Rules for the Creation and/or Acquisition of Subsidiary or Dependent Companies by Commercial Banks of the Kyrgyz Republic

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Creation Date: 2026-01-28

Appendix to the Resolution of the Board of the National Bank of the Kyrgyz Republic of June 10, 2009 No. 26/3

RULES

for the creation and/or acquisition of subsidiary or dependent companies by commercial banks of the Kyrgyz Republic

(In the edition of the Resolutions of the Board of the National Bank of the Kyrgyz Republic of February 17, 2010 No. 2/3, November 16, 2012 No. 43/1, June 15, 2017 No. 2017-P-12/25-5, March 24, 2020 No. 2020-P-12/15-5, September 15, 2021 No. 2021-P-12/51-1, December 28, 2022 No. 2022-P-12/83-8, December 8, 2023 No. 2023-P-12/76-1, January 17, 2024 No. 2024-P-12/1-3, June 27, 2025 No. 2025-P-12/31-2-(NPA), December 19, 2025 No. 2025-P-12/68-2-(NPA))

1. General Provisions

1.1. These Rules for the creation and/or acquisition of subsidiary or dependent companies by commercial banks of the Kyrgyz Republic apply to all commercial banks, including banks conducting operations in accordance with Islamic principles of banking and financing (hereinafter referred to as "banks").

(In the edition of the Resolution of the Board of the National Bank of the Kyrgyz Republic of January 17, 2024 No. 2024-P-12/1-3)

1.2. These Rules establish the procedure for the creation and/or acquisition by a bank of a subsidiary or dependent company that is not a bank(1).

1.3. The creation or acquisition by a bank of a subsidiary or dependent company is carried out based on the written permission of the National Bank of the Kyrgyz Republic (hereinafter - the National Bank).

The validity period of the National Bank's permission issued under these Rules is no more than 6 months from the date of issuance.

(In the edition of the Resolutions of the Board of the National Bank of the Kyrgyz Republic of June 15, 2017 No. 2017-P-12/25-5, June 27, 2025 No. 2025-P-12/31-2-(NPA))

1.4. Banks are not entitled to create and/or acquire subsidiary or dependent companies if:

1. the registration and/or operation of such companies is planned in offshore zones, the list of which is determined by the authorized state body of the Kyrgyz Republic in the field of combating the financing of criminal activities and the legalization (money laundering) of criminal proceeds, as well as in states and territories subject to international sanctions adopted by the UN Security Council, mandatory for the Kyrgyz Republic;

2. such companies are registered and/or carry out their activities in offshore zones, as well as in states and territories subject to international sanctions adopted by the UN Security Council, mandatory for the Kyrgyz Republic;

3. such companies have as participants/co-founders legal entities registered or located in offshore zones, as well as in states and territories subject to international sanctions adopted by the UN Security Council, mandatory for the Kyrgyz Republic;

4. participants/co-founders of such companies are participants/co-founders of legal entities registered in offshore zones, as well as in states and territories subject to international sanctions adopted by the UN Security Council, mandatory for the Kyrgyz Republic;

5. the participants of the company are persons subject to restrictions under the Law of the Kyrgyz Republic "On Banks and Banking Activity".

(In the edition of the Resolutions of the Board of the National Bank of the Kyrgyz Republic of June 15, 2017 No. 2017-P-12/25-5, September 15, 2021 No. 2021-P-12/51-1, December 28, 2022 No. 2022-P-12/83-8, December 19, 2025 No. 2025-P-12/68-2-(NPA))

1.5. The amount of any investments, including any financial investments and loans to each non-bank organization, including in the creation and/or acquisition of a subsidiary or dependent company, must be less than twenty percent of the bank's own (regulatory) capital. At the same time, the total amount of such investments cannot exceed sixty percent of the bank's own (regulatory) capital. For the purposes of these Rules, the bank's own (regulatory) capital refers to Tier 1 capital, which is calculated in accordance with the Instruction on determining standards for capital adequacy of commercial banks of the Kyrgyz Republic, approved by the Resolution of the Board of the National Bank of October 12, 2022 No. 2022-P-12/63-1-(NPA).

(In the edition of the Resolution of the Board of the National Bank of the Kyrgyz Republic of June 27, 2025 No. 2025-P-12/31-2-(NPA))

1.5-1. A bank must obtain written permission from the National Bank in the following cases:

• for each subsequent investment in a subsidiary or dependent company that increases the bank's investment size by 5% of the bank's own capital;
• in case of an increase in the share in the capital of a dependent company, as a result of which it is defined as a subsidiary company of the bank.

(In the edition of the Resolution of the Board of the National Bank of the Kyrgyz Republic of June 27, 2025 No. 2025-P-12/31-2-(NPA))

1.6. (Lost force in accordance with the Resolution of the Board of the National Bank of the Kyrgyz Republic of June 15, 2017 No. 2017-P-12/25-5)

2. Criteria imposed on subsidiary or dependent companies of the bank

2.1. Subsidiary or dependent companies of the bank that are not banks may carry out only the following types of activities:

1. microfinance activity in accordance with the Law of the Kyrgyz Republic "On Microfinance Organizations in the Kyrgyz Republic";

2. investment fund activity in accordance with the Law of the Kyrgyz Republic "On Investment Funds";

3. insurance activity in accordance with the Law of the Kyrgyz Republic "On the Organization of Insurance in the Kyrgyz Republic";

4. audit activity in accordance with the Law of the Kyrgyz Republic "On Audit Activity";

5. activity on the organization and maintenance of accounting in accordance with the Law of the Kyrgyz Republic "On Accounting";

6. leasing activity;

7. pawnshop activity;

8. payment services activity:

• acceptance and processing of payments and settlements on behalf of third parties without opening an account;
• acceptance, processing, and issuance of financial information (processing) on payments and settlements of third parties to participants of payment systems;
• acceptance, processing, and issuance of financial information (interbank processing) on payments and settlements of third parties to participants of both interbank and non-bank payment systems;
• issuance, distribution, acceptance for payment, and confirmation of prepaid cards in the equivalent of electronic money;

9. purchase and sale of debt obligations (factoring);

10. acquisition of the right to claim from third parties the fulfillment of monetary obligations;

11. provision of brokerage services, including the purchase and sale of securities on behalf of the client, acting on the client's instructions;

12. provision of fiduciary management (trust) of property under a contract with an individual or legal entity;

13. issuance of securities in its own name in accordance with regulatory legal acts, except for the issuance of debt securities;

14. purchase and sale of securities for the company in its own name in accordance with regulatory legal acts;

15. provision of consulting and information services related to the company's activities;

16. provision of services for the development of financial technologies for the implementation of banking services;

17. activity in the field of electrical communication and data transmission (telecommunications operator activity) in accordance with the legislation of the Kyrgyz Republic.

Subsidiary and dependent companies of the bank are entitled to carry out other transactions necessary to ensure their activities in accordance with the regulatory legal acts of the Kyrgyz Republic.

Subsidiary and dependent companies providing services for the development of financial technologies are not entitled to carry out other activities.

(In the edition of the Resolutions of the Board of the National Bank of the Kyrgyz Republic of December 8, 2023 No. 2023-P-12/76-1, June 27, 2025 No. 2025-P-12/31-2-(NPA))

2.1-1. A bank conducting operations in accordance with Islamic principles of banking and financing is entitled to create an Islamic special financial company for the issuance of Islamic securities.

(In the edition of the Resolution of the Board of the National Bank of the Kyrgyz Republic of March 24, 2020 No. 2020-P-12/15-5)

2.1-2. Subsidiary or dependent companies of the bank may carry out only the types of activities specified in paragraph 2.1 of these Rules. This requirement does not apply to companies falling under sub-item 17 of paragraph 2.1 if, at the time of issuance of the National Bank's permission and at the time of the transaction (as a result of which the bank acquires a subsidiary or dependent company), the subsidiary or dependent company was already carrying out other types of activities not specified in paragraph 2.1 of these Rules. At the same time, in the future, the subsidiary or dependent company of the bank is not entitled to carry out other types of activities.

(In the edition of the Resolution of the Board of the National Bank of the Kyrgyz Republic of June 27, 2025 No. 2025-P-12/31-2-(NPA))

2.2. A subsidiary company of a bank's subsidiary may carry out only the types of activities specified in paragraph 2.1 of these Rules. This requirement does not apply to subsidiary companies of subsidiary companies falling under sub-item 17 of paragraph 2.1 if, at the time of the transaction (as a result of which a subsidiary company of the bank's subsidiary arises), the subsidiary company of the bank's subsidiary was already carrying out other types of activities not specified in paragraph 2.1 of these Rules. At the same time, in the future, the subsidiary company of the bank's subsidiary is not entitled to carry out other types of activities.

(In the edition of the Resolution of the Board of the National Bank of the Kyrgyz Republic of June 27, 2025 No. 2025-P-12/31-2-(NPA))

2.3. Types of activities subject to licensing in accordance with the regulatory legal acts of the republic are carried out by subsidiary or dependent companies of the bank, as well as by subsidiary companies of the bank's subsidiary, based on the license of the corresponding authorized state body.

2.4. Subsidiary and dependent companies of the bank are created in any organizational and legal form provided for by the legislation of the Kyrgyz Republic.

(In the edition of the Resolution of the Board of the National Bank of the Kyrgyz Republic of June 15, 2017 No. 2017-P-12/25-5)

2.5. Subsidiary and dependent companies of the bank, as well as subsidiary companies of the bank's subsidiary, acquired or created outside the territory of the Kyrgyz Republic, carry out the activities specified in paragraph 2.1 of these Rules, not contradicting the regulatory legal acts of the foreign state at the location of the subsidiary or dependent company, unless otherwise provided by an international treaty in force, a participant of which is the Kyrgyz Republic, in the established order.

2.6. Subsidiary or dependent companies of the bank:

1. acquired within the territory of the Kyrgyz Republic, must have a stable financial state (profitable), confirmed by financial statements for the last two years, certified by an independent audit organization (external auditor) for companies subject to audit, or by financial statements certified by the seal of the tax service, in case the company is not subject to audit;

2. acquired outside the territory of the Kyrgyz Republic, must have a stable financial state (profitable), confirmed by financial statements for the last two years, certified by an independent audit organization (external auditor);

3. created within and outside the territory of the Kyrgyz Republic, must meet the criteria of a stable financial state specified in sub-items 1) and 2) of this paragraph, respectively, by the results of activities in the third year of operation;

4. the head and chief accountant of the acquired or created company must have higher education confirmed by corresponding diplomas; in addition, the chief accountant must undergo special training on accounting issues in financial and credit institutions (international accounting standards, international financial reporting standards), confirmed by corresponding documents;

5. the head and chief accountant of the acquired and created company cannot be persons regarding whom:

• there is a criminal record that has not been expunged and/or cleared in the manner established by regulatory legal acts;
• a court has issued a guilty verdict prohibiting them from working in the financial and credit sphere, or a guilty verdict for committing crimes in the sphere of economy, finance, and banking activity, as well as for official crimes;
• there is an official decision of the National Bank (Resolution of the National Bank Supervision Committee, directives, and other supervisory measures) recognizing their involvement in actions classified as unhealthy and unsafe banking practice, and repeatedly violating regulatory legal acts;
• there is confirmed written information indicating their improper business reputation.

3. Creation and/or acquisition by a bank of a subsidiary or dependent company

3.1. A bank is entitled to create and/or acquire a subsidiary or dependent company under the following conditions:

• the bank's activity has been profitable for the previous 3 years and at the time of making the decision to create or acquire a subsidiary or dependent company;
• the bank has complied with all economic indicators and requirements of the National Bank for the last 12 months;
• no restrictions on the conduct of certain types of banking operations have been imposed on the bank due to the identification by the National Bank of violations in the bank's activities;
• regarding the bank's activities and its officials working in the bank at the time of applying to the National Bank for written consent, there are no decisions recognizing them as falling under unhealthy and unsafe banking practice;
• the creation or acquisition of a subsidiary or dependent company will not lead to a violation of economic indicators and requirements of the National Bank, nor to the bank's involvement in unhealthy and unsafe banking practice;
• the creation or acquisition of subsidiary or dependent companies does not pose a threat to the interests of depositors and other creditors of the bank and is motivated by the interests of the bank, not the personal interests of affiliated and related persons;
• the creation or acquisition of subsidiary or dependent companies will not lead to the bank's dominant position in the banking services market;
• officials of the bank and its acquired subsidiary or dependent company, their shareholders (founders), have impeccable business reputation;
• no regime of direct banking supervision has been introduced into the bank.

(In the edition of the Resolution of the Board of the National Bank of the Kyrgyz Republic of June 15, 2017 No. 2017-P-12/25-5)

3.1-1. In the creation and/or acquisition of a subsidiary or dependent company carrying out the activity specified in sub-item 17 of paragraph 2.1 of these Rules, in addition to the conditions provided for in paragraph 3.1, the bank must ensure:

• the presence in the bank of an effective risk management and internal control system adequate to the scale and specifics of the subsidiary/dependent company's activity;
• the bank has the necessary qualifications and resources for effective management of the subsidiary/dependent company.

(In the edition of the Resolution of the Board of the National Bank of the Kyrgyz Republic of June 27, 2025 No. 2025-P-12/31-2-(NPA))

3.2. The decision to create and/or acquire a subsidiary or dependent company is made by the Bank's Board of Directors, taking into account the conclusion of the bank's risk manager on the risks associated with the creation and/or acquisition of a subsidiary or dependent company.

3.3. In case of a decision to create and/or acquire a subsidiary or dependent company outside the territory of the Kyrgyz Republic, the bank provides measures aimed at minimizing risks associated with the creation and/or acquisition of subsidiary or dependent companies, including an analysis of the regulatory legal acts of the corresponding country, creation of reserves to cover potential losses and damages associated with country risk, etc.

3.4. The bank, after making a decision to create or acquire a subsidiary or dependent company, submits to the National Bank the following documents:

1. an application for the creation and/or acquisition of a subsidiary and/or dependent company, containing general information about the company (Appendix 1);

2. a decision of the Board of Directors on the creation and/or acquisition of a subsidiary or dependent company. In banks conducting operations in accordance with Islamic principles of banking and financing, for the creation of an Islamic special financial company - approval by the Bank's Shariah Council;

3. the bank's conclusion on the bank's risks associated with the creation and/or acquisition of subsidiary and/or dependent companies, including an assessment of the risks of the created and/or acquired company that may affect the bank's financial stability, including market risks, concentration risks, reputational risks;

4. draft charter and founding agreement of the created company. In banks conducting operations in accordance with Islamic principles of banking and financing, the above documents must be approved by the Bank's Shariah Council;

5. copies of the charter, founding agreement, and certificate of state registration of the acquired company, notarized in the established order;

6. the bank's development business plan taking into account the business plan of the created or acquired company for 1 year, containing an economic justification for the creation or acquisition of a subsidiary or dependent company, calculations of the expected impact of the creation or acquisition of a subsidiary or dependent company on the bank's capital and profitability, as well as on the bank's compliance with economic indicators established by the National Bank;

7. annual reports of the acquired company and its significant participants for the last two years, containing a conclusion (report) of an independent auditor on their reliability and corresponding explanations and information disclosure;

8. a copy of the license (or other permit document) of the acquired company for the activity issued by the corresponding authorized state body, or a letter from the bank indicating information about the number and date of the license (or other permit document), about the authorized state body that issued the license (or other permit document) of the acquired company, if the authorized state body provides for a ban on copying the license (or other permit document) and a condition on the invalidity of copies;

9. the bank's balance sheet and the balance sheet of the acquired subsidiary or dependent company, a forecast of the consolidated balance sheet of the bank with the balance sheet of the bank's subsidiary or dependent company as of the last reporting date;

10. information on enforcement measures and sanctions taken within the last two years against the subsidiary or dependent company acquired by the bank, licensed and regulated by the authorized state body, or information on the absence of such enforcement measures and sanctions;

11. in case of creation or acquisition of a company outside the territory of the Kyrgyz Republic:

• written confirmation from the supervisory authority of the country where it is planned to create or acquire a subsidiary or dependent company that the company's activities are subject to supervision in accordance with the requirements of the regulatory legal acts of the country where it is planned to create or acquire a subsidiary or dependent company;
• or written confirmation from the supervisory authority that the company's activities are not subject to supervision in accordance with the requirements of the regulatory legal acts of the country where it is planned to create or acquire a subsidiary or dependent company;
• an analysis of the legislation of the country of location of the subsidiary organization confirming the possibility of conducting consolidated supervision by the National Bank.

(In the edition of the Resolutions of the Board of the National Bank of the Kyrgyz Republic of June 15, 2017 No. 2017-P-12/25-5, March 24, 2020 No. 2020-P-12/15-5, June 27, 2025 No. 2025-P-12/31-2-(NPA))

3.4-1. Additionally, for the type of activity specified in sub-item 17 of paragraph 2.1 of these Rules, the bank submits to the National Bank the following documents:

• financial forecasts of the subsidiary/dependent company for a period of not less than three years, confirming the financial stability of the subsidiary/dependent company and meeting the requirements of the regulatory legal acts of the National Bank;
• confirmation of the bank's possession of the necessary qualifications and resources for effective management of the subsidiary/dependent company;
• results of the check (due diligence) of the subsidiary/dependent company, including financial, legal, and reputational analysis.

(In the edition of the Resolution of the Board of the National Bank of the Kyrgyz Republic of June 27, 2025 No. 2025-P-12/31-2-(NPA))

3.5. The documents of subsidiary or dependent companies of the bank specified in sub-items 10), 11) of paragraph 3.4 of these Rules, in case of their acquisition and/or creation outside the territory of the Kyrgyz Republic, are submitted legalized in the established order. The translation of documents into the state or official language must contain the translator's signature, notarized.

3.6. The National Bank has the right to request additional information from the bank necessary for making a decision on granting permission.

3.7. In the creation and/or acquisition by a bank of a subsidiary or dependent company conducting operations in accordance with Islamic principles of banking and financing, a Shariah Council must be established in the company. The list of members of the Shariah Council must be submitted to the National Bank.

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

4. Procedure for considering documents submitted by the bank to obtain permission for the creation and/or acquisition of subsidiary or dependent companies

4.1. Documents submitted to the National Bank are considered for completeness and reliability of the presented information, compliance of officials of the subsidiary or dependent company with established requirements(4) and compliance of the subsidiary or dependent company with the National Bank's criteria, the justification of the business plan, and the compliance of the subsidiary or dependent company's activities with regulatory legal acts.

4.2. Documents submitted to the National Bank and having more than 1 page are described page by page, numbered, bound, and signed. Notarized copies of documents are submitted to the National Bank. If necessary, at the request of the National Bank, individual documents must be additionally submitted in electronic form.

4.3. The National Bank considers the documents submitted by the bank, makes a decision on granting permission for the creation and/or acquisition of a subsidiary or dependent company or on refusal, and sends a letter to the Chairman of the Bank's Board of Directors with information about the decision made within two months from the date of receipt of documents for consideration.

4.4. In case of non-compliance of documents with the requirements of these Rules and/or submission of documents in an incomplete volume, the counting of the terms for considering documents starts from the day of receipt by the National Bank of documents meeting the established requirements.

4.5. Within five working days after the state registration of the created subsidiary or dependent company and obtaining a license (or other permit document) in accordance with regulatory legal acts for the right to carry out activities, the bank sends a notification to the National Bank with copies of the charter, founding agreement, certificate of state registration, and license (or other permit document) of the subsidiary or dependent company attached. If the authorized state body provides for a ban on copying the license (or other permit document), as well as a condition on the invalidity of copies, the bank submits a letter to the National Bank in accordance with sub-item 8) of paragraph 3.4 of these Rules.

4.6. Within five working days after the state re-registration of the acquired subsidiary or dependent company and, if necessary, reissuance of the license (or other permit document) in the manner established by regulatory legal acts...