RESOLUTION OF BOARD OF NATIONAL BANK OF THE KYRGYZ REPUBLIC

of March 19, 2005 No. 6/2

About approval of new edition of the Regulations on Committee on supervision of NBKR

Having considered the project of new edition of the Provision "About Committee on Supervision of National Bank of the Kyrgyz Republic", the Board of National Bank of the Kyrgyz Republic decides:

1. Approve new edition of the Provision "About Committee on Supervision of NBKR" it (is applied).

2. To management of methodology of supervision and licensing together with Legal department to carry out in accordance with the established procedure state registration of this resolution in the Ministry of Justice of the Kyrgyz Republic.

3. Enact this resolution after state registration in the Ministry of Justice of the Kyrgyz Republic and the subsequent official publication.

4. From the moment of enforcement of this resolution to declare invalid:

- the resolution of Board of National Bank of the Kyrgyz Republic of NBKR No. 28/2 of September 10, 2003. "About Committee on supervision of NBKR" according to which the Provision "About Committee on Supervision of National Bank of the Kyrgyz Republic" is approved;

- the resolution of Board of National Bank of the Kyrgyz Republic of NBKR No. 14/9 of June 9, 2004. "About modification and amendments in the Provision "About Committee on Supervision of NBKR".

5. To management of methodology of supervision and licensing of National Bank of the Kyrgyz Republic to bring this resolution to the attention of commercial banks, JSC Settlement and Savings Company, KSFK and FKPRKS.

6. After publication of the registered regulatory legal act to inform the Ministry of Justice of the Kyrgyz Republic on publication source (the name of the edition, its number and date).

7. To impose control of execution of this resolution on Omurzakova G. M., the vice-chairman of National Bank of the Kyrgyz Republic.

Approved by the Resolution of Board of National Bank of the Kyrgyz Republic of March 19, 2005 No. 6/2

Regulations on Committee on supervision of NBKR

1. General provisions

1.1. The committee on supervision of National Bank of the Kyrgyz Republic (further - Committee) is created by board decision of National Bank of the Kyrgyz Republic (further - National Bank). The committee is permanent collegiate organ which is authorized by Board of National Bank to make decisions concerning the competence in the field of regulation and supervision of activities of commercial banks (further - banks), non-bank financial credit institutions: the microfinancial organizations, credit unions, the housing and savings credit companies, guarantee funds, credit bureaus, specialized financial credit institutions (further - NFKO), according to item 2.1., 2.1-1. and 2.2. this provision.

Consideration of the questions and decision making concerning operators of payment systems / payment institutes and exchange bureaus is not within the competence of Committee.

For the purposes of this provision the following reducings are used:

IFC - microfinance company;

MKK - the microcredit company;

MKA - the mikrocreditny agency;

FKKS - JSC finance company of credit unions.

1.2. In the work the Committee is guided by regulatory legal acts of the Kyrgyz Republic and National Bank, this Provision and the Regulations of Committee.

1.3. The staff of Committee on supervision affirms the order of National Bank.

The Vice-chairman of National bank / the board member of National Bank (the Chairman of Committee), one board member of National Bank, heads of structural divisions of National Bank - the head of department of external supervision, the head of department of inspection, the head of department of methodology of supervision and licensing, the head of department of monetary transactions, the head of department of Legal management are part of Committee.

Employees of National Bank in compliance with the order of National Bank can be part of Committee on supervision with the right of advisory vote.

2. Powers, rights and obligations of Committee

The committee determines and establishes the purposes and tasks of activities for regulation, licensing and supervision of activities of banks, NFKO and credit bureaus, and also exercises control of realization of policy of supervision of banks, NFKO and credit bureaus.

2.1. The committee according to the legislation of the Kyrgyz Republic and regulatory legal acts of National Bank makes decisions on application and/or the termination and/or change of the following types of corrective actions on banks, NFKO and credit bureaus:

a) instructions;

b) imposing of penalty on banks and NFKO, and also their officials;

c) requirements to banks and NFKO;

d) increase in economic standard rates and requirements for banks and IFC;

e) introduction of the restrictions and prohibitions established in the Law of the Kyrgyz Republic "About banks and banking activity" and/or in the legislation of the Kyrgyz Republic for banks, their shareholders and NFKO;

e) discharge or release of officials, change of governing bodies of bank and NFKO;

g) introduction of direct banking supervision according to regulatory legal acts of National Bank;

h) introduction of temporary administration in NFKO, except for the IFC attracting deposits;

i) suspension action/revocation of license of NFKO, except for IFC, attracting deposits;

j) ceased to be valid;

k) ceased to be valid;

l) suspension of action and/or withdrawal of the certificate on accounting registration of MKK/MKA.

The committee considers other questions delegated to Committee by Board of National Bank and also single questions in case of introduction and implementation of Temporary administration and liquidation of banks.

Decisions of Committee are subject to the obligatory publication on the following questions:

- about introduction of temporary administration in NFKO, except for the IFC attracting deposits;

- about suspension/revocation of license of NFKO, except for IFC, attracting deposits;

- ceased to be valid;

- about approval of officials of banks;

- approval of name/change of the bank name;

- about suspension of action and/or withdrawal of the certificate on accounting registration of MKK/MKA;

- other questions according to the decision of Committee.

2.1-1. The committee considers:

- paragraph two of ceased to be valid;

- on quarterly basis information on observance/non-compliance with banks/NFKO of economic standard rates, requirements and restrictions on results of inspection checks and external supervision, and also on results of application of regulating supervising measures concerning banks, NFKO, credit bureaus, and also exchange bureaus, including information of regional managements of National Bank and representative office of National Bank of the Kyrgyz Republic in Batken Province;

- on semi-annual basis information on observance/non-compliance with NFKO of economic standard rates, requirements and restrictions, information on results of inspection checks and external supervision, and also on results of application of regulating supervising measures concerning NFKO and exchange bureaus represented by heads of departments of supervision of regional managements and the director of representative office of National Bank of the Kyrgyz Republic in Batken Province in the respective regions.

2.1-2. Ceased to be valid according to the Resolution of Board of National Bank of the Kyrgyz Republic of 06.07.2017 No. 2017-P-12/30-3-(NPA)

2.2. The committee considers and makes decisions on the following questions:

a) determination of policy of banking supervision, supervision of NFKO and credit bureaus;

b) acceptance of regulating supervising measures in relation to banks, NFKO and credit bureaus;

c) recognition of activities of bank/NFKO, action/failure to act of officials of bank/NFKO as unhealthy and unsafe banking practice based on information provided by structural divisions of National Bank and also application within competence of Committee of adequate measure of impact concerning bank/NFKO, its shareholders (participants), officials of bank/NFKO, action (failure to act) of which are involved in unhealthy and unsafe banking practice;

d) approval of officials of commercial banks, including:

- chairman and board members;

- chairman and members of Sharia council;

- chairman of Committee on audit;

- the chairman of the board (the president, the general manager, the head of branch of foreign bank), his deputies (the vice-president, the deputy general manager, the deputy manager of branch of foreign bank) and other board members who are responsible for credit activities and/or for financing by the Islamic principles;

- the managing director who is responsible for credit activities and/or for financing by the Islamic principles of banking and financing (if the managing director is not under coaching of the chairman/deputy the chairman/board member who is responsible for credit activities and/or for financing by the Islamic principles of banking and financing);

- chief accountant;

- head of service of internal audit;

- any other persons equated on the functional obligations to above-mentioned officials including their deputies;

e) approval of officials of FKKS, including:

- chairman of the board of directors;

- chairman of the board;

- chairman of Committee on audit;

- chief accountant;

- head of service of internal audit;

e) provision of consent to acquisition 50 (fifty) and more, 67 (sixty seven) and more percent of voting shares of bank;

g) preliminary approval of the new bank name;

h) determination of further supervising actions in case of need by results of check of bank, NFKO and credit bureaus;

i) coordination and strengthening of interaction with other supervision bodies, as within the country, and foreign;

j) the decision on transfer of the corresponding materials to law enforcement agencies, and also authorized state body of the Kyrgyz Republic in the field of counteraction to financing of terrorist activities and to legalization (washing) of the criminal income on questions on which the Committee made decisions;

k) informing public on the facts of violation by bank, NFKO and credit bureaus of requirements of the legislation;

l) consideration of projects of the regulatory legal acts concerning regulation, supervision and licensing of activities of banks, NFKO and credit bureaus, if necessary;

m) consideration of questions on anti-monopoly regulation, development of the competition and consumer protection of banking services (including questions of violation of procedure for pricing, including establishment, maintenance of exclusively high (low) prices; abuses of dominant position in the market of banking services);

o) consideration of requests of banks concerning placement of foreign currency cash into the deposit account opened in National Bank;

o) on established facts of violation of the law of the Kyrgyz Republic;

p) consideration of questions on interpretation (explanation) of the decisions made by Committee. Interpretation (explanation) of the decisions made by Committee is performed by Committee by adoption of the new resolution. In case of interpretation (explanation) content of provisions, and also functional and other bonds with other provisions of the made decision of Committee requiring interpretation (explanation) speaks or specified. In the course of interpretation (explanation) of the decisions made by Committee introduction of changes in them and amendments is not allowed;

c) consideration and decision making on issue, suspension, response and cancellation of licenses within the special regulating mode, according to the Provision "About the Special Regulating Mode";

r) other questions delegated to Committee by Board of National Bank.

2.3. No. 50/13 is excluded according to the Resolution of Board of National Bank of the Kyrgyz Republic of 21.12.2012;

2.4. The committee considers and claims:

a) regulations and internal procedures of work of Committee;

b) management and other documents on supervision of activities of banks, NFKO, credit and exchange bureaus;

c) methodical recommendations and instructions, and also other documents which are not containing precepts of law, concerning activities of banks, NFKO, credit and exchange bureaus;

d) other documents and decisions according to which powers are delegated to Committee by Board of National Bank.

2.5. The committee has the right, if necessary, to discuss and submit for consideration of Board of National Bank of the offer on any questions concerning bank system, licensing and banking supervision including projects legislative and regulations of the Kyrgyz Republic in the field of regulation and supervision of activities of banks, NFKO and credit bureaus.

2.6. The employee of National Bank is appointed the secretary of Committee. Coordination, the organization of work and control of activities of the secretary of Committee are exercised by the Chairman of Committee.

3. Preparation and holding committee meetings of National Bank

3.1. Committee meetings are held regularly, at least once a month, as a rule, last Thursday of month. The committee approves the semi-annual Work plan according to which appropriate questions are considered. If necessary the Chairman of Committee convenes emergency meeting.

3.2. Members of the committee are informed on the agenda, time and the venue of planned meeting at least in two working days.

The unplanned meetings requiring the immediate solution are held according to the decision of the Chairman of Committee, or two members of the committee what in written procedure, as a rule, no later than one day prior to committee meeting the Secretary of Committee notifies members of the committee on.

3.3. The quorum of committee meeting makes 2/3 voices of members of the committee, one of which shall be the Chairman of Committee or person replacing it.

3.4. Decisions of Committee are made by a simple majority vote from number of the members of the committee who are present at meeting. In case of equality of votes, the voice of the Chairman of Committee is decisive.

3.5. Ceased to be valid according to the Resolution of Board of National Bank of the Kyrgyz Republic of 20.12.2017 No. 2017-P-12/52-12-(BS)

3.6. The official responsible for execution of the made decisions of Committee, is specified in the resolution of Committee and at least two times a year reports on execution or not execution of decisions of Committee to Committee on supervision.

3.7. The procedure for informing on the made decisions is accepted by Committee.

3.8. Committee meetings are drawn up by the protocol which after approval of members of the committee, is signed by the Chairman of Committee and the secretary of Committee. Procedures and procedure for taking the minutes are determined by Regulations of Committee.

3.9. Belongs to duties of the secretary of Committee:

a) the timely notification about date of meeting, the agenda of each member of the committee;

b) creation of the draft of the work plan of Committee for half-year;

c) creation of protocols of committee meetings and control of registration and terms of preparation of resolutions and\or decisions of Committee;

d) control of preparation and registration of materials by the structural divisions according to regulations approved by Committee including of providing members of the committee with the corresponding list of regulatory legal acts of the Kyrgyz Republic and National Bank based on which materials are prepared;

e) mailing of necessary document package and materials to all members of the committee on cases in point at the scheduled time;

e) preparation of semi-annual reports on course of execution by structural divisions of resolutions and other decisions (orders) of Committee;

g) preparation once in half a year of the report on the done work of Committee for representation to Board of National Bank.

3.10. The procedure for record keeping is established in Regulations of Committee.

3.11. The decision of Committee can be appealed according to the regulatory legal act of National Bank regulating pre-judicial procedure for regulation of disputes.

3.12. Activities of Committee stop based on the relevant decision of Board of National Bank.

4. Responsibility of the Chairman and members of the committee.

4.1. The chairman and members of the committee bear responsibility for observance and fulfillment of requirements of this provision, and also for the made decisions on the questions contradicting the legislation of the Kyrgyz Republic.

4.2. All persons, including the members of the committee preparing materials on meeting bear responsibility for completeness and accuracy of the information on the questions considered on committee meeting according to the procedure, stipulated by the legislation the Kyrgyz Republic.

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