Regulation on Minimum Requirements for Cash Operations in Commercial Banks and Non-Bank Financial-Credit Institutions of the Kyrgyz Republic (New Edition)

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Date created: 2024-01-12

APPROVED by the Resolution of the Board of the National Bank of the Kyrgyz Republic No. 9/10 dated «27» March 2013

Regulation on minimum requirements for cash operations in commercial banks and non-bank financial-credit institutions of the Kyrgyz Republic

(Amended by Resolutions of the Board of the National Bank of the Kyrgyz Republic dated June 30, 2023 No. 2023-P-13/41-3-(NPA), December 27, 2023 No. 2023-P-14/82-8-(PS))

Chapter 1. General Provisions

1. In order to organize cash circulation within the territory of the Kyrgyz Republic, the National Bank of the Kyrgyz Republic (hereinafter – the National Bank) establishes minimum requirements for conducting cash operations with the national currency of the Kyrgyz Republic in the form of banknotes and coins (hereinafter – cash) when performing banking operations and other transactions.

2. This Regulation applies to commercial banks, non-bank financial-credit organizations and payment organizations licensed and regulated by the National Bank (hereinafter – FCO).

(Amended by Resolution of the Board of the National Bank of the Kyrgyz Republic dated March 27, 2020 No. 2020-P-14/17-2-(NPA))

3. This Regulation governs cash operations conducted through the FCO cashier's office, and also establishes requirements for supporting documents, placement, equipping of peripheral devices and ensuring their security, as well as the collection (cash handling) of ATMs and automated self-service terminals.

(Amended by Resolution of the Board of the National Bank of the Kyrgyz Republic dated March 27, 2020 No. 2020-P-14/17-2-(NPA))

4. (Ceased to be in force in accordance with the Resolution of the Board of the National Bank of the Kyrgyz Republic dated June 14, 2017 No. 2017-P-13/24-2-(NPA)).

5. To provide cash services to clients, as well as to perform operations with cash and other valuables, FCOs create cashier units. Equipped cashier units, vaults and other premises of FCOs must meet the technical reinforcement and equipping requirements established by the Instruction "On Unified Requirements for Technical Reinforcement of Banks, Financial-Credit Institutions and Their Security in the Kyrgyz Republic", approved by Order of the Ministry of Internal Affairs and the National Bank of the Kyrgyz Republic dated February 11, 2010 No. 97-24-O.

6. To ensure safety when handling valuables, the FCO cashier department may consist of the following separate rooms:

• a vault or safe room;
• a counting cashier for banknotes and coins;
• incoming, outgoing, evening and other cashiers;
• a room or locker for storing personal belongings.

The expediency of creating specific cashiers, their number and the headcount of cashier staff are determined by the FCO in the established manner, which must be reflected in the internal documents of the FCO.

7. If an FCO has a vault or safe room, they must be locked with at least two keys (codes) and sealed with official seals or indicator seals, signed by persons responsible for the safety of valuables in accordance with internal FCO procedures.

8. The preparation of cash documents (except for the cash receipt), maintenance of cash journals, and completion of operation records by cashier staff may be performed using automated software, computer equipment and electronic cash registers, including in the form of electronic documents signed via electronic signature.

(Amended by Resolution of the Board of the National Bank of the Kyrgyz Republic dated June 30, 2023 No. 2023-P-13/41-3-(NPA)).

Chapter 2. Terms and Definitions

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

banknotes, coins – monetary signs of various denominations and types issued and in circulation according to the country's legislation; foreign currency valuables – cash foreign currency, payment documents and securities with nominal value and/or cost expressed in foreign currency; worn banknotes – genuine banknotes that are unsuitable for cash circulation due to damage exceeding the approved criteria for assessing worn banknotes; serviceable banknotes and coins – genuine banknotes and coins that may contain minor dirt, damage and inscriptions within the approved criteria; collection (cash handling) – receipt, collection, delivery, escort, transport, storage and handover of cash and other valuables; cashier – a specially equipped room for storing, receiving and issuing money and other valuables; evening cashier – an FCO cashier that receives and counts cash from clients and FCO subdivisions after the end of the business day; counting cashier – an FCO cashier that counts cash received from clients and FCO subdivisions, forms and packages it; incoming cashier – an FCO cashier that receives cash from clients during business hours; outgoing cashier – an FCO cashier that issues cash to clients during business hours; peripheral device cassette (hereinafter – cassette) – a part of the peripheral device used for storing, receiving and/or issuing monetary funds of various denominations. Instead of a cassette, special bags/sacks located in the safe zone may also be used, intended for storing monetary funds received by an ATM with cash-in function and an automated self-service terminal. cash book (cash journal) – accounting statements compiled in a specific form, reflecting operations with valuables, recording receipts and their issuance; cash document – a monetary document (incoming cash order, outgoing cash order, deposit notice, receipt, payment statement and other document in written form, including electronic documents signed via electronic signature serving as the basis for conducting an operation), through which and by means of which a cash operation for receiving and issuing valuables is conducted; (Amended by Resolution of the Board of the National Bank of the Kyrgyz Republic dated June 30, 2023 No. 2023-P-13/41-3-(NPA)). cash operations – receipt, counting, change, exchange, issuance, sorting, packaging and storage of valuables; client – legal and natural persons using FCO services; cash – monetary signs in the form of banknotes and coins in circulation and serving as legal tender in a corresponding state or group of states, as well as withdrawn or removed from circulation but subject to exchange monetary signs; operating cashier – an FCO cashier that serves clients on all cash operations; responsible storage – storage of valuables carried out in the established manner; valuables – foreign currency valuables, banknotes and coins, securities and strict accountability forms, precious metals, products thereof, as well as valuable items; operations for exchanging assets in national currency – operations for exchanging cash funds into non-cash funds with settlements within one day. (Amended by Resolution of the Board of the National Bank of the Kyrgyz Republic dated March 27, 2020 No. 2020-P-14/17-2-(NPA))

Chapter 3. Receipt of Cash

10. Operations for receiving cash are performed based on incoming cash documents – an incoming cash order or deposit notices (set: notice, receipt, order according to Appendix 1), filled out in accordance with the "Instruction on the Procedure for Filling Out Payment Documents", approved by Resolution of the Board of the National Bank of the Kyrgyz Republic dated July 25, 2007 No. 36/5.

11. The cashier in the incoming cash document checks the presence and correctness of all details and signatures of bank staff and the client, verifying that the amounts of cash stated in the incoming cash document match the figures and words.

12. Cash received from clients is counted sheet-by-sheet, piece-by-piece, so that the client can observe the acceptance of cash.

13. After receiving cash, the cashier verifies the amount in figures and words stated in the incoming cash document with the actual cash received, and if they match, signs all copies of the incoming cash document.

14. Cash received in the cashier is transferred by the cashier to the head cashier at the end of the working day, with the head cashier's signature recorded in the book of accounting for received and issued valuables (Appendix 2).

15. Incoming cash documents are submitted by the cashier to the head cashier at the end of the working day. Before handing over cash, the cashier must ensure that their actual amount corresponds to the sum stated in the received documents.

15-1. At the end of the working day, all incoming cash must be closed and stored in the cash vault (safe room).

Chapter 4. Disbursement of Cash

16. The head cashier issues the required amount of cash to the cashier for conducting outgoing and change operations during business hours, with the cashier's signature recorded in the book of accounting for received and issued valuables (Appendix 2).

17. In case cash operations are performed directly by the head cashier, no records of their operations in the book of accounting for received and issued valuables (Appendix 2) are made by the cashier.

18. Cash disbursement from FCO cashiers is performed based on outgoing cash orders (Appendix 3) and standard form cash receipts developed and approved by the FCO.

19. When issuing cash, the cashier performs the following actions: · checks the presence of all details and signatures of bank staff; · verifies that the amounts of cash stated in the outgoing cash document match the figures and words; · checks for the presence on the outgoing cash document of data from the passport or other identity document presented by the client; · hands over the outgoing cash document to the client for signing; · counts the prepared amount of cash under the client's observation so that the client can see the number of banknotes and coins being counted, verifies the presence of the client's signature confirming receipt of funds, issues cash, stamps the cashier stamp on the outgoing cash document and signs it.

20. The cashier may issue banknotes in bundles according to the amounts indicated on the top labels of the bundles, separate stubs, individual banknotes sheet-by-sheet, coins in bags with inscriptions on labels, in boxes with intact factory seals, and if a smaller quantity of coins is required, coins are issued in packs packaged by 100 (one hundred) pieces, individual coins – piece-by-piece.

(Amended by Resolution of the Board of the National Bank of the Kyrgyz Republic dated March 27, 2020 No. 2020-P-14/17-2-(NPA))

21. The client, without leaving the cashier, in the presence of the cashier who issued the cash, must carefully check the correctness and integrity of bundle packaging, the number of stubs in each bundle, the correctness of amounts indicated on labels; individual stubs and banknotes – count sheet-by-sheet; bags with coins by inscriptions on labels/in boxes with intact factory seals, details on packs and individual coins – piece-by-piece. In case of shortages found in received bundles, stubs or bags/boxes, an act (Appendix 4) is drawn up, signed by the cashier and the client. The shortage amount is reimbursed to the client only if the shortage was discovered during counting in the presence of the cashier. If the received amount is not counted promptly at the counting cashier, the FCO bears no responsibility for shortages.

(Amended by Resolution of the Board of the National Bank of the Kyrgyz Republic dated March 27, 2020 No. 2020-P-14/17-2-(NPA))

21-1. Operations for issuing cash, as well as operations for exchanging national currency assets, must be performed only with serviceable money. Worn money is handed over to the cashier offices of National Bank institutions.

Chapter 5. Closing of the Working Cash

22. After completing cash operations, cashier staff hand over to the head cashier cash and cash documents (reporting statements, notices, incoming and outgoing orders, inventories for transported cash). Upon receiving the specified documents, the head cashier: · verifies the quantity of incoming and outgoing documents and the cash amounts reflected in them with the data from reporting statements (Appendices 5, 6); · checks the correctness of calculating cash balances in reporting statements considering entries in the book (Appendix 2);

23. Based on reporting statements, the head cashier prepares a summary statement (Appendix 7) and verifies its totals with accounting data. The verification of the statement's totals is certified by the signature/electronic signature of an accounting staff member.

(Amended by Resolution of the Board of the National Bank of the Kyrgyz Republic dated June 30, 2023 No. 2023-P-13/41-3-(NPA)).

24. After verifying daily cash turnovers, the head cashier records in the working cash vault book (Appendix 8) the total amount of income and expense money and calculates the working cash balance for the next day. The book of accounting for foreign currency balances (Appendix 9) records the amount of foreign currency balance by type of currency for the next day. Cash books (Appendices 8 and 9) are mandatory numbered, threaded and sealed with the FCO seal. When using automated software, maintaining cash books is permitted according to output forms approved by internal normative documents of the FCO.

(Amended by Resolution of the Board of the National Bank of the Kyrgyz Republic dated March 27, 2020 No. 2020-P-14/17-2-(NPA))

25. Cash documents must be formed no later than the next working day. The formation of a file with cash documents for each day is performed by the head cashier or cashier assigned broaching functions. When forming, cash documents are sorted by balance sheet accounts, separately for incoming and outgoing cashier. When using automated software, cash documents are formed according to output forms and reports and/or in electronic form. After verifying the sum of cash documents with books (Appendices 8 and 9), a signature/electronic signature of the head cashier and the cashier who formed the file is placed on the front of the folder.

(Amended by Resolution of the Board of the National Bank of the Kyrgyz Republic dated June 30, 2023 No. 2023-P-13/41-3-(NPA)).

26. Cash documents for the current and previous calendar year are stored by the head cashier in the cash vault or a separate safe under guard.

27. Cash documents may be withdrawn from the FCO in cases and manner provided by current legislation of the Kyrgyz Republic.

Chapter 6. Transportation and Collection of Cash

28. The transportation of cash between FCOs and their branches is organized by the FCO independently or with the involvement of a collection service/organization, with which a corresponding contract is concluded. When concluding the contract, the FCO must take into account security and safety risks during transportation, as well as compensation issues in case of loss.

29. Refilling operating cashiers and handing over cash to/from the National Bank is carried out by collectors of JSC "Kyrgyz Collection" (hereinafter – JSC "KYRGYZINKA"). When receiving/handing over cash to/from the National Bank by commercial bank cashiers, collectors of JSC "KYRGYZINKA" provide armed escort, security and transportation of the bank cashier with valuables.

30. When transporting cash by collection staff, the head cashier or cashier draws up an inventory of transported valuables in three copies (Appendix 10). The first and third copies are handed to the collectors. If cash is transported by a cashier, the inventory of transported valuables is drawn up in two copies; the first copy is handed to the specified cashier. The second copy of the inventory, signed by the collector and cashier for receiving cash, remains in the FCO that sent the cash.

31. Issuing cash to collectors and the cashier for transportation is performed based on outgoing cash orders and inventories; receiving delivered cash by these staff – based on incoming cash orders. Cash is issued to collectors and the cashier in bundles of banknotes, cassettes, bags/boxes with coins, separate stubs, banknotes and coins or bags with cash.

(Amended by Resolution of the Board of the National Bank of the Kyrgyz Republic dated March 27, 2020 No. 2020-P-14/17-2-(NPA))

32. Collectors and the cashier receive bundles of banknotes, cassettes, bags/boxes with coins for transportation by inscriptions on top labels of banknote bundles, checking the number of stubs, correctness and integrity of bundle/cassette packaging and seals, impressions of stamps, presence of necessary details on top labels of banknote bundles; bags with coins – by inscriptions on labels, in boxes with intact factory seals, checking correctness of stated amounts and integrity of bags with coins and seals, presence of necessary details on seals and labels to bags/boxes with coins. Separate stubs, banknotes and coins are received sheet-by-sheet, piece-by-piece.

(Amended by Resolution of the Board of the National Bank of the Kyrgyz Republic dated March 27, 2020 No. 2020-P-14/17-2-(NPA))

33. When transporting bags with cash, a covering statement for the bags is drawn up (Appendix 12). Cash is issued to collectors/cashier packaged in bags sealed by the head cashier/cashier. A label with details and the surname, initials and signature of the head cashier/cashier is attached to the bag with cash. Bags with cash are received by collectors/cashier by inscriptions on labels, checking the integrity of bags and seals, presence of necessary details on seals and labels to bags with cash.

34. Receipt of cash and bags by the FCO is performed by the head cashier or cashier in the manner provided by this Regulation. Cash from bags with damage is received by the head cashier or cashier sheet-by-sheet, piece-by-piece in the presence of collectors and the delivering cashier. In case of surplus or shortage found when counting cash from a bag delivered by collectors, an act of counting (Appendix 4) is drawn up in three copies; from a bag delivered by the cashier – in two copies. The first copy of the counting act is sent to cash documents, the second copy to the FCO that sent the cash, and the third copy of the counting act is handed to the collectors.

35. Upon completion of receiving valuables, a signature or electronic signature of the head cashier/cashier and collectors is placed on corresponding accompanying documents.

(Amended by Resolution of the Board of the National Bank of the Kyrgyz Republic dated June 30, 2023 No. 2023-P-13/41-3-(NPA)).

Chapter 7. Minimum requirements for working with questionable, worn/damaged banknotes and coins § 1. Procedure for working with questionable, worn/damaged banknotes and coins 36. Exchange of worn banknotes and damaged national currency coins is performed in accordance with the Regulation "On Indicators of Paymentability and Rules for Exchange of Banknotes and Coins of the Kyrgyz Republic", approved by the Board of the National Bank. 37. Working with questionable national currency banknotes and coins is carried out in accordance with the Instruction on Working with Questionable Banknotes and Coins of the National Currency, approved by the Board of the National Bank. § 2. Technical equipping of the cashier unit for controlling authenticity of banknotes and coins 38. When receiving and processing cash, FCO cashier staff control the paymentability and authenticity of Kyrgyz Republic banknotes and coins in accordance with requirements specified in paragraphs 36-37. 39. FCO cashier staff must be provided with detectors and instruments for checking banknote authenticity as part of the following technical means (expert equipment):

• magnifying glass (with magnification of at least 10 times);
• instrument for controlling banknote authenticity in reflected and transmitted light;
• ultraviolet light source;
• instrument for controlling magnetic marks of banknotes;
• measuring ruler;
• instrument for visual control of marks detected in infrared rays.

40. The FCO must equip its cashier units with:

• booklets or posters on protective elements of the national currency;
• reference literature on protective properties of foreign currencies with which cash operations are performed. § 3. Training of FCO cashier staff

41. Cashier staff of FCOs having a license to accept deposits must undergo training in determining the authenticity of payment instruments and hold a corresponding certificate from an independent educational center.
42. FCO cashier staff must:

• have skills in working with instruments for controlling authenticity of national currency banknotes/coins;
• know the main protective elements of national currency banknotes;
• know modern methods of counterfeiting national currency banknotes/coins, methods of imitating protective elements and their determination methods;
• know normative documents regulating cash work and cashier personnel activities.

Chapter 8. Audit of Valuables 43. Audit of cash and other valuables located in cash vaults and FCO cashiers, and verification of their storage procedure is performed: a) by order of the FCO head and/or National Bank; b) upon change of the FCO head; c) upon change/temporary replacement of officials responsible for safety of valuables; d) in other cases provided by legislation of the Kyrgyz Republic. 44. Audit of cash and other valuables located in cash vaults and FCO cashiers may be performed by National Bank staff based on a Direction signed by the Deputy Chairman/Board Member of the National Bank. 45. Audit of cash and other valuables is performed by a panel of persons appointed by written order of the FCO head. Prepared staff not connected with performing operations with valuables are involved in conducting the audit, one of whom is appointed as its head. The head of the audit bears responsibility for correct organization and fulfillment of established rules for conducting audits. 46. Audit of cash must be conducted in such a way as not to disrupt the procedure for carrying out cash operations. 47. Audit is conducted in the presence of officials responsible for safety of cash and valuables. When conducting an audit in the absence of an official, a special note is made in the act signed by all audit participants. Upon starting the audit, its head seals with a stamp all cash vaults located in the cashier room, regardless of whether they contain valuables at the time of inspection, takes under his control all cash from the operating cashier and other valuables, checks whether there is cash, valuables and bags with cash in the evening cashier and counting cashier under collector responsibility, and if present, counts them along with other valuables. Until the end of the audit, access to officials responsible for safety of valuables into cash vaults is permitted only in the presence of the audit head, and deposits or withdrawals of cash and valuables during this period are conducted under his control. 48. Cash for control counting is selected personally by the audit head. Bundles and bags with damaged packaging and incorrectly labeled (tagged) bundles undergo sheet-by-sheet and piece-by-piece counting. 49. P