RESOLUTION OF BOARD OF NATIONAL BANK OF THE KYRGYZ REPUBLIC

of December 23, 2020 No. 2020-P-12/73-10-(NPA)

About modification of 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 to the following resolutions of Board of National Bank of the Kyrgyz Republic (are applied):

- "About approval of the Regulations on the economic standard rates and requirements obligatory for accomplishment of the Kyrgyz Republic by commercial banks" of July 21, 2004 No. 18/1;

- "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";

- "About approval of the Instruction "About crediting restrictions" of September 15, 2004 No. 24/4;

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

- "About approval of the Provision "About Criteria of Systemacity of Commercial Banks and Non-bank Financial Credit Institutions" of June 8, 2017 No. 2017-P-12/23-9-(NPA);

- "About approval of the Provision "About the Consolidated Supervision" and the Provision "About the Periodic Regulating Consolidated Statements" of June 28, 2019 No. 2019-P-12/34-4-(NPA).

2. This resolution becomes effective since July 1, 2021.

3. 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.

4. To management of methodology of supervision and licensing of banks to bring this resolution to the attention of OYuL "Union of Banks of Kyrgyzstan", commercial banks, JSC Finance Company of Credit Unions, JSC Garantiyny fond, the relevant structural divisions, regional managements, representative offices of National Bank in Batken Province.

5. To impose control of execution of this resolution on the board member supervising Management of methodology of supervision and licensing of banks.

Appendix

to the Resolution of Board of National Bank of the Kyrgyz Republic of December 23, 2020 No. 2020-P-12/73-10-(NPA)

Changes 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 Provision "About the Economic Standard Rates and Requirements Obligatory for Accomplishment of the Kyrgyz Republic by Commercial Banks" of July 21, 2004 No. 18/1 the following changes:

in the Provision "About the Economic Standard Rates and Requirements Obligatory for Accomplishment of the Kyrgyz Republic by Commercial Banks" approved by the above-stated resolution:

- to state the subitem 2 of Item 4.2 in the following edition:

"2) ABOUT - obligations of bank which for calculation of the standard rate (indicator) of liquidity treat:

- on-demand deposits of legal entities and physical persons in national and foreign currency, the remaining balance established by the agreement which except for is not reduced (which cannot dispose before agreement cancelation), and also money in calculations;

- the amount of term deposit (deposit) if terms of the contract provide possibility of partial replenishment and partial withdrawal by the client of money before the expiration or before other obligations, without the need for agreement cancelation and payment of penal interest rate, the remaining balance established by the agreement which except for is not reduced;

- any other obligations, including bills of exchange and other securities issued by bank, obligations on the securities sold under the return repo-agreement, calculations for which come within 30 days after reporting date, and also off-balance obligations which completion date under the agreement comes within 30 days after reporting date.

Off-balance obligations (bank guarantees, letters of credit, credit lines with unconditional obligation of execution) with uncertain completion date of the obligation when calculating liquidity rate join in calculation in the amount of 10% of the total amount of such off-balance obligations.

Note: off-balance obligations on credit lines on which each tranche is considered as the separate credit do not join in calculation of the standard rate (indicator) of liquidity.

At the same time obligations of bank according to transactions the SWAP and the forward are considered on the basis of the net value of obligations minus requirements of Bank to the partner;

- obligations of bank on metal accounts poste restante or with completion date in the next 30 days.";

- to state the subitem 2 of Item 4.9 in the following edition:

"2) KOB - short-term obligations of bank:

a) on-demand deposits of legal entities and physical persons in national and foreign currency, the remaining balance established by the agreement which except for is not reduced (which it is impossible to dispose before agreement cancelation), and also money in calculations;

b) the amount of term deposit (deposit) if terms of the contract provide possibility of partial replenishment and partial withdrawal by the client of money before the expiration or before other obligations, without the need for agreement cancelation and payment of penal interest rate, the remaining balance established by the agreement which except for is not reduced;

c) other obligations, calculations for which come within 7 days, and also off-balance obligations which completion date under the agreement comes within 7 days after reporting date. At the same time obligations of bank according to transactions the SWAP and the forward are considered on the basis of the net value of obligations minus requirements of Bank to the partner.

Off-balance obligations (bank guarantees, letters of credit, credit lines with unconditional obligation of execution) with the uncertain term of the obligation of execution when calculating liquidity rate join in calculation in the amount of 10% of the total amount of such off-balance obligations.

Note: off-balance obligations on credit lines on which each tranche is considered as the separate credit do not join in calculation of the standard rate (indicator) of short-term liquidity;

d) 50% of the total amount of the obligations to Social fund of the Kyrgyz Republic which did not enter paragraphs "and" - "in" this the subitem;

e) obligations on the depersonalized metal accounts of physical persons and legal entities poste restante and with completion date in the next 7 days.".

2. 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 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 3.8 in the following edition:

"3.8. The structure of the Supplementary capital of the First level includes the following elements:

1) "the supplementary capital brought by physical persons and legal entities" - funds deposited by physical persons and legal entities over the paid authorized capital. Need of introduction of these means arises in case of failure to carry out by bank of requirements of National Bank by the minimum size of own (regulating) capital (the capital of the First level) and/or economic standard rates, and/or with risk of their non-execution, including upon the demand of National Bank, and/or need of increase in the authorized capital to the term determined by National Bank. These means are enlisted only in the presence at bank of the contract with physical persons and legal entities on introduction of means on account of acquisition of bank shares by them with irrevocability condition (under no circumstances), indefinitenesses of the deposited funds and also on condition that in case of bankruptcy of bank requirements for these means will be met in the same queue, as requirements of shareholders of bank. The size of the supplementary capital shall be sufficient in order that the bank carried out the minimum values according to these requirements and standard rates. In subsequent funds which are in addition deposited by physical persons and legal entities shall be transformed to common and/or preferred shares, and these persons shall be given the indisputable right to acquisition of the issued shares to the amount of these provided means;

2) "preferred shares which correspond to criteria of the Supplementary capital of the First level, but not acceptable for the Basic capital of the First level". Preferred shares in this Article are specified taking into account the sum granted above their nominal value;

3) "other tools of the capital" - the tools having signs of both the capital, and debt obligation to which the non-term subordinated debt belongs.

The subordinated debt is understood unsecured by pledge as the obligation which shall not be settled ahead of schedule upon the demand of creditors and the requirement according to which in case of liquidation of bank are settled in the last queue after satisfaction of all requirements from creditors and investors, but before settlings with shareholders of bank.

The tools of the Supplementary capital of the First level emitted by bank shall correspond to the criteria established for them.";

in Appendix to the Instruction:

- state the Section "Off-balance Obligations" in the following edition:

"Off-balance obligations

(one thousand som)

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