Instruction on the Operation of Bank Accounts and Deposit Accounts Opened in Accordance with Islamic Principles of Banking and Finance

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Creation date: 2026-04-09

Appendix to the Resolution of the Board of the National Bank of the Kyrgyz Republic of June 13, 2019 No. 2019-P-12/31-2-(NPA)

INSTRUCTION

on the operation of bank accounts, accounts for bank deposits (deposits), opened in accordance with Islamic principles of banking and finance

(As amended by Resolutions of the Board of the National Bank of the Kyrgyz Republic of March 31, 2021 No. 2021-P-12/14-5, March 23, 2022 No. 2022-P-12/17-5, November 16, 2022 No. 2022-P-12/70-1, June 14, 2023 No. 2023-P-12/38-4, December 20, 2023 No. 2023-P-12/80-3, December 27, 2023 No. 2023-P-12/82-7, August 14, 2024 No. 2024-P-12/36-1, October 31, 2024 No. 2024-P-12/58-2-(NPA), October 8, 2025 No. 2025-P-12/50-3-(NPA), April 2, 2026 No. 2026-P-12/20-5-(NPA))

This Instruction defines the minimum requirements for the regime of operation with bank accounts, accounts for bank deposits (deposits), opened in accordance with Islamic principles of banking and finance, and the procedure for conducting transactions on them.

This Instruction defines the procedure for opening, maintaining, and closing bank accounts, accounts for bank deposits (deposits) of individuals, individual entrepreneurs, and legal entities (hereinafter referred to as clients) by commercial banks, microfinance companies, and credit unions attracting deposits, licensed by the National Bank of the Kyrgyz Republic (hereinafter referred to as the National Bank) (hereinafter referred to as banks). The requirements of this Instruction apply to microfinance companies attracting deposits, taking into account the restrictions established by the National Bank, in accordance with Article 16 of the Law of the Kyrgyz Republic "On Microfinance Organizations in the Kyrgyz Republic", and to credit unions attracting deposits, taking into account the restrictions established by the National Bank, in accordance with Article 4 of the Law of the Kyrgyz Republic "On Credit Unions".

This Instruction applies to banks and microfinance companies and credit unions attracting deposits that carry out transactions in accordance with Islamic principles of banking and finance, including within the framework of the "Islamic window" (hereinafter referred to as banks).

This Instruction does not apply to the procedure for opening and closing accounts other than a bank account agreement or a bank deposit (deposit) agreement, in accordance with the legislation of the Kyrgyz Republic.

(As amended by the Resolution of the Board of the National Bank of the Kyrgyz Republic of December 20, 2023 No. 2023-P-12/80-3)

Chapter 1. General Provisions

1. The right to attract deposits belongs to banks operating on the basis of a license issued by the National Bank of the Kyrgyz Republic (hereinafter referred to as the National Bank).

The normative documents of the bank (policies, regulations, etc.) regulating the procedure for working with bank accounts, accounts for bank deposits (deposits), must be approved by the Shariah Council.

2. The internal documents of the bank must reflect all main provisions regarding operations with bank accounts, accounts for bank deposits (deposits):

• procedure for opening bank accounts;
• procedure for opening accounts for bank deposits (deposits);
• conditions for disposing of funds placed in these accounts;
• procedure for paying funds and accrued remuneration/profit share under bank deposit (deposit) agreements;
• rights of the client and obligations of the bank towards him;
• procedure for closing bank accounts, accounts for bank deposits (deposits);
• procedure for storing information in the bank, etc., in addition, all types of internal reporting provided for by the bank must be contained, as well as the procedure for identification and study of the bank's own clients, developed in accordance with the requirements of this Instruction.

3. To prevent the conduct of transactions related to the legalization (laundering) of criminal proceeds and the financing of terrorist or extremist activities, banks are obliged to develop policies and internal control procedures corresponding to the complexity and scale of the bank's activities, including for transactions (deals) with remote access without direct contact with the client, and subject to mandatory and full compliance.

4. In order to prevent a single bank employee from performing client service operations from start to finish, the functions of bank employees must be clearly divided and reflected in the job descriptions of employees of the corresponding subdivisions of the bank. Bank employees bear personal responsibility for the performance of their duties.

5. When opening an account for a client, the bank is obliged to explain the rules for filling out the prescribed document forms and the procedure for calculating the accrued remuneration/profit share on the deposit (deposit), as well as provide other explanations.

The bank is recommended to pay special attention to issues of interaction and assistance to clients with disabilities when opening an account for them, including regarding:

• etiquette rules when communicating with the client;
• rules for accompanying the client when a bank employee and the client perform necessary operations within the framework of service;
• the application of accessible measures for the most comfortable service;
• communication with the client himself, and not with his companion, if the client has not chosen another way of communication;
• minimization of stressful factors and full (detailed, specific) explanation of banking procedures during the client's service process.

(As amended by the Resolution of the Board of the National Bank of the Kyrgyz Republic of December 20, 2023 No. 2023-P-12/80-3)

6. The basis for opening a bank account and an account for a bank deposit (deposit) is the conclusion of a bank account agreement and a bank deposit (deposit) agreement, respectively.

Opening a bank account, an account for a bank deposit (deposit), is carried out only if the bank has received all documents provided for by the legislation of the Kyrgyz Republic and this Instruction, as well as identification and verification of the client and beneficial owner in accordance with the legislation of the Kyrgyz Republic.

Banks are obliged to comply with the requirements of the legislation of the Kyrgyz Republic, including normative legal acts of the National Bank establishing other requirements not specified in this Instruction, and describing the procedure for opening and maintaining bank accounts, accounts for bank deposits (deposits), accounting for funds, and reporting to the National Bank on these accounts, as well as servicing specific legal entities when working with their bank accounts.

(As amended by the Resolution of the Board of the National Bank of the Kyrgyz Republic of December 20, 2023 No. 2023-P-12/80-3)

7. Banks must comply with the procedure and deadlines for storing records containing information about transactions with client funds, as well as information and records related to the identification of the client and beneficial owner, established by the legislation of the Kyrgyz Republic. Information in such records must be sufficient to be able to restore information about individual transactions in order to provide corresponding evidence for consideration and investigation, and contain at least the following information: transaction amount, account number, account type, transaction currency, account name, date, transaction type, payment purpose. Documents submitted when opening an account in accordance with the requirements of this Instruction must be bound and stored in the bank in a special file created for each client together with the original contract, or kept and stored electronically in a database for at least the storage periods of documents on paper carriers. At the same time, access to electronic document databases must be ensured in accordance with the legislation.

(As amended by the Resolution of the Board of the National Bank of the Kyrgyz Republic of December 20, 2023 No. 2023-P-12/80-3)

8. The basis for closing a bank account, an account for a bank deposit (deposit) is the termination of the bank account agreement, bank deposit (deposit) agreement in the manner provided for by the legislation of the Kyrgyz Republic.

Chapter 2. Terms and Definitions Used

9. The following terms and definitions are used in this Instruction:

Bank deposit (deposit) is understood in the meaning specified in Article 749 of the Civil Code of the Kyrgyz Republic.

Bank account - this is a way of reflecting contractual relations between the bank and the client regarding the acceptance of a bank deposit (deposit) and/or the performance by the bank of transactions related to the implementation of banking services for the client provided for by the bank account agreement, bank deposit agreement, legislation, Shariah standards, and customs of business turnover applied in banking practice.

Non-cash settlement is understood in the meaning specified in Article 2 of the Law of the Kyrgyz Republic "On the Payment System of the Kyrgyz Republic".

Notary deposit - this is a special account opened by a notary in a bank, in accordance with the requirements of the legislation of the Kyrgyz Republic on notaries.

Beneficial owner - a natural person (natural persons) who ultimately (through a chain of ownership and control) directly or indirectly (through third parties) owns the right of ownership or controls the client, or a natural person on behalf of or in whose interests the transaction (deal) is carried out.

Wadi'ah Yad Damanah - a guaranteed storage contract, under the terms of which the bank has the right to dispose of entrusted funds and receive profit from their placement. With regard to a Wadi'ah Yad Damanah deposit, the rules of a demand deposit (deposit) apply.

Wakalah bil Isti'mar

– this is a contract under which the agent is entrusted with the management of the principal's funds for the purpose of obtaining profit on a paid or unpaid basis.

Verification - a procedure for checking the identification data of the client and (or) beneficial owner.

Target reclamation account is understood in the meaning specified in the Regulation "On the Reclamation of Lands Damaged in the Process of Mining", approved by the Resolution of the Government of the Kyrgyz Republic of August 18, 2017 No. 517.

Escrow account - this is a special account opened on the basis of a tripartite agreement concluded between the seller, the buyer of movable/real estate, and the bank, for the purpose of transferring funds to the seller in national currency after the registration of the contract for the sale of movable/real estate.

Escrow account for virtual assets

– a special account opened on the basis of a tripartite agreement concluded between the provider of virtual asset services, the client, and the bank, intended for accounting and blocking funds until the occurrence of circumstances or fulfillment of obligations provided for in the contract, after which the bank transfers funds to the seller of virtual assets. At the same time, virtual assets are understood in the meaning of the Law of the Kyrgyz Republic "On Virtual Assets", and the bank's transactions are carried out within the framework of services with virtual assets in accordance with the Procedure for providing services related to virtual assets, approved by the Resolution of the Board of the National Bank of the Kyrgyz Republic of February 3, 2023 No. 2023-P-14/8-2-(NPA).

Depositor - this is a person who has deposited a monetary amount in the bank or on whose behalf a monetary amount has been received in the bank from a third party and has a corresponding agreement for opening and maintaining a bank account or bank deposit (deposit).

High-risk countries - states and territories (entities) that do not apply or apply insufficiently international standards for combating money laundering, terrorist financing, and financing of the proliferation of weapons of mass destruction, as well as offshore zones.

Declaration of trust - a written agreement stating that property, the right to which is held by one person, actually belongs to another person, in whose interests the legal title of ownership was transferred to the first person.

Deposit certificate - this is a security similar to a savings certificate, however, its holder can only be a legal entity. The basis of the relationship between the bank-issuer of the deposit certificate and its client is the relationship of a bank deposit (deposit).

Identification - a procedure for establishing identification data about the client and (or) beneficial owner.

Individual entrepreneur - this is a citizen of the Kyrgyz Republic, a foreign citizen, or a stateless person, permanently or temporarily residing on the territory of the Kyrgyz Republic and engaged in individual entrepreneurial activity on its territory in accordance with the current legislation of the Kyrgyz Republic.

Qayrlaman is understood in the meaning specified in the Regulation on the procedure for granting the status of qayrlaman, approved by the Resolution of the Government of the Kyrgyz Republic of June 23, 2015 No. 402.

Card - this is a contract under which one party (lender) provides the other party with capital (funds) on loan (storage) on the condition of guaranteed repayment at the first request.

Mudaraba - a contract under which one party (investor) provides capital (funds), and the other party - the mudarib (bank) accepts this capital and manages it for the purpose of obtaining profit, which is distributed proportionally between the parties in accordance with the terms of the contract.

Nominal service - this is a service where nominal persons (nominal director, shareholder, participant, etc.) are appointed to official positions in the organization or act as shareholders (participants) of the organization. At the same time, the beneficial owner actually owns and manages the organization in accordance with the contract (agreement) between the nominal person and the beneficial owner.

Nominal persons can be identified by the bank by filling out an questionnaire compiled in accordance with the requirements of the financial intelligence agency.

Nominal shareholder (participant) - this is a natural or legal entity that formally owns the securities of a legal entity by order of the beneficial owner on the basis of a contract (agreement).

Nominal director - this is a natural person who manages the organization only formally, acting on written or oral instructions of the beneficial owner on the basis of a contract concluded between them.

Financial intelligence agency - an authorized state body of the Kyrgyz Republic in the field of combating the financing of terrorist activities and the legalization (laundering) of criminal proceeds.

Risk-oriented approach - the application of enhanced measures in the presence of a high level of risk or simplified measures in the presence of a low level of risk in accordance with established risk management procedures (identification, assessment, monitoring, control, reduction of risk level).

Sanctions list - a list of natural and legal persons, groups, and organizations regarding which there is information about their participation in terrorist or extremist activities and the proliferation of weapons of mass destruction.

Savings certificate - this is a security certifying the fact of depositing funds in the bank as a bank deposit (deposit) and the right of the client to receive, after the expiration of the established term, the amount of the bank deposit (deposit) and interest on it in any subdivision of this bank. The holder of a savings certificate can only be a natural person.

Qayrlaman certificate is understood in the meaning specified in the Regulation on the procedure for granting the status of qayrlaman, approved by the Resolution of the Government of the Kyrgyz Republic of June 23, 2015 No. 402.

Natural persons - this is citizens of the Kyrgyz Republic, foreign citizens, stateless persons.

Hiba (remuneration) - a type of material reward paid to bank depositors who have placed funds on the terms of Qard and Wadi'ah Yad Damanah contracts.

Legal entity - this is an organization registered in the manner established by legislation, which has separate property in ownership, economic management, or operational management and is liable for its obligations with this property, can acquire and exercise property and personal non-property rights and obligations in its own name.

(As amended by the Resolutions of the Board of the National Bank of the Kyrgyz Republic of December 20, 2023 No. 2023-P-12/80-3, December 27, 2023 No. 2023-P-12/82-7, of October 8, 2025 No. 2025-P-12/50-3-(NPA), of April 2, 2026 No. 2026-P-12/20-5-(NPA))

Chapter 3. Types of Bank Accounts, Accounts for Bank Deposits (Deposits)

10. Bank accounts, accounts for bank deposits (deposits) can be opened and maintained in both national and foreign currencies.

Bank accounts are intended for conducting payments and settlements with third parties and are divided into:

• correspondent accounts;
• settlement (current) accounts;
• special accounts;
• accounts for bank deposits (deposits).

11. A correspondent account is a bank account on which settlements made by one bank on behalf of and at the expense of another bank based on an agreement are reflected.

12. A settlement (current) account is an account intended for storing funds and carrying out current settlements, including conducting settlements using bank payment cards, carried out by legal entities, other than banks, and individual entrepreneurs (receipts, payments, mutual settlements with other natural or legal entities, transfers to other financial and credit organizations) under a bank account agreement. A settlement account can be opened by concluding a Qard agreement.

Funds from a settlement (current) account are paid out at the first request of the client without prior notice. All settlement-monetary operations must be carried out on payment documents with mandatory indication of all necessary details.

All operations on a settlement (current) account are carried out at the direction of the client in accordance with the requirements of the legislation of the Kyrgyz Republic and the Regulation "On Non-Cash Settlements in the Kyrgyz Republic", approved by the Resolution of the Board of the National Bank of the Kyrgyz Republic of December 8, 2021 No. 2021-P-14/68-7-(PS).

(As amended by the Resolution of the Board of the National Bank of the Kyrgyz Republic of December 20, 2023 No. 2023-P-12/80-3)

13. Special accounts are accounts opened by the bank for legal and natural persons, intended for accounting and blocking funds until the occurrence of certain circumstances or fulfillment of certain obligations provided for in the contract, in accordance with the requirements of the legislation of the Kyrgyz Republic.

Special accounts may include an escrow account, a target reclamation account, a notary deposit, an escrow account for virtual assets..

(As amended by the Resolutions of the Board of the National Bank of the Kyrgyz Republic of December 27, 2023 No. 2023-P-12/82-7, April 2, 2026 No. 2026-P-12/20-5-(NPA))

14. Accounts for bank deposits (deposits) are intended for saving and accumulating funds, as well as for conducting payments and settlements. Bank deposits (deposits) may provide for the payment of remuneration. Depending on the terms of the contract, accounts for bank deposits (deposits) can be of the following types:

• account for a bank deposit (deposit) on demand Qard, Wadi'ah Yad Damanah;
• account for a term bank deposit (deposit) (hereinafter referred to as an investment Mudaraba account);
• account for a deposit on other repayment conditions (hereinafter referred to as an investment account under a Wakalah bil Isti'mar agreement).

(As amended by the Resolutions of the Board of the National Bank of the Kyrgyz Republic of November 16, 2022 No. 2022-P-12/70-1, of October 8, 2025 No. 2025-P-12/50-3)

15. An account for a bank deposit (deposit) on demand is an account used for storing and accumulating funds under a bank deposit (deposit) agreement on demand, as well as for conducting payments and settlements. A demand deposit account is serviced under Qard or Wadi'ah Yad Damanah agreements.

Under the terms of a Qard agreement, the depositor provides the bank with funds on loan on the condition of repayment and without charging a fee for it, with the possibility of the client freely disposing of them, and the bank, in turn, can use the attracted resources in accordance with its investment policy.

Under Qard and Wadi'ah Yad Damanah agreements, guaranteed profitability is not provided, payment of remuneration (Hiba) is made at the discretion of the bank.

Under the terms of Qard and Wadi'ah Yad Damanah agreements, the bank may provide the account holder with service using a checkbook or a payment card.

The Qard and Wadi'ah Yad Damanah agreement may also specify the amount for payment for bank services for maintaining a current account.

In banking activities, funds attracted on the terms of a Qard, Wadi'ah Yad Damanah agreement constitute the resource base of the bank and are considered as demand deposits.

The bank, in order to maintain the required level of current liquidity and the ability to timely fulfill obligations under Qard and Wadi'ah Yad Damanah agreements, must maintain a sufficient volume of funds in the cash register or on the correspondent account.

The feature of Qard and Wadi'ah Yad Damanah agreements is the guaranteed return by the bank of the funds received from clients in full. The client does not share risks with the bank and does not claim participation in the bank's income.

To the account for a bank deposit (deposit) on demand for individuals, opened under a Qard and Wadi'ah Yad Damanah agreement, in addition to the client's personal funds, salary, author's fees, pensions, alimony, social benefits, funds from another bank account, payments related to inheritance, payment for the sale of personal property belonging to the account holder, money transfers (including those carried out through money transfer systems without opening an account), and other receipts and payments, including payments for financing, may be credited. From the account for a bank deposit (deposit) on demand Qard and Wadi'ah Yad Damanah of an individual, the client can make personal payments, including payments for purchased goods (provided services) for personal purposes, repayments for financing, money transfers (including those carried out through money transfer systems without opening an account), utility payments, and other similar payments of a personal nature.

(As amended by the Resolutions of the Board of the National Bank of the Kyrgyz Republic of November 16, 2022 No. 2022-P-12/70-1, December 20, 2023 No. 2023-P-12/80-3)

16. Investment Mudaraba accounts are client accounts on which funds attracted by the bank on the basis of a Mudaraba agreement are reflected. Depending on the type of Mudaraba agreement, the investment account can be unlimited or limited. An investment Mudaraba account is used for storing and accumulating funds and is not intended for settlements with third parties.

The profit distribution procedure must be clear and not allow for any uncertainty or disagreement. Profit received under a Mudaraba agreement is distributed in the manner provided for in the agreement, in a proportional percentage ratio of the received profit. It is not allowed to determine the profit shares of the parties as a share of the capital of any of the parties or as a fixed amount.

The share of profit between the depositor and the bank is established by a profit participation coefficient (PPC). The bank must approve a matrix/grid of PPC depending on the type of agreements, degree of risk, size and term of the deposit, as well as methodological guidelines for their calculation.

The share of profit on investment accounts is accrued for each Mudaraba agreement on the deposit amount from the day following the day of its receipt by the bank, until the day preceding its return to the client, or its write-off from the client's account on other grounds provided for by the legislation of the Kyrgyz Republic.

In the event that losses are incurred during the performance of the Mudaraba agreement, the depositor bears losses in the amount of the sum of funds provided by him to the bank, and the bank in such a case does not receive remuneration for its work. This pr