RESOLUTION OF BOARD OF NATIONAL BANK OF THE KYRGYZ REPUBLIC

of December 20, 2023 No. 2023-P-12/80-3-(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 (are 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 the Provision "About Requirements to the Standard Agreements Signed according to the Islamic Principles of Banking and Financing" of September 30, 2009 No. 39/4;

- "About approval of the Instruction for determination of standards of sufficiency (adequacy) of the capital of the banks performing transactions according to the Islamic principles of banking and financing" of December 28, 2009 No. 51/4;

- "About some regulatory legal acts of National Bank of the Kyrgyz Republic" of December 28, 2009 No. 51/6;

- "About approval of the Provision "About the Transactions Performed by the Microfinancial Organizations and Credit Unions according to the Islamic Principles of Banking and Financing" of October 26, 2011 No. 60/8;

- "About the Provision "About Corporate Management in the Banks of the Kyrgyz Republic Performing Transactions according to the Islamic Principles of Banking and Financing" of November 30, 2011 No. 67/9;

- "About approval of the Instruction "About limits of the financing performed according to the Islamic principles of banking and financing" of October 12, 2012 No. 40/1;

- "About approval of the Provision "About the Minimum Requirements on Credit Risk Management when Implementing Transactions according to the Islamic Principles of Banking and Financing" of September 25, 2013 No. 35/13;

- "About approval of the Provision "About the Minimum Requirements to Standard Agreements of the Microfinancial Organizations and the Credit Unions Concluded according to the Islamic Principles of Banking and Financing" of October 23, 2013 No. 39/9;

- "About approval of the Provision "About the Minimum Requirements on Credit Risk Management in the Credit Unions Performing Transactions according to the Islamic Principles of Banking and Financing" of December 23, 2013 No. 52/7;

- "About approval of Regulations of activities of the microfinancial organizations performing transactions by the Islamic principles of banking and financing" of May 30, 2014 No. 24/11;

- "About approval of the Provision "About Requirements to Forming of the Financial Reporting of the Commercial Banks Performing Transactions according to the Islamic Principles of Banking and Financing" of May 31, 2017 No. 21/13;

- "About approval of the Provision "About the Minimum Requirements on Risk Management in the Banks Performing Transactions according to the Islamic Principles of Banking and Financing" of July 18, 2018 No. 2018-P-12/30-3-(BS);

- "About approval of the Instruction for work with bank accounts, the accounts on bank deposits (deposits) opened according to the Islamic principles of banking and financing" of June 13, 2019 No. 2019-P-12/31-2-(NPA);

- "About approval of the Provision "About Transactions of the Commercial Banks with Precious Metals Performed according to the Islamic Principles of Banking and Financing" of November 15, 2019 No. 2019-P-12/56-3-(NPA);

- "About procedure for identification and verification of clients in the remote mode" of May 13, 2020 No. 2020-P-12/27-1-(NPA).

2. 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 inclusion in the State register of regulatory legal acts of the Kyrgyz Republic.

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

4. To management of methodology of supervision within 3 (three) working days from the date of official publication to bring this resolution to the attention of commercial banks, OYuL "Union of Banks of Kyrgyzstan", JSC Finance Company of Credit Unions, OYuL "Association of the Microfinancial Organizations", OYuL "National Association of Credit Unions and Cooperatives of Kyrgyzstan", the microfinancial organizations, credit unions having the license for attraction of deposits.

5. To department "Secretariat of Board" within 3 (three) working days to bring this resolution to the attention of all structural divisions, regional managements and Representative office of National Bank of the Kyrgyz Republic in Batken Province.

6. 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 December 20, 2023 No. 2023-P-12/80-3-(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 the Section the first:

- add the Section with Item 1.6. following content:

"1.6. Agreements according to the Islamic principles of banking and financing, including in electronic form, signed by means of the digital signature which allows to certify its accessory to the agreement party, with all appendices to them and other agreements / agreements are as agreed by the parties constituted in state language and if necessary in official language (if necessary the text of the agreement can be translated into other language). This consent is filed/is stored in the file of the client/partner.";

- add the Section with Item 1.7. following content:

"1.7. The bank is recommended to pay special attention to questions of interaction and assistance to the clients with limited opportunities of health including concerning:

- rules of etiquette in case of communication with the client;

- rules of escort of the client when making by the bank employee and client of necessary transactions within servicing;

- to application of available measures for the most comfortable servicing;

- communication with the client, but not with his attendant if the client did not choose different way of communication;

- minimization of stressful factors and complete (detailed, detailed) explanation of bank procedures in the course of customer service.";

- add the Section with Item 1.8. following content:

"1.8. In case of customer service with violation of sight or hearing the bank needs to provide sound reproduction / sign language translation of the text of the agreement and other documents signed by the client at the request of the client.

The bank shall provide to the client not capable owing to the available violations independently to put down the signature, possibility of putting down of the signature (including the facsimile signature) in the agreements and other documents signed by the client taking into account requirements of the legislation of the Kyrgyz Republic.";

- paragraph the fourth Item 2.1.3. exclude;

- Chapter 2.1. add with Item 2.1.4. following content:

"2.1.4. The agreement of mudarab is signed in writing or in electronic form, signed by means of the digital signature which allows to certify its accessory to the agreement party, with all appendices to them.";

- Item 2.2.3. state in the following edition:

"2.2.3. In the agreement the decreasing musharaka general rules of the agreement of ball / мушарака are applied, and the decreasing musharaka is not allowed to include in the agreement any provision which grants to any party the right to withdraw the share from the capital of the company.

The agreement of ball / мушарака consists in writing or in electronic form, signed by means of the digital signature which allows to certify its accessory to the agreement party, with all appendices to them.

If based on the agreement the legal entity is created, it is subject to registration according to the procedure, established by the legislation of the Kyrgyz Republic. In the formation document of partnership or the charter of the legal entity it is necessary to formulate the partnership purpose accurately.";

- in Item 2.2.17. "ethane" to replace the word with the word "stage";

in Item 2.3.1.:

- the paragraph one to state in the following edition:

"2.3.1. The agreement of murabakh is the agreement providing sale to the client by installments of the goods bought by bank according to the request of the client, or which are in property of bank by the time of the address of the client. The selling price of the subject of the agreement of murabakh to the client consists of the amount of the price of purchase of goods, markup of bank, payments to the third party (expenses on transportation, insurance, obligatory state payments and other obligatory payments for benefit of the third parties). The markup can be established in type:";

- the fifth to state the paragraph in the following edition:

"The agreement of murabakh is signed in writing or in electronic form, signed by means of the digital signature which allows to certify its accessory to the agreement party, with all appendices to them. The agreement is subject to the notarial certificate and state registration in cases, stipulated by the legislation the Kyrgyz Republic. The property right to goods passes after complete payment of the price (at discretion the bank can make the decision on transfer of property on goods before complete payment of the price of goods). If the property right is subject to state registration, registration is made in case of transfer of property (to or after complete payment). If the agreement on property acquisition is subject to state registration, the property right at the acquirer arises from the moment of its registration.";

- Item 2.3.3 in paragraph one. "written" to exclude the word;

- Item 2.3.6. state in the following edition:

"2.3.6. In the purchase and sale agreement with the supplier of goods, are specified:

- name of the parties;

- subject of the agreement;

- description of goods;

- goods quantity, price, terms and payment terms;

- delivery dates;

- rights and obligations of the Parties;

- penalties in case of default on obligations;

- providing method;

- other conditions.

The bank can sign the purchase and sale agreement as independently, and through the agent. As the agent the bank can appoint the client, at the same time the client acts for the account, for and on behalf of bank, on the conditions stipulated in the agency agreement in which the following shall be reflected: subject of the agreement, name of the parties and goods, condition, payment due dates, supporting documents purchase and sale transaction, other conditions.

In case the client acts as the agent, it is necessary to comply with the following conditions:

a) the bank itself shall pay the Seller for goods without transfer of money into the customer account acting as the agent. The bank can provide money to the client acting as the agent only in the following cases:

- if the individual entrepreneur working according to the current legislation of the Kyrgyz Republic acts as the seller of goods;

- when the goods are acquired outside the Kyrgyz Republic;

b) the bank shall take documentary confirmation of the seller about sale implementation.

The bank is allowed to provide cases of appointment of the agent for purchase of goods on behalf of the agent, but for the benefit of bank. By internal documents of bank powers and responsibility of relevant organs of bank for decision making and approval of cases of appointment of the agent for making of purchase by it on its own behalf, but for the benefit of bank shall be determined.

All documents and contracts connected with sale-purchase of goods shall be from bank name, except as specified, when the bank authorized the agent to make purchase directly on behalf of the agent.

The bank shall receive goods from the territory of the supplier or any other place which was specified in delivery conditions.

Expenses on the goods delivery are incurred by bank. These expenses in subsequent join in goods cost.

The bank takes the responsibility as the owner of goods and bears the subsequent risks which can be insured. Insurance remuneration which will arise before sale of goods to the client belongs completely to bank.

Expenses on insurance join in the price of the goods bought under the contract of murabakh.

The cumulative balance in cash, to the clients acting as the agents within agency agreements issued for purchase of goods shall not exceed 20% of portfolio of financing of bank on transactions of murabakh.";

- Item 2.4.4. add with paragraph one of the following content:

"2.4.4. In case of the positive decision from bank the lessee provides the obligation to lease property.";

- Item 2.4.18. state in the following edition:

"2.4.18. The agreement of idzhar is signed in writing or in electronic form, signed by means of the digital signature which allows to certify its accessory to the agreement party, with all appendices to them. The agreement is subject to the notarial certificate and state registration in cases, stipulated by the legislation the Kyrgyz Republic.";

- Item 2.4.1.11. state in the following edition:

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