RESOLUTION BOARD OF CENTRAL BANK OF THE REPUBLIC OF UZBEKISTAN

of December 29, 2012 No. 36/2

About modification and amendments in Regulations on requirements to adequacy of the capital of commercial banks

According to the laws of the Republic of Uzbekistan "About the Central bank of the Republic of Uzbekistan" (Sheets of Oliy Majlis of the Republic of Uzbekistan, 1995, N 12, the Art. 247), "About banks and banking activity" (Sheets of Oliy Majlis of the Republic of Uzbekistan, 1996, N 5-6, Art. 54) and the resolution of the President of the Republic of Uzbekistan of November 26, 2010 N PP-1438 "About the priority directions of further reforming and increase in stability of financial bank system of the republic in 20112015 years and achievements of high international rating rates" (2010, N 48, the Art. 442) the Board of the Central bank of the Republic of Uzbekistan decides collection of the legislation of the Republic of Uzbekistan:

1. Make changes and addition to the Regulations on requirements to adequacy of the capital of commercial banks approved by Board of the Central bank of the Republic of Uzbekistan on April 26, 2000 N 420 (рег. N 949 of July 25, 2000) (The bulletin of regulations of the ministries, state committees and departments of the Republic of Uzbekistan, 2000, N 14), according to appendix.

2. This resolution becomes effective from the date of its official publication.

Appendix

to the Resolution of Board of the Central bank of the Republic of Uzbekistan of December 29, 2012 No. 36/2

The changes and amendment brought in Regulations on requirements to adequacy of the capital of commercial banks

1. State Item 4.8 in the following edition:

"4.8. The amount of all investments into the capital of unconsolidated business entities, including debt obligations which form the capital of such business entities is subtracted from the regulatory capital.

At the same time deductions from the regulatory capital investments of banks into the companies created based on property of the production bankrupt companies implemented to banks at the auction and competitive biddings according to the Presidential decree of the Republic of Uzbekistan of November 18, 2008 N UP-4053 "About Measures for Further Increase in Financial Stability of the Companies of Real Production Sector" are not included (Collection of the legislation of the Republic of Uzbekistan, 2008, N 47, the Art. 461), and also in the companies created based on property of the production bankrupt companies accepted on balance of bankovcreditor on salvage value according to the decision of economic courts according to Procedure for realization of economically insolvent companies to the commercial banks at the auction and competitive biddings approved by the order of the President of the Republic of Uzbekistan of November 19, 2008 N R-4010 (Collection of the legislation of the Republic of Uzbekistan, 2008, N 49, of the Art. 479).".

2. The first offer of Item 5.1 to state in the following edition:

"Balance sheet assets are subdivided into five groups on risk degree: 0-, 20-, 50-, 100-and 150 percent.".

3. From the third offer of the subitem "an" of Item 5.5 of the word "delayed for 60 days and more, the credits" to exclude.

4. Add Chapter 5 with Item 5.7 of the following content:

"5.7. The risk degree is applied to assets in legal proceedings and (or) not collected in accordance with the established procedure very high (150%).".

5. State Chapter 8 in the following edition:

"8. Requirements to adequacy of the capital

8.1. The Regulatory Capital (RC) is determined as capital sum of the I level and the capital of the II level behind the deductions provided by this Provision.

8.2. Total amount of the assets weighed taking into account risk (OSAR) is determined as the amount of the balance and off-balance sheet assets weighed taking into account risk, taking into account deductions.

Since January 1, 2015 the total amount of the assets weighed taking into account risk (OSAR) will be calculated as follows:

OSAR = the Amount of the balance and off-balance sheet assets weighed taking into account risk, taking into account deductions + the Amount of the operational risks (OR) + the Amount of the market risks (MR);

SHOUTING = 10 X (The average amount of gross income of bank for the last three years of X 15%);

RR = 10 X (The total size of open foreign exchange positions X is 10%);

Gross income = (interest incomes - interest expenses) + other income.

8.3. The relation of the regulatory capital to the total amount of the assets weighed taking into account risk cannot be less than 10 percent. The coefficient of sufficiency of the regulatory capital of K1 is calculated as follows:

K1 = PK / OCAP.

Since January 1, 2016 the minimum K1 value is established in the amount of 0,115 (% 11,5).

Since January 1, 2019 banks shall provide the minimum K1 value in the amount of 0,(45 (% 14,5), taking into account the buffer of preservation of the capital in the amount of % 3,0 from the assets weighed on risk.

The buffer of preservation of the capital represents additional reserve in amount 3, of % of the assets weighed taking into account risk. The purpose of such reservation guarantee that banks will support reserve of the capital which can be used for depreciation of losses during the periods of financial and economic stress.

8.4. The capital adequacy ratio of the I level is determined as K2 = the Capital of the I level / OSAR. The minimum K2 value is equal to 0,05 (5%).

Since January 1, 2016 the minimum K2 value is established in the amount of 0,075 (% 7,5).

8.5. Along with requirements to capital adequacy, banks shall observe the coefficient of leverazh determined as result of division of the capital of the I level into the amount of general assets, less the cost of intangible assets, including goodwill:

K3 = Capital of the I level / (General assets minus Intangible assets). The minimum value of coefficient of leverazh equals 0,06 (6%).

8.6. Central Bank, can demand from banks to provide higher coefficient of adequacy of the capital, depending on the risks inherent in activities of bank, economic conditions and financial condition. Such risks include, but are not limited: in the large volume of the problem credits, net losses, high growth of assets, high risk exposure of interest rate or involvement in risky activity.".

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