Regulation on the Temporary Administration

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Creation date: 2025-10-16

Appendix
to the Resolution of the Board of the National Bank of the Kyrgyz Republic of June 8, 2017 No. 2017-P-12/23-8-(NPA)

REGULATION

on the Temporary Administration

(As amended by the Resolutions of the Board of the National Bank of the Kyrgyz Republic of April 10, 2019 No. 2019-P-12/19-1, November 1, 2019 No. 2019-P-33/55-3, March 27, 2020 No. 2020-P-14/17-1, December 23, 2020 No. 2020-P-33/73-13, December 28, 2022 No. 2022-P-12/83-6, January 17, 2024 No. 2024-P-12/1-3, October 8, 2025 No. 2025-P-12/50-4)

Chapter 1. General Provisions

1. This Regulation defines the grounds, procedures for introduction and implementation of the Temporary Administration, and the implementation of restructuring of commercial banks, microfinance organizations attracting deposits, JSC "Financial Company of Credit Unions", credit unions attracting deposits, including those carrying out operations in accordance with Islamic principles of banking and financing or having an "Islamic window", housing savings credit companies, credit bureaus, taking into account the special terminology applied by them in carrying out banking operations (hereinafter referred to as "banks"), as well as payment organizations/payment system operators (hereinafter referred to as "PO/PSO"). At the same time, restructuring procedures do not apply to credit unions and PO/PSO.

This Regulation applies to credit unions and PO/PSO taking into account the features of their activities in accordance with the legislation of the Kyrgyz Republic.

(As amended by the Resolutions of the Board of the National Bank of the Kyrgyz Republic of March 27, 2020 No. 2020-P-14/17-1, December 23, 2020 No. 2020-P-33/73-13, January 17, 2024 No. 2024-P-12/1-3)

2. This Regulation uses definitions set forth in the laws of the Kyrgyz Republic "On Banks and Banking Activity" and "On the Payment System of the Kyrgyz Republic", as well as the following concepts:

Temporary Administration is introduced by the National Bank of the Kyrgyz Republic (hereinafter referred to as the "National Bank") as a measure of influence for the purpose of establishing control over:

• a bank to ensure the preservation of assets, documents, and information, protect the rights and legitimate interests of depositors and other creditors of the bank, ensure the stability and safety of the banking system of the Kyrgyz Republic, as well as to establish the real situation in the bank and determine its further activities;

• PO/PSO to protect the rights and legitimate interests of users of payment systems, maintain and ensure the efficiency, safety, and reliability of payment systems, as well as to establish the real situation in the PO/PSO and determine its further activities.

Temporary Administrator - a person appointed by the National Bank as a temporary administrator or head of the temporary administration for the purpose of implementing the temporary administration regime in a bank/PO/PSO.

Resistance to the Temporary Administration - an action or inaction by the management bodies and/or individual officials and employees of the bank/PO/PSO (branch/subsidiary) and other persons associated with the bank/PO/PSO, hindering or making it impossible for the temporary administrator or head/members of the temporary administration to perform the functions defined by the Law of the Kyrgyz Republic "On Banks and Banking Activity" and this Regulation.

Act on Resistance to the Implementation of the Temporary Administration - a document drawn up for each fact of resistance by the management bodies and/or individual officials and/or employees of the bank/PO/PSO (branch/subsidiary) and other persons associated with the bank/PO/PSO to the implementation of the Temporary Administration.

Supervisory Body - structural subdivisions of the National Bank, the Supervisory Committee of the National Bank (hereinafter referred to as the "Supervisory Committee"), the Payment System Committee of the National Bank (hereinafter referred to as the "Payment System Committee"), provided for by the organizational structure of the National Bank.

Restructuring of a bank - a set of measures taken with respect to a bank for the purpose of protecting the interests of depositors and other creditors, preserving the continuity of functions of the bank that are systemically important for the banking or payment system, as well as ensuring the stability of the banking and financial system.

(As amended by the Resolutions of the Board of the National Bank of the Kyrgyz Republic of March 27, 2020 No. 2020-P-14/17-1, December 28, 2022 No. 2022-P-12/83-6)

Chapter 2. Introduction of the Temporary Administration

3. The Temporary Administration is introduced into a bank/PO/PSO in the presence of grounds specified in the Law of the Kyrgyz Republic "On Banks and Banking Activity", as well as normative legal acts of the National Bank.

(As amended by the Resolution of the Board of the National Bank of the Kyrgyz Republic of December 28, 2022 No. 2022-P-12/83-6)

4. The decision to introduce the Temporary Administration and appoint a Temporary Administrator/head of the Temporary Administration is made by the Board of the National Bank (hereinafter referred to as the "Board")/Supervisory Committee/Payment System Committee of the National Bank upon the petition of the supervisory body.

The decision of the Board/Supervisory Committee/Payment System Committee of the National Bank on the introduction of the Temporary Administration and the appointment of the Temporary Administrator/head of the Temporary Administration is оформляется (formalized) by a resolution and enters into force from the moment of its adoption, unless otherwise provided in the resolution itself.

(As amended by the Resolution of the Board of the National Bank of the Kyrgyz Republic of March 27, 2020 No. 2020-P-14/17-1)

5. The decision to introduce the Temporary Administration and appoint a Temporary Administrator/head of the Temporary Administration may be made by the Board/Supervisory Committee/Payment System Committee of the National Bank upon the application of the Board, Board of Directors, creditors, and shareholders of the bank, members of the executive body and/or shareholders (founders)/participants of the PO/PSO, as well as upon appeal by law enforcement, judicial, and other authorized state bodies, which must specify the grounds for the appointment of the Temporary Administration.

(As amended by the Resolution of the Board of the National Bank of the Kyrgyz Republic of March 27, 2020 No. 2020-P-14/17-1)

6. In the event that the introduction of the Temporary Administration is initiated by the persons specified in paragraph 5 of this Regulation, they must provide the National Bank with the following documents when applying:

• a statement regarding the non-payment of the bank's creditor debt for the next 5 (five) working days after the due date of payment, or the presence of other grounds for introducing the Temporary Administration, in accordance with the legislation of the Kyrgyz Republic;

• a statement regarding the non-fulfillment by the PO/PSO of financial obligations to participants and/or users of the payment system and/or inability to repay obligations for the next 5 (five) working days after the due date for carrying out settlements, or the presence of other grounds for introducing the Temporary Administration, in accordance with the legislation of the Kyrgyz Republic;

• justification for the necessity of introducing the Temporary Administration into the bank/PO/PSO with reference to the corresponding normative legal acts and attached confirming documents.

The supervisory body considers the specified documents within 20 (twenty) working days and, in case of justification and necessity of introducing the Temporary Administration, based on the submitted documents, submits a petition for consideration by the Board/Supervisory Committee/Payment System Committee of the National Bank to make a decision.

(As amended by the Resolution of the Board of the National Bank of the Kyrgyz Republic of March 27, 2020 No. 2020-P-14/17-1)

7. The petition for the introduction of the Temporary Administration in a bank/PO/PSO must contain:

• information about the bank, branches, savings offices, subsidiaries, and dependent companies, the structure of the banking group (if applicable), or information about the PO/PSO, subsidiaries, and dependent companies (if applicable);

• justification for the appointment of the Temporary Administration;

• information about the financial condition of the bank/PO/PSO (including the results of the latest comprehensive and targeted inspections);

• a proposal for the term of the Temporary Administration, but not more than 6 (six) months;

• a proposal for the composition of the Temporary Administration (candidates for Temporary Administrator, members of the Temporary Administration) with information on the compliance of the candidates with the requirements imposed by the National Bank;

• proposals (if available/necessary) on introducing restrictions on the activities of the bank/PO/PSO with justification;

• a list of correspondent banks of the bank and/or a list of suppliers of goods/services, payment organization agents, PSO counterparties;

• other information.

(As amended by the Resolution of the Board of the National Bank of the Kyrgyz Republic of March 27, 2020 No. 2020-P-14/17-1)

8. The resolution of the Board/Supervisory Committee/Payment System Committee of the National Bank on the introduction of the Temporary Administration and the appointment of the Temporary Administrator/head of the Temporary Administration specifies:

• the full official and abbreviated name of the bank/PO/PSO, regarding which the decision to introduce the Temporary Administration is made;

• grounds for introducing the Temporary Administration (including references to normative legal acts);

• the date and time of the start of the Temporary Administration regime;

• the term of the Temporary Administration regime;

• the operating mode of the bank, including the procedure for the bank's settlements and payments (if necessary), or the operating mode of the PO/PSO, including rules and procedures for accepting payments on behalf of third parties/payment processing;

• a list of activity restrictions (if necessary) imposed on the bank/PO/PSO;

• information about the appointed Temporary Administrator, as well as persons involved in the Temporary Administration, including employees of the National Bank;

• an order or instruction mandatory for execution by the Temporary Administration (if necessary);

• deadlines for the acceptance of documents, assets, and valuables of the bank/PO/PSO by the Temporary Administration;

• a requirement to notify correspondent banks of the appointment of the Temporary Administration and/or a requirement to notify banks, PO/PSO;

• deadlines and procedures for submitting the expense estimate and reporting by the Temporary Administration to the National Bank.

The resolution of the Board/Supervisory Committee/Payment System Committee of the National Bank on the introduction of the Temporary Administration and the appointment of the Temporary Administrator/head of the Temporary Administration may contain other provisions necessary for the fulfillment of tasks and functions assigned to the Temporary Administration.

The Supervisory Committee has the right to make decisions on changing the operating mode of the bank, including the procedure for the bank's settlements and payments, as well as lifting activity restrictions imposed on the bank.

(As amended by the Resolutions of the Board of the National Bank of the Kyrgyz Republic of March 27, 2020 No. 2020-P-14/17-1, October 8, 2025 No. 2025-P-12/50-4)

9. The distribution of duties among persons involved in the composition of the Temporary Administration is determined by the Temporary Administrator.

10. The resolution of the Board/Supervisory Committee/Payment System Committee of the National Bank on the introduction of the Temporary Administration and the appointment of the Temporary Administrator/head of the Temporary Administration is brought to the attention of the management bodies of the bank/PO/PSO by the supervisory body within 1 (one) working day from the moment of the decision to introduce the Temporary Administration, unless otherwise provided in the resolution itself.

A copy of the resolution of the Board/Supervisory Committee/Payment System Committee of the National Bank is handed to the Chairman of the Board of Directors or the head of the bank, the head of the executive body, or the head of the PO/PSO under signature with the date and time of handing over indicated on the second copy of the copy, which is kept by the Temporary Administrator until the termination of their powers. A copy of the second copy of the resolution with the signature of receipt by the bank/PO/PSO is provided by the Temporary Administrator to the supervisory body.

(As amended by the Resolution of the Board of the National Bank of the Kyrgyz Republic of March 27, 2020 No. 2020-P-14/17-1)

11. Upon making a decision to introduce the Temporary Administration, the supervisory body within 1 (one) working day from the moment of the decision to introduce the Temporary Administration:

• in the bank: sends a notification letter to organizations providing services on interbank settlement and payment systems, all commercial banks, the Agency for the Protection of Deposits of the Kyrgyz Republic (hereinafter referred to as the "Agency for the Protection of Deposits"), CJSC "Interbank Processing Center", unless otherwise provided in the resolution itself;

• in the PO/PSO: sends a notification letter to banks, all PO/PSO, unless otherwise provided in the resolution itself.

The notification letter must contain the following:

• the name of the bank/PO/PSO in which the Temporary Administration has been introduced;

• a message about the start of the Temporary Administration with the number and date of the adoption of the corresponding resolution of the Board/Supervisory Committee/Payment System Committee of the National Bank;

• the date and time of the start of the Temporary Administration;

• the terms of the introduction of the Temporary Administration;

• the full name of the Temporary Administrator;

• a sample signature of the Temporary Administrator.

(As amended by the Resolution of the Board of the National Bank of the Kyrgyz Republic of March 27, 2020 No. 2020-P-14/17-1)

12. The Temporary Administration is introduced for a term of up to 6 months. The action of the Temporary Administration may be extended once by the Board/Supervisory Committee/Payment System Committee of the National Bank for a term of no more than 6 months.

(As amended by the Resolution of the Board of the National Bank of the Kyrgyz Republic of March 27, 2020 No. 2020-P-14/17-1)

13. A message about the start of the Temporary Administration is published in the mass media and on the website of the National Bank.

Chapter 3. Composition of the Temporary Administration

14. The composition of the Temporary Administration is determined depending on the nature and volume of the upcoming work.

In addition to the Temporary Administrator, the composition of the Temporary Administration may include persons attracted by the Temporary Administrator and/or employees of the National Bank.

15. A Temporary Administrator may be a person who meets the qualification requirements established by this Regulation. Employees of the National Bank cannot be Temporary Administrators.

16. The Temporary Administrator acts on the basis of a contract concluded with the National Bank, which specifies the duties, liability, working conditions, and remuneration of the Temporary Administrator.

17. Members of the Temporary Administration who are employees of the National Bank are appointed by the Board/Supervisory Committee/Payment System Committee of the National Bank to participate in the work of the Temporary Administration and perform functions and powers according to the distribution of duties established by the Temporary Administrator.

A decision on changing the composition of the Temporary Administration in a bank is made by the Supervisory Committee.

(As amended by the Resolutions of the Board of the National Bank of the Kyrgyz Republic of March 27, 2020 No. 2020-P-14/17-1, October 8, 2025 No. 2025-P-12/50-4)

18. Officials and affiliated persons of the bank/PO/PSO, in which the Temporary Administration is appointed, as well as persons who have a conflict of interest, cannot be appointed to the composition of the Temporary Administration. These requirements also apply to employees of the National Bank. At the same time, the performance of certain powers may be entrusted to officials of the bank/PO/PSO at the discretion of the Temporary Administrator. Such delegation must be оформлено (formalized) by a corresponding order/directive of the Temporary Administrator.

(As amended by the Resolution of the Board of the National Bank of the Kyrgyz Republic of March 27, 2020 No. 2020-P-14/17-1)

19. With the agreement of the Agency for the Protection of Deposits, employees of the bank may be included in the composition of the Temporary Administration of the bank on issues of establishing compliance of deposit information with certain requirements, the volume and structure of the bank's obligations to depositors, payment of contributions to the Deposit Protection Fund, as well as the fulfillment by the bank of other obligations established by the legislation of the Kyrgyz Republic.

(As amended by the Resolution of the Board of the National Bank of the Kyrgyz Republic of March 27, 2020 No. 2020-P-14/17-1)

20. The civil liability of the Temporary Administrator is subject to mandatory insurance.

21. The Board/Supervisory Committee/Payment System Committee of the National Bank has the right to appoint another temporary administrator in the event of:

• absence of the Temporary Administrator due to illness or other reasons that threaten the conduct of the Temporary Administration;

• violation by the Temporary Administrator of the terms of the contract concluded with the National Bank;

• untimely, incomplete and/or incorrect submission of reports by the Temporary Administrator, as well as other officially provided documents and information, including distortion of financial reporting;

• inability to act, perform functions and duties imposed on the temporary administrator by the Law of the Kyrgyz Republic "On Banks and Banking Activity" and this Regulation;

• violation of the requirements of the legislation of the Kyrgyz Republic;

• intentional actions or inactions of the Temporary Administrator hindering the achievement of the goals of the Temporary Administration;

• termination of the contract concluded with the National Bank upon personal application/petition of the Temporary Administrator.

(As amended by the Resolutions of the Board of the National Bank of the Kyrgyz Republic of April 10, 2019 No. 2019-P-12/19-1, March 27, 2020 No. 2020-P-14/17-1, December 28, 2022 No. 2022-P-12/83-6)

Chapter 4. Qualification Requirements for the Temporary Administrator

22. A candidate for the position of Temporary Administrator must meet the following minimum requirements:

1. have a diploma of higher education;

2. have work experience of no less than 5 (five) years in the financial-banking system, including at managerial positions for no less than 2 (two) years (for the position of Temporary Administrator of a bank);

2-1) have work experience of no less than 5 (five) years in the financial-banking system, including experience in the payment system (for the Temporary Administration of PO/PSO), including at managerial positions - no less than 1 (one) year (for the position of Temporary Administrator of PO/PSO);

3. possess knowledge in the field of legislation of the Kyrgyz Republic regulating banking activity, including management of banking risks (for the position of Temporary Administrator of a bank);

3-1) possess knowledge in the field of legislation of the Kyrgyz Republic regulating payment systems, including risk management in the payment system (for the position of Temporary Administrator of PO/PSO);

4. possess an impeccable business reputation;

5. absence of a conflict of interest with persons associated with the bank, creditors and borrowers of the bank, as well as with associated persons with PO/PSO, suppliers of goods/services and payment organization agents and PSO counterparties, into which the Temporary Administration is introduced.

(As amended by the Resolution of the Board of the National Bank of the Kyrgyz Republic of March 27, 2020 No. 2020-P-14/17-1)

23. Combining the work of a temporary administrator with positions in banks, non-bank financial-credit organizations, or other legal entities under the supervision of the National Bank, as well as in other organizations, including on a part-time basis (with the exception of teaching, scientific research, and creative activities) is not permitted.

(As amended by the Resolution of the Board of the National Bank of the Kyrgyz Republic of December 28, 2022 No. 2022-P-12/83-6)

24. In order to prevent a conflict of interest, candidates for the positions of Temporary Administrator and members of the Temporary Administration submit information about their personal data and business interests according to Appendix 6 to this Regulation.

25. Candidates for the positions of Temporary Administrator and members of the Temporary Administration submit completed questionnaires according to Appendix 7 to this Regulation. Questionnaires are included in the list of materials for the Board/Supervisory Committee/Payment System Committee of the National Bank when making a decision on the appointment of the Temporary Administration.

(As amended by the Resolution of the Board of the National Bank of the Kyrgyz Republic of March 27, 2020 No. 2020-P-14/17-1)

26. Information on personal data and business interests is submitted upon appointment/extension of the Temporary Administration and upon changes in the submitted information. This information must be included in the list of materials for the Board/Supervisory Committee/Payment System Committee of the National Bank when making a decision on the appointment of the Temporary Administration.

(As amended by the Resolution of the Board of the National Bank of the Kyrgyz Republic of March 27, 2020 No. 2020-P-14/17-1)

Chapter 5. Implementation of the Temporary Administration

27. From the moment of introduction of the Temporary Administration:

1. the powers of the management bodies of the bank/PO/PSO and officials are suspended and transferred to the Temporary Administration. After that, all decisions of the management bodies are considered unauthorized unless approved by the Temporary Administration. The Temporary Administration exercises all powers of the management bodies:

• of the bank in accordance with the charter of the bank and the legislation of the Kyrgyz Republic, except for the power to make a decision on voluntary liquidation;

• of the PO/PSO in accordance with the charter of the PO/PSO and the legislation of the Kyrgyz Republic, except for the power to make a decision on voluntary liquidation;

2. only the Temporary Administration has the right to act on behalf of the bank/PO/PSO, as a legal entity. Any actions taken by anyone on behalf of the bank/PO/PSO are considered inherently void;

3. the execution of judicial acts on the collection of debts from the bank/PO/PSO is suspended, except for property held in trust by the bank/PO/PSO;

4. the accrual of interest, penalties, and other financial sanctions on all debt obligations of the bank/PO/PSO is discontinued, including the payment of mandatory payments to the budget;

5. the distribution of profit, payment of dividends, fulfillment of any financial obligations to shareholders is discontinued, as well as the payment of any remuneration (bonuses, premiums, and other incentive payments, except for fixed salary) to officials and employees of the bank/PO/PSO;

6. all banking operations and payments, transactions, and other activities are suspended, unless otherwise established by the National Bank;

7. judicial proceedings in civil and economic cases, in which the bank/PO/PSO is a party, are suspended;

8. the execution of any compulsory acts of authorized state bodies adopted with respect to the bank/PO/PSO is suspended.

(As amended by the Resolution of the Board of the National Bank of the Kyrgyz Republic of March 27, 2020 No. 2020-P-14/17-1)

28. The Temporary Administrator, specialists attracted by them and/or employees of the National Bank appointed by the National Bank to the composition of the Temporary Administration do not bear civil liability to any person for losses during the lawful performance of their official duties or lawful orders. Claims and lawsuits related to their unlawful activities may be brought exclusively to the National Bank. The National Bank has the right to bring claims on a recourse basis.

29. The procedure for conducting banking operations and payments, as well as other activities, is determined by the resolution of the Board/Supervisory Committee/Payment System Committee of the National Bank based on the proposals of the supervisory body and/or the Temporary Administrator.

(As amended by the Resolution of the Board of the National Bank of the Kyrgyz Republic of March 27, 2020 No. 2020-P-14/17-1)

30. With the consent of the National Bank, the rules of finality of settlements in payment systems and securities settlement systems may be applied. The rules of finality of settlements in payment systems and securities settlement systems are regulated by the Law of the Kyrgyz Republic "On Banks and Banking Activity" and the Regulation "On the Procedure for Conducting Certain Banking Operations by Banks of the Kyrgyz Republic in the Event of Introducing a Temporary Administration Regime or Commencing Liquidation Procedures", approved by the resolution of the Board of the National Bank.

(As amended by the Resolutions of the Board of the National Bank of the Kyrgyz Republic of March 27, 2020 No. 2020-P-14/17-1, December 28, 2022 No. 2022-P-12/83-6)

Chapter 6. Organization and Procedure of Work of the Temporary Administration

31. From the moment of introduction of the Temporary Administration, officials of the bank/PO/PSO are obliged to ensure the Temporary Administration with full