RESOLUTION OF BOARD OF NATIONAL BANK OF THE KYRGYZ REPUBLIC

of December 28, 2016 No. 51/1

About approval of the Provision "About the Corrective Actions Applied to Operators of Payment System / to Payment Institutes"

According to articles 7 and 43 of the Law "About National Bank of the Kyrgyz Republic" Board of National Bank of the Kyrgyz Republic decides:

1. Approve the Provision "About the Corrective Actions Applied to Operators of Payment System / to Payment Institutes" it (is applied).

2. Declare invalid the resolution of Board of National Bank "About approval of the Provision "About Corrective Actions, Applied to Operators Payment Systems / to Payment Institutes" of February 24, 2016 No. 10/7.

3. To legal management:

- publish this resolution on the official site 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.

4. This resolution becomes effective after fifteen days from the date of official publication.

5. To management of payment systems to bring this resolution to the attention of structural divisions of National Bank of the Kyrgyz Republic, regional managements, representative offices of National Bank in Batken Province, operators of payment systems and payment institutes and commercial banks of the Kyrgyz Republic.

6. To impose control of execution of this resolution on the vice-chairman of National Bank of the Kyrgyz Republic L.Dzh. To Orozbayev.

Appendix

to the Resolution of Board of National Bank of the Kyrgyz Republic of December 28, 2016 No. 51/1

Regulations on the corrective actions applied to operators of payment systems / to payment institutes

Chapter 1. General provisions

1. Ceased to be valid according to the Resolution of Board of National Bank of the Kyrgyz Republic of 08.06.2017 No. 2017-P-14/23-12-(PS)

2. This Provision determines corrective actions, procedure for application of corrective actions to operators of payment systems (except banks and other financial credit institutions), to payment institutes which perform the activities in the territory of the Kyrgyz Republic according to the legislation of the Kyrgyz Republic.

3. Corrective actions are applied by National Bank of the Kyrgyz Republic (further - National Bank) according to the procedure, stipulated by the legislation the Kyrgyz Republic and this Provision.

4. The purpose of application by National Bank of corrective actions is protection of interests of users of payment systems, maintenance and ensuring efficiency, safety and reliability of payment systems, counteraction of legalization (washing) of the criminal income and to financing of terrorist or extremist activities.

5. The National Bank has the right to apply corrective actions to operators of payment systems / to payment institutes in cases:

- violations of the law of the Kyrgyz Republic;

- counteractions when implementing of supervising functions by National Bank;

- implementation of the dummy and doubtful activities which do not have real covering which are prohibited according to the legislation on counteraction of legalization (washing) of the criminal income and financing of terrorist or extremist activities of the Kyrgyz Republic;

- action or failure to act of operators of payment systems / payment institutes which involve threat to interests of participants and users of payment systems,

- systematic provision (two and more times during 12 (twelve) consecutive calendar months) the untimely/wrong / doubtful / distorted / incomplete reporting and/or other information in National Bank;

- delays of the beginning of activities as the operator of payment system / payment institute more than for 1 (one) from the moment of licensing.

6. The National Bank has the right to direct the prevention according to the procedure of informing the operator of payment system / payment institute that they break certain regulations and rules or are engaged in the activities menacing to safety and reliability of payment system and also for the purpose of the prevention that further adequate measures of impact can be applied to them. The prevention is not corrective action.

Chapter 2. Corrective actions and their application

7. This Provision determines the following corrective actions applied to operators of payment systems / to payment institutes:

- instruction;

- temporary suspension or restriction for carrying out separate payment types and transactions within the license;

- revocation of license.

The National Bank has the right to apply penalty to operators of payment systems / to payment institutes for the administrative offense including revealed during inspection checks, according to the procedure, provided according to the Instruction for hearing of cases about administrative offenses in the field of the bank law approved by the resolution of Board of National Bank of August 26, 2015 No. 49/9.

8. Corrective actions are applied depending on situation, complexity and gravity of violation and effects to users and members of payment service providers. In case of application of corrective actions their priority and the sequence is not provided.

9. The decision on application of adequate measures of impact is made by Committee on payment system of National Bank.

10. The instruction about elimination of the revealed violations goes to certain time to operators of payment systems / to payment institutes in cases:

- non-presentations of the financial reporting or other reporting determined by regulatory legal acts of National Bank, the conclusion of the external auditor and applications to it in installed by National Bank terms;

- provisions in несвоевременной/неправильной/недостоверной/искаженной/неполной National Bank of information, including during conducting inspection checks;

- lack of the technical documents supporting the hardware and software;

- counteractions when implementing by the staff of National Bank of supervising functions;

- violations of the bank law of the Kyrgyz Republic.

11. The decision on temporary suspension or restriction for carrying out separate payment types and transactions within the license is accepted depending on nature and extent of violation.

12. The decision on temporary suspension of the license is applied in any of cases:

- assumption systematic (2 and more times during 12 consecutive calendar months) violations of the bank law of the Kyrgyz Republic.

- insolvency of the operator of payment system / payment institute;

- systematic counteraction to the staff of National Bank in case of execution of supervising functions by them.

13. Restriction for carrying out separate payment types and transactions within the license is accepted in cases:

- assumptions of systematic failure to carry out (two and more times during 12 (twelve) consecutive calendar months) instructions and/or requirements of National Bank;

- participation in the transactions prohibited by the legislation of the Kyrgyz Republic including in cases, stipulated by the legislation on counteraction of legalization (washing) of the criminal income and financing of terrorist or extremist activities;

- violations of the law of the Kyrgyz Republic, including the antitrust law and the legislation on counteraction of legalization (washing) of the criminal income and financing of terrorist or extremist activities, and requirements of National Bank regarding regulation of activities of operators of payment systems / payment institutes;

- detection of insolvency or non-execution of financial liabilities before service providers and/or users of payment services.

14. Depending on whether the causes of temporary suspension or restriction for carrying out separate payment types and transactions are removed, the license can be recovered or withdrawn.

15. Action of the license is resumed National Bank from the date of, the expiration following behind day on which it was suspended the license, on condition of elimination of payment system by the operator / payment institute of violations of requirements or before the expiration of fixed term for which it was suspended the license in case of early elimination of violations of requirements by the operator of payment system / payment institute.

16. In case of early elimination of the revealed violations the operator of payment system / the payment institute notifies National Bank on it in writing with provision of the relevant documents. The National Bank, in turn, has the right to carry out inspection inspection.

17. The National Bank carries out inspection inspection regarding elimination of the revealed violations in 30-days time or no later than five working days from the date of receipt of the notification of the operator of payment system / payment institute about early elimination of violations. By results of check sends to the operator of payment system / payment institute in writing the decision on renewal of action of the license or on refusal in its renewal with the corresponding reasons and enters the corresponding data in the register.

18. The license is considered renewed the action from the date of entering of data on it into the register and notifications of the operator of payment system / payment institute. The operator of payment system / payment institute has the right to appeal the decision of National Bank on refusal in the renewal of action of the license according to the procedure established by the legislation of the Kyrgyz Republic.

19. Revocation of license is made in that case when activities of the operator of payment system / payment institute involve real threat to interests of participants and users of payment services and applied in the following cases:

- in case of violation of the law of the Kyrgyz Republic;

- in case of detection of insolvency or non-execution (two and more times during 12 (twelve) consecutive calendar months) financial liabilities before service providers and/or users of payment systems;

- in case of delay of the beginning of activities as the operator of payment system / payment institute more than for 1 (one) from the moment of licensing.

20. Revocation of license of activities of the operator of payment system / payment institute involves the termination of the activities specified in the license according to the legislation of the Kyrgyz Republic.

21. The committee on payment system of National Bank can make the decision on revocation of license without preliminary application of other corrective actions for decrease in risks in payment system and protection of the rights of users of payment systems.

22. The decision of Committee on payment system of National Bank becomes effective from the date of its acceptance and the notification of the operator of payment system / payment institute.

23. The operator of payment system / payment institute within three working days after receipt of the decision of Committee on payment system of National Bank on revocation of license shall hand over the original of the license in National Bank.

24. The National Bank enters the corresponding record about revocation of license in the register and information is posted on the official site of National Bank.

25. In case of temporary suspension or restriction of carrying out separate payment types and transactions, suspension/revocation of license and voluntary liquidation of the operator of payment system / the National Bank sends to payment institute the notification to all commercial banks, to service providers, operators of payment systems / to payment institutes.

For the purpose of informing process acceleration, and also fixation of time and date of informing the National Bank directs the copy of the notification on application of corrective action to official e-mail addresses of members of payment service provider with possible further dosyl of paper option.

Chapter 3. Procedure for completion of payments of the operator of payment system / payment institute

26. From the moment of temporary suspension / revocation of license or voluntary liquidation the operator of payment system / payment institute shall stop completely implementation of activities on:

- to acceptance and carrying out payments and calculations for the goods and services which are not result of the activities for benefit of the third parties by means of the payment systems based on information technologies and electronic means, and methods of carrying out payments;

- to rendering services in acceptance, processing and issue of financial information (processing, clearing) on payments and calculations of the third parties to members of payment service provider, this processing, clearing center.

27. If from the moment of temporary suspension / restriction / revocation of license or voluntary liquidation in system of the operator of payment system / payment institute payments (until shutdown of system arrived and in case of current agreements with service providers and members of payment service providers), these payments shall be accepted, complete and paid by the operator of payment system / payment institute. Information on completion of these payments shall be provided in paper form in National Bank no later than the next day of delivery, publications, announcements or bringing to data of the decision of Committee on payment system of National Bank in time.

Chapter 4. Final provisions

28. Appeal of measures for the decision of Committee on payment system of National Bank on application of corrective actions to operators of payment systems / to payment institutes and/or their officials is performed according to the Provision "On Pre-judicial Regulation of Disputes between the National Bank of the Kyrgyz Republic and Commercial Banks, the Organizations Performing Separate Types of Banking Activities and Their Founders (Participants), Legal Entities and Physical Persons" approved by the resolution of Board of National Bank of May 17, 2017 No. 19/13.

29. If as the operator of payment system / payment institute the bank or other financial credit institution acts, corrective action is applied according to the Provision "About the Corrective Actions Applied to the Banks and Some Other Financial Credit Institutions Licensed by National Bank of the Kyrgyz Republic".

 

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