Regulation on Minimum Requirements for Pricing Policy of Banking and Payment Services, Microfinance Organization Services, and Marketing Activities

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Creation date: 2025-01-27

Appendix
to the Resolution of the Board of the National Bank of the Kyrgyz Republic of December 29, 2021 No. 2021-P-12/75-1-(BS)

REGULATION on minimum requirements for pricing policy of banking and payment services and services provided by microfinance organizations, and for the conduct of marketing activities

(As amended by Resolutions of the Board of the National Bank of the Kyrgyz Republic of December 28, 2022 No. 2022-P-12/83-8, April 29, 2023 No. 2023-P-12/29-1, January 22, 2025 No. 2025-P-12/2-3-(NKCU)

1. General Provisions

2. The purpose of this Regulation is to ensure a systematic approach to pricing of banking services by commercial banks, payment services by payment system operators, payment organizations, and services by non-bank financial-credit organizations licensed and regulated by the National Bank of the Kyrgyz Republic (hereinafter - the National Bank), including those conducting activities in accordance with Islamic principles of banking and financing, taking into account the special terminology applied by them in conducting banking operations (hereinafter - entities providing banking services), for compliance with the antimonopoly legislation of the Kyrgyz Republic, as well as establishing minimum requirements for the conduct of marketing activities by entities providing banking services.

The requirements of this Regulation apply to entities providing banking services, in accordance with their indication in the paragraphs and sections of this Regulation.

2. For the purposes of this Regulation:

Pricing Policy is the activity of an entity providing banking services aimed at determining a pricing strategy, which must be formalized in an internal regulatory document of the entity providing banking services, regulating the process of pricing (setting prices) for various banking and payment services (products) and services provided by microfinance organizations, and their changes in accordance with changes in market conditions.

Marketing activities are the activity of commercial banks (hereinafter - banks) aimed at studying, researching, and analyzing the market and consumer demand, collecting and disseminating information about banking products and services in order to increase competitiveness in the market, as well as retaining existing and attracting new clients.

3. The size of interest rates and commission fees, as well as tariffs for the provision of banking, payment services, and services provided by microfinance organizations, are established independently by entities providing banking services in accordance with the legislation of the Kyrgyz Republic.

A service for which entities providing banking services charge commissions and other payments must meet the following requirements:

• have a separate benefit or consumer value for the client;
• be independent and separate from the main service of providing a loan;
• not relate to services that are provided free of charge in accordance with the requirements of legislation.

4. Entities providing banking services, except for payment system operators and payment organizations (not being banks), are prohibited from concluding with an affiliated person and a person related to the bank, as well as with any other person who is the owner of a trademark, a contract for the use of the trademark on a paid basis, if the beneficiary is partially or fully such a person under such a contract.

5. Requirements for the pricing policy of entities providing banking services

6. Each entity providing banking services must have a pricing policy approved by the authorized management body (board of directors - for banks and authorized management body/person - for other entities providing banking services).

7. The executive body (board - for banks and authorized executive body/person - for other entities providing banking services) is responsible for the development and implementation of the pricing policy.

8. The pricing policy, depending on the specifics of the activity of the entity providing banking services, must at least provide for the following:

1. goals and objectives of the pricing policy of the entity providing banking services in the implementation of active and passive operations, taking into account risk weighting and justification of remuneration;
2. requirement to conduct market analysis of demand and prices for banking and payment services and services provided by microfinance organizations;
3. requirement to analyze the formation of the structure of interest rates, including interest and non-interest expenses, to achieve the profitability level established by the entity providing banking services;
4. requirement to disclose the components that make up interest rates on all types of loans (including the cost of attracted funds, cost of loan servicing, operating expenses, expenses for forming a reserve to cover potential losses and losses, taxes, planned profitability rate (margin), and other costs caused by objective factors, regional and other features of the functioning of entities providing banking services), and acceptable lower and upper boundaries of interest rates for the entity providing banking services, as well as requirements for their application and periodic review;
5. requirements for disclosure of components of interest rates on all types of deposits, acceptable lower and upper boundaries of interest rates for entities providing banking services, and requirements for their application and periodic review;
6. requirements for justification of the cost of other banking, payment services, and services provided by microfinance organizations in the form of tariffs, commission fees, fixed payments, and requirements for their application and periodic review;
7. justification of the choice of method for determining prices for banking, payment services, and services provided by microfinance organizations by entities providing banking services, as well as requirements for methodologies based on realistic premises and features of the business activities of entities providing banking services;
8. powers of the management bodies and relevant structural subdivisions of entities providing banking services, their responsibility for achieving the goals of the pricing policy and implementation of the pricing strategy of entities providing banking services;
9. requirements for conducting monitoring, control, and analysis of the effectiveness of the pricing policy of the entity providing banking services;
10. requirements for timely informing clients about the terms of provision of banking and payment services and services provided by microfinance organizations, and subsequent changes and additions to the existing interest rates, commission fees, and tariffs of entities providing banking services;
11. frequency of analysis of existing tariffs and requirements for their review and submission for consideration to the authorized management body.

(As amended by Resolutions of the Board of the National Bank of the Kyrgyz Republic of December 28, 2022 No. 2022-P-12/83-8, April 29, 2023 No. 2023-P-12/29-1, January 22, 2025 No. 2025-P-12/2-3-(NKCU)

3. Requirements for the conduct of marketing activities by banks

4. Banks independently determine their marketing strategy/policy in accordance with the legislation of the Kyrgyz Republic and regulatory legal acts of the National Bank.

5. Banks are not limited in their activity in the implementation of marketing tools, except for the requirements of this Regulation.

6. Banks in the implementation of marketing activities must comply with legislation in the field of antimonopoly regulation, advertising, competition, protection of consumer rights, and regulatory legal acts of the National Bank, as well as adhere to business and professional ethics standards, the norms of which must be regulated in the internal documents of the bank.

7. Advertising about the bank, banking products and services provided, sizes of interest rates, commission fees, and tariffs, placed in mass media, on official internet sites, and other carriers (advertising brochures, roadside billboards, stands, etc.), as well as information provided during client consultation, must be truthful and complete in order to prevent misleading clients.

In cases where it is impossible to indicate full information in bank advertising, bank advertising must contain a link to the official internet site or another information carrier where full information about the terms of provision of the corresponding services is placed.

Bank advertising must contain the full name and license number in accordance with the license issued by the National Bank.

(As amended by Resolution of the Board of the National Bank of the Kyrgyz Republic of December 28, 2022 No. 2022-P-12/83-8)

12. Bank advertising must not contain information of a political nature, information about political parties and candidates for elective offices, as well as other information of a political nature.

13. Advertising about the bank, its products, and services must not be placed at places and events related to political activity, activity of candidates for elective offices, and political parties.

14. In order to ensure the accessibility of information about banking services, any advertising or publication by a bank about banking services, regardless of the method and place of its placement, must contain information about available communication channels (for example, the official internet site of the bank, telephone numbers, social networks, messengers, electronic mail, etc.).

15. For the use by a bank of photographs or video recordings depicting the client(s), audio recordings, and other information about them in advertising, marketing materials, and for other public purposes, it is necessary to obtain the consent of the client(s) in accordance with the legislation of the Kyrgyz Republic.

16. In conducting marketing activities, the bank is prohibited from:

• being the organizer of any types of lotteries in accordance with the Law of the Kyrgyz Republic "On Lotteries";
• conducting "game" events (an event, the condition of which implies competition between participants, giving the opportunity both to win and not to win depending on chance);
• sponsoring the conduct of lotteries, draws, and other game events;
• participating in the distribution of lottery tickets;
• announcing, advertising, or making public the existence of any lottery, winners of lotteries, draws, and other "game" events.

17. Banks have the right to open bank accounts for legal entities, state bodies in the conduct of their lottery activities.

18. In order to stimulate clients, reward them, attract new clients, and increase the level of use of products and banking services, banks have the right to conduct incentive events/promotions.

An incentive event/promotion of a bank is understood as an event not prohibited by this Regulation, aimed at increasing the volume of sales of existing services using various tools for stimulating, rewarding clients, and attracting new clients.

19. An incentive event/promotion of a bank cannot contain the following features:

• random determination of winning participants;
• "game" nature;
• paid participation.

20. To comply with the basic principles of banking relations, affiliated/related persons are prohibited from being participants in incentive events/promotions.

21. Incentive events/promotions of a bank must be conducted in accordance with approved documents containing the procedure/rules for conduct, list of subjects (who can participate), procedure for participation, conditions for determining the winner, formation of the prize, budget, and other requirements for the conducted incentive event/promotion.

22. The bank's announcement of the conduct of an incentive event/promotion must contain the following information:

• name of the incentive event;
• information about the organizer of the incentive event;
• conditions for conduct;
• period of conduct;
• requirements for participants;
• procedure for determining winners;
• procedure for winners to receive prizes;
• rights and obligations of participants;
• rights and obligations of the organizer;
• and other conditions.

23. The results of the conduct of incentive events must be published on the official internet site of the bank, as well as at the choice on other communication channels and information carriers.

24. In conducting a marketing event, the feature of random determination of winning participants does not apply to promotions conducted on social networks for the purpose of promotion, account visits, increasing reach, and increasing interest in the bank. The condition for participation in such promotions must not be the purchase of a banking product or service.

25. Final Provisions

26. The pricing policy and marketing policy implemented by an entity providing banking services must be transparent, comply with the requirements of the legislation of the Kyrgyz Republic on antimonopoly regulation, in the field of personal data protection, banking secrecy, on the development of fair competition and protection of consumer rights of banking, payment services, and services provided by microfinance organizations.

27. The pricing policy must be reviewed and approved by the authorized management body no less than once a year, taking into account the results and new directions of activity of the entity providing banking services.

28. Entities providing banking services are obliged to provide the pricing policy and internal documents upon request of the National Bank.

In the event of changes to the declared interest rates on deposits and loans, the entity providing banking services, within 7 (seven) working days, is obliged to notify the corresponding structural subdivision of the National Bank about the corresponding changes with submission of a detailed justification of the reasons for these changes, as well as to present internal documents (copy of the protocol and copy of the decision (extract) of the authorized body of the entity providing banking services, by which they were approved).

In the event of changes to the tariff policy, payment system operators/payment organizations within 10 (ten) working days are obliged to notify the corresponding structural subdivision of the National Bank about the changes made with submission of a detailed justification of the reasons for these changes, as well as to present internal documents (copy of the protocol and copy of the decision (extract) of the authorized body of the payment system operator