RESOLUTION OF BOARD OF NATIONAL BANK OF THE KYRGYZ REPUBLIC

of June 14, 2023 No. 2023-P-12/38-3-(NPA)

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

According to Articles 5, "About National Bank of the Kyrgyz Republic" the Board of National Bank of the Kyrgyz Republic decides 9 and 64 constitutional Laws of the Kyrgyz Republic:

1. Make changes to the following resolutions of Board of National Bank of the Kyrgyz Republic it (is applied):

- "About approval of the Provision "About the Transactions Performed according to the Islamic Principles of Banking and Financing" of September 23, 2009 No. 38/8;

- "About approval of the Provision "About Bank Payment Cards in the Kyrgyz Republic" of December 9, 2015 No. 76/8.

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

3. To legal management:

- from the date of receipt of the relevant documents within 3 (three) working days to 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 after official publication within 3 (three) working days to bring this resolution to the attention of OYuL "Union of Banks of Kyrgyzstan", commercial banks, structural divisions, regional managements and Representative office of National Bank of the Kyrgyz Republic in Batken Province.

5. To impose control of execution of this resolution on the board member of the National Bank of the Kyrgyz Republic supervising management of methodology of supervision.

Appendix

to the Resolution of Board of National Bank of the Kyrgyz Republic of June 14, 2023 No. 2023-P-12/38-3-(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 Transactions Performed according to the Islamic Principles of Banking and Financing" of September 23, 2009 No. 38/8 the following changes:

in the Provision "About the Transactions Performed according to the Islamic Principles of Banking and Financing" approved by the above-stated resolution:

- in Chapter 2.1:

in Item 2.1.2.:

- in the paragraph the second the words "Limited/special Mudaraba" shall be replaced with words "The agreement of limited (special) mudarab";

- in paragraph three of the word "Unrestricted/general Mudaraba" shall be replaced with words "The agreement of unrestricted (general) mudarab";

- in paragraph four of the word "Open Mudaraba" shall be replaced with words "The agreement of open mudarab";

- Item 2.1.6. state in the following edition:

"2.1.6. In case of issue of money under the agreement of limited (special) mudarab the bank shall include in the agreement of condition, prohibiting mudariba inappropriate use of money, including issue of loans to the third parties and provision of gifts, and donations on the charitable purposes at the expense of means of financing.";

- Item 2.1.9. after the words "from transactions" to add with the words "under the agreement";

- State Chapter 2.11 in the following edition:

"Chapter 2.11

Bank payment cards

2.11.1. In this Chapter requirements to issue and servicing of debit and credit cards by banks (cards of financing) of clients are established.

2.11.2. The bank is allowed to perform issue of bank cards in case of observance of the following conditions in the agreement:

a) the bank will not charge interest payments in case of untimely payment of the necessary amount on the received financing;

b) the bank has no right to charge percent on money on the bank account when using of clients of these types of cards;

c) the bank shall cause that the client cannot use the card for the purpose of, prohibited by standards of Sharia and that the bank can block the card, cancel operation of the card in case of violation of this condition.

2.11.3. The bank when opening the account with use of bank card without fail shall explain to the client procedure of payments of income/expenses according to the card.

2.11.4. The bank has the right to provide to the card holder of privilege, not prohibited by standards of Sharia, such as privilege to discounts in hotel, airlines, reservation of restaurant, etc.

The bank has no right to allocate the card holder with privileges which are prohibited by standards of Sharia, such as life insurance, entrance to the prohibited places or the prohibited gifts.

In case of return of goods according to the current legislation of the Kyrgyz Republic, by agreement between the client and bank, the bank has the right to cover the cost which resulted from such return among which the difference can be aware of currencies, etc.

2.11.5. Debit cards

The bank debit card is intended for making of the transactions within available cash amount which are on the bank account of the client.

The client is allowed to withdraw the cash sum which is not exceeding limit of available means of the bank account to which the card is linked.

The bank can provide short-term financing / loan (overdraft) to the client with condition not of charge of percent on the provided financing/loan amount.

2.11.6. Credit cards

The credit card is intended for making of transactions with the money provided to the client as financing.

The bank shall inform the card holder on the main characteristics of credit card and specify in bank account agreement that the bank will apply penalties in case of untimely return of funds for the map with preliminary disclosure of all amounts.

The penalties and penalty fee added for delay of debt repayment go for charity.

The bank can accept the deposit from the client as guarantee, the deposit cannot be used by the card holder. The bank shall grant option to the client on introduction of warranty money on on-demand deposit under the agreement of cards or drive" айад daman, or term deposit under the agreement of unrestricted mudarab, including at the choice of specific deposit product. In case of the choice by the client of term deposit under the agreement of unrestricted mudarab, the bank has the right to invest this amount for the purpose of receipt of benefit for the client. Any income gained from this amount will be divided between bank and the client in accordance with the terms of the agreement of unrestricted mudarab.

The bank shall provide that advertizing and promotional materials on products of credit cards were extremely clear and available to perception and understanding and did not mislead clients.

During the advertizing, the publication and distribution of information banks shall open exhaustive data on the main conditions of product of credit card, with indication of all-in cost of product, and also the size of the commission.

2.11.7. The bank is allowed to join international payment systems provided that the bank will not violate the rule of Sharia.

The bank is allowed to pay membership fee, services and other payments to international payment system if they do not include percent.";

- Add Chapter 2.12 with Item 2.12.2.5. following content:

"2.12.2.5. Under the terms of the agreement drive" айад daman the bank can provide to the account holder services with use of the checkbook or cash card. In this case the bank can levy from the account holder payment for provision of services on maintaining and servicing of the current account.".

2. Bring in the resolution of Board of National Bank of the Kyrgyz Republic "About approval of the Provision "About Bank Payment Cards in the Kyrgyz Republic" of December 9, 2015 No. 76/8 the following changes:

in the Provision "About Bank Payment Cards in the Kyrgyz Republic" approved by the above-stated resolution:

- state Item 2 in the following edition:

"2. The provision "About Bank Payment Cards in the Kyrgyz Republic" (further - the Provision) determines procedure for issue, acquiring and distribution of bank payment cards in the territory of the Kyrgyz Republic, the rule of carrying out transactions, processing of the transactions made with use of bank payment cards and also general requirements to settlement systems with use of bank payment cards which perform activities in the territory of the Kyrgyz Republic and to their participants, according to the laws of the Kyrgyz Republic "About banks and banking activity", "About payment system of the Kyrgyz Republic", "About the digital signature", "About counteraction to financing of terrorist activities and to legalization (washing) of the criminal income" (further - PFTD/LPD) and regulatory legal acts of National Bank of the Kyrgyz Republic (further - National Bank), including by the Islamic principles of financing taking into account their specifics and special terminology.";

- state Item 31 in the following edition:

"31. In case of the conclusion of the agreement and opening of the bank account the issuer shall identify the card holder according to requirements to policy "know the client", established by Appendix 1 to the Instruction for the work with bank accounts, accounts on bank deposits (deposits) approved by the resolution of Board of National Bank of the Kyrgyz Republic of October 31, 2012 No. 41/12 and Appendix 1 to the Instruction for work with bank accounts, accounts on bank deposits (deposits) opened according to the Islamic principles of banking and financing, the Kyrgyz Republic approved by the resolution of Board of National Bank of June 13, 2019 No. 2019-P-12/31-2-(NPA), and the legislation of the Kyrgyz Republic, except for users of credit cards NFKO which identification is performed by NFKO, according to the legislation on PFTD/LPD. Identification data of the client of NFKO shall be tied to NFKO credit card number.".

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