department of the press.

5. To impose control of execution of this resolution on the vice-chairman of National Bank of Tajikistan Mashrabzod X.

Approved by the Resolution of Board of National Bank of the Republic of Tajikistan of August 5, 2019 No. 87

The instruction No. 238 "About procedure for regulation of activities of Islamic credit institutions"

The instruction No. 238 "About procedure for regulation of activities of Islamic credit institutions" (further - the Instruction) is developed according to Article 42 of the Law of the Republic of Tajikistan "About National Bank of Tajikistan" and Article 35 of the Law of the Republic of Tajikistan "About Islamic banking activity", and provides regulation of activities of Islamic credit institutions (except for Islamic microcredit institutions and Islamic microcredit funds) by means of establishment and calculation of prudential regulations.

Chapter 1. General provisions

1. In this Instruction the following concepts are used:

- Islamic credit institutions - legal entities (Islamic banks, Islamic non-bank credit institutions and the Islamic microfinancial organizations, including "Islamic bank window") performing all or separate Islamic banking activities provided by the Law of the Republic of Tajikistan "About Islamic banking activity" based on the license of National Bank of Tajikistan;

- conventional credit institutions - legal entities (banks, non-bank credit institutions, including the microfinancial organizations) performing based on the license of National Bank of Tajikistan all or separate banking activities provided by the Law of the Republic of Tajikistan "About banking activity" and other legal acts of the Republic of Tajikistan;

- Islamic bank window - the branch of conventional credit institution performing everything or part of Islamic banking activities based on the license of National Bank of Tajikistan;

- Committee on Islamic financial services - the body of Islamic credit institution which is responsible for compliance of the agreements (agreements) signed by them to standards of Islamic banking activity;

- the Islamic credit / Islamic financing - the amount or financing which is provided to the client by Islamic credit institution according to the principles of Islamic financing and can have or not have payment terms of the main amount, profit, lease or for services;

- the investment account - the account by means of which the Islamic credit institution accepts money according to the principles of Islamic financing for the purpose of investment without acceptance on itself the obligation of complete return of means under condition:

- distributions only arrived or profit and losses respectively between person representing money and the Islamic credit institution accepting money;

- payments or not payments of means;

- the holder of the investment account - the client who opened the investment account in Islamic credit institution for the purpose of investment according to the principles of Islamic financing;

- the Islamic deposit or savings - the money and other values of physical persons and legal entities transferred to storage to Islamic credit institution on the terms of complete return with profit or without profit to the owner of the deposit or its representative on demand or to agreed time frames and with respect for the principles of Islamic financing;

- dependent person - the following persons mean:

- member of the Supervisory board, leading employee;

- member of the family of the leading employee;

- person and members of his family who have the privilege of ownership in Islamic credit institution, and the legal entity in whom person or the leading employee has preferential share;

- the legal entity in whom the Islamic credit institution has the preferential share which is not considered by preparation of the summary financial reporting;

- person rendering to Islamic credit institution services as the member of the committee on Islamic financial services;

- family members are spouses, children, brothers and sisters, parents, adoptive parents, adopted children;

- preferential share - share of direct or indirect participation of person having independently or by means of someone, or together with one or several persons more than 10 percent of the authorized capital or voting shares of Islamic credit institution, or the preferential share determined by National Bank of Tajikistan;

- the spread commercial risks - amount of additional risks which are born by shareholders of Islamic credit institution (at the expense of the capitals). In comparison with the fact that holders of investment accounts undertake all commercial risks connected with the assets financed by them;

- equalization methods - for the purpose of decrease in risk of money withdrawal by holders of investment accounts, the Islamic credit institution can use different methods of equalization (including, method of adjustment of share of mudarib, transfer of profit share of shareholders, creation of reserve on equalization of profit, creation of reserve of investment risk and other.). According to these methods to shareholders can or the risks connected with the assets financed by means of investment accounts cannot be transferred;

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