Regulatory Alerts | 88396On Requirements for Banks and Other Financial-Credit Organizations Regulated by the National Bank of the Kyrgyz Republic When Granting Loans to Individual Clients
The National Bank of the Kyrgyz Republic issued this ruling to protect consumer rights and enhance the safety of the banking system by imposing strict limits on penalty interest rates for loans to individuals. The regulation mandates that penalty rates for overdue principal and interest must not exceed the original loan interest rate, and total penalties over the loan term are capped at 20 percent of the loan amount. This directive applies to all commercial banks, microfinance organizations, credit unions, and the FCFS JSC, with enforcement oversight assigned to the Deputy Chairman of the National Bank.
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Creation Date: 2018-08-23
Ruling of the Board of the NCKR
No. 19/6 dated May 18, 2012
(amendments approved by the Ruling of the Board of the NCKR No. 41/9 dated October 31, 2012, and No. 2017-P-12/25-12-(NPA) dated June 15, 2017)
On Requirements for Banks and Other Financial-Credit Organizations, Licensed and Regulated by the National Bank of the Kyrgyz Republic, When Granting Loans to Individual Clients
In order to protect the rights of consumers of banking services provided by banks and financial-credit organizations licensed and/or regulated by the National Bank of the Kyrgyz Republic, in connection with the need to increase the efficiency, safety, and reliability of the banking system of the Kyrgyz Republic, as well as taking into account appeals from borrowers, in accordance with Articles 3, 4, 7, 43 of the Law of the Kyrgyz Republic "On the National Bank of the Kyrgyz Republic" and Articles 3, 4, 7, 35, 39, 39-1 of the Law of the Kyrgyz Republic "On Banks and Banking Activity in the Kyrgyz Republic", the Board of the National Bank of the Kyrgyz Republic has resolved:
(In the edition of the Ruling of the Board of the NCKR dated June 15, 2017 No. 2017-P-12/25-12-(NPA)).
- All commercial banks, microfinance organizations, credit unions, and JSC "FCFS" shall establish in the credit contract with an individual client, including an individual entrepreneur without forming a legal entity, the size of the interest rate on penalties (fines, late fees) for overdue debt on the principal amount and interest not exceeding the interest rate on the loan specified in the contract. At the same time, the size of penalties (fines, late fees) accrued for the entire period of the loan's validity shall not exceed 20 percent of the amount of the loan issued.
(In the edition of the Ruling of the Board of the NCKR dated June 15, 2017 No. 2017-P-12/25-12-(NPA)).
- The Legal Department:
- publish this ruling on the official website of the National Bank of the Kyrgyz Republic;
- after official publication, send this ruling to the Ministry of Justice of the Kyrgyz Republic for inclusion in the State Register of Regulatory Legal Acts of the Kyrgyz Republic.
- This ruling enters into force after the expiration of 15 days from the day of official publication.
Published in the journal "Regulatory Acts of the National Bank of the Kyrgyz Republic", No. 3/2012
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The Department of Supervision and Licensing Methodology shall bring this ruling to the attention of commercial banks, microfinance organizations, the specialized financial-credit institution - successor to LLC "FKPRKS", and credit unions.
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Control over the implementation of this ruling shall be entrusted to the Deputy Chairman of the National Bank of the Kyrgyz Republic Z.L. Chokoev.
Chairman of the Board of the National Bank of the Kyrgyz Republic Z. Asankozheeva
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