Region

Jurisdiction

Regulator

2008-08-27 | 131860

Regulation on the Calculation of the Effective Annual Percentage Rate in the Disclosure of Information on the Size of Remuneration for Banking Services

The National Bank of the Kyrgyz Republic mandates that commercial banks and other regulated financial institutions calculate and disclose the Effective Annual Percentage Rate (APR) for all credit and deposit services to ensure transparent and comparable cost information for consumers. The regulation defines specific calculation methodologies, including the inclusion of all associated fees and the use of iterative algebraic methods, while specifying strict formatting and disclosure requirements for contracts and marketing materials. It also establishes exemptions for Islamic banking products and provides detailed examples to illustrate the application of these calculation standards.

Kyrgyzstan

National Bank of the Kyrgyz Republic

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Print version

Date of creation: 2026-05-13

Approved

by the Resolution of the Board of the National Bank of the Kyrgyz Republic

of August 27, 2008 No. 33/4

REGULATION

on the calculation of the effective interest rate in the dissemination of information on the size of remuneration for banking services

(As amended by the Resolutions of the Board of the National Bank of the Kyrgyz Republic of November 16, 2012 No. 43/1, December 27, 2012 No. 51/3, June 15, 2017 No. 2017-P-12/25-12, January 17, 2024 No. 2024-P-12/1-3, April 27, 2026 No. 2026-P-12/26-3-(NPA))

General Provisions

1.1. (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-12/25-12)

1.2. The purpose of this Regulation is to determine the procedure for commercial banks and other financial and credit organizations licensed and/or regulated by the National Bank of the Kyrgyz Republic (hereinafter - banks) to calculate interest rates on loans and deposits in a reliable, annual, effective, and comparable manner when disseminating information on the size of remuneration for banking services.

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

Terms and Definitions

For the purposes of this Regulation, the following concepts are used:

Annual Effective Interest Rate - an interest rate calculated in a reliable, annual, effective, and comparable manner, in which the calculation takes into account client payments related to obtaining a loan or remuneration to the client for placing funds in a deposit account. The Annual Effective Interest Rate is calculated in accordance with this Regulation.

Deposit linked to a loan - a deposit that serves as collateral for the provided loan or whose presence is mandatory under the terms of the loan agreement.

Clients - individuals, legal entities, or individual entrepreneurs who intend to use or are using bank services.

Services - the provision of services by banks in providing bank loans and/or accepting deposits.

Iteration Method - a method that uses multiple iterations (steps) to obtain a final result.

(As amended by the Resolution of the Board of the National Bank of the Kyrgyz Republic of December 27, 2012 No. 51/3)

Calculation of the Annual Effective Interest Rate

3.1. The Annual Effective Interest Rate is calculated by the bank for each type of service offered.

3.2. The Annual Effective Interest Rate for provided loans is calculated from the following equality:

APR (Annual percentage rate) - annual effective interest rate;

D - the amount of the first payment/first disbursement by the bank to the client (the first loan amount or its tranche);

k - the total amount of all client payments for obtaining bank loans, including all payments related to obtaining the loan, on the date of the first payment/first disbursement by the bank to the client;

L - the amount of deposits linked to loans deposited on the date of receipt of the first payment/first disbursement by the bank to the client;

n - the ordinal number of the last payment/disbursement to the client;

j - the ordinal number of the payment/disbursement by the client after the date of receipt of the first payment/first disbursement by the client;

Sj - the amount of the j-th payment/disbursement to the client, including subsequent loans, interest payments on deposits linked to loans, return of deposits;

tj - the time period from the day of providing the first payment/first disbursement to the client to the moment of the j-th payment/disbursement to the client (in days);

m - the ordinal number of the last payment by the client to the bank;

i - the ordinal number of the client's payment;

Pi - the amount of the i-th payment by the client after the date of receipt of the first payment/first disbursement by the client, including interest on loans, deposit contributions, and payments in accordance with paragraph 3.3 of this Regulation;

ti - the time period from the day of providing the first payment/first disbursement to the client to the moment of the i-th payment by the client (in days).

3.3. The total amount of client payments when obtaining loans and all associated bank services, excluding amounts of remuneration paid to the client on a deposit linked to a loan, includes:

payments for the repayment of the principal debt and payment of remuneration for the loan;
payments to the bank related to obtaining, processing, and servicing the loan (fees for document review, commissions for cash withdrawals, cost of servicing bank accounts, etc.), excluding penalties for late payments and penalties for non-compliance with the terms of the loan agreement.

(As amended by the Resolution of the Board of the National Bank of the Kyrgyz Republic of December 27, 2012 No. 51/3)

3.3-1. For loans issued using payment credit cards within established credit limits, the following are not included in the calculation of the annual effective interest rate:

commission for transactions in a currency other than the account currency (currency of the provided loan);
commission for issuing and servicing the credit card, including for suspending (resuming) operations on the credit card;
commission for obtaining the loan amount in cash using ATMs.

(As amended by the Resolution of the Board of the National Bank of the Kyrgyz Republic of December 27, 2012 No. 51/3)

3.4. The Annual Effective Interest Rate for attracted deposits is calculated from the following equality:

APR - annual effective interest rate;

n - the ordinal number of the client's last payment/contribution;

Sj - the amount of the j-th payment/contribution by the client, including depositing into the deposit and payment for associated bank services;

j - the ordinal number of the client's payment/contribution;

tj - the time period from the day of attracting the deposit to the moment of the j-th payment/contribution by the client (in days);

m - the ordinal number of the last payment to the client;

i - the ordinal number of the payment to the client;

Pi - the amount of the i-th payment to the client, including interest on deposits, return of deposits;

ti - the time period from the day of attracting the deposit to the moment of the i-th payment (in days).

3.5. When calculating the effective interest rate, payments already made by the client and/or payments to the client for a loan/deposit are taken into account at the moment of their actual payment; future payments are taken according to the payment schedule according to the terms of providing the banking service, known at the time of concluding the contract.

3.6. Banks calculate the annual effective interest rate using the algebraic method, successive approximations, or the iteration method with the application of computer programs (Appendix 1 to this Regulation provides examples of calculating the effective interest rate for issued loans; Appendix 2 provides an example of calculating the effective interest rate for attracted deposits). It is recommended to use the financial function XIRR (in English version of Microsoft EXCEL) of Microsoft EXCEL program (function XIRR if the version of Microsoft EXCEL is in English).

3.7. For the calculation formula, sums paid by the client and the bank at different times do not necessarily have to be equal and paid at equal time intervals.

3.8. If the resulting number when calculating the annual effective interest rate has more than one decimal place, it shall be rounded to tenths as follows:

if the hundredth part is greater than or equal to 5, the tenth part is increased by 1, all following digits are excluded;
if the hundredth part is less than 5, the tenth part remains unchanged, all following digits are excluded.

Procedure for Disclosure of Information

4.1. Banks must indicate the size of the annual effective interest rate:

in contracts concluded with clients;
in response to oral and written requests from clients;
when disseminating information on the size of remuneration for services regardless of the type of carrier (advertising brochures, roadside billboards, stands, leaflets, etc.), including through mass media, websites, e-mail, by phone, during oral consultation of clients.

An Islamic bank or a bank with an "Islamic window," taking into account the specifics of operations on Islamic financing principles, may not initially disclose information about the annual effective interest rate, except for information about the annual effective interest rate for operations for which a repayment schedule or income accrual schedule is prepared. An Islamic bank or a bank with an "Islamic window" brings all information in accordance with paragraph 4.2 of this Regulation to the attention of the client.

(As amended by the Resolution of the Board of the National Bank of the Kyrgyz Republic of April 27, 2026 No. 2026-P-12/26-3-(NPA))

4.1-1. Along with information on the size of the effective interest rate, banks must provide the client with information on the total cost of the loan (financing) in absolute terms, showing separately the principal amount of the loan (financing), interest (markup), commission fees, and all other payments, including payments to third parties according to current tariffs, if the client's obligation for such payments arises from the terms of the loan agreement/financing agreement.

(As amended by the Resolution of the Board of the National Bank of the Kyrgyz Republic of December 27, 2012 No. 51/3)

4.1-2. When disseminating information on the size of remuneration for services, regardless of the type of carrier (advertising brochures, roadside billboards, stands, leaflets, etc.), including through mass media, banks must indicate that upon applying to the bank, the total cost of the loan/financing will be calculated taking into account the client's expenses related to obtaining the loan/financing.

(As amended by the Resolution of the Board of the National Bank of the Kyrgyz Republic of December 27, 2012 No. 51/3)

4.2. The service provision contract must contain a list of services for which the bank charges commissions (paragraph 3.3 of this Regulation), which affect the size of the effective interest rate, with the amounts of these commissions indicated or a reference to the procedure for their determination, as well as the procedure and terms for changing interest rates.

If the contract provides for a change in the interest rate, the method of bringing this information to the client's attention is determined by the agreement of the parties.

(As amended by the Resolution of the Board of the National Bank of the Kyrgyz Republic of December 27, 2012 No. 51/3)

4.3. For existing contracts concluded with clients before the entry into force of this Regulation, when a client applies to the bank to make changes to the contract, the bank must, when making changes, provide for the indication of the annual effective interest rate in the contract.

In service provision contracts concluded with clients, the effective interest rate and the total cost of the loan/financing are printed using computer devices in digital form, as well as in the same size and style of font formatting (italic, bold, color highlighting, size) in one paragraph with other remuneration rates.

The bank may indicate the size of the total cost of the loan/financing in an appendix to the loan agreement/financing agreement, if the loan agreement/financing agreement itself contains a corresponding reference to this appendix.

(As amended by the Resolution of the Board of the National Bank of the Kyrgyz Republic of December 27, 2012 No. 51/3)

4.4. When providing loans under credit lines and in the absence in the corresponding loan contract of values necessary for calculating the annual effective interest rate, the bank indicates it in each contract concluded within the framework of this agreement, based on the conditions available in the contract, as well as taking into account the following positions:

if there is no specific loan repayment schedule and it cannot be determined from the terms of the loan contract, the loan is considered issued for a period of one year from the date of concluding the loan contract;
if the loan contract stipulates several possible loan repayment dates in the absence of other indications, it is assumed that the loan is provided and repaid on the earliest of the specified terms;
if the amount of the provided loan is not specified, it is assumed that for the term of the loan contract, the maximum loan amount specified in the agreement is secured;
if the date of client payments is not defined, it is assumed that they are made at the beginning of the loan contract.

Appendix 1

Example 1.

Loan Amount

$20,000

Loan Issue Date

08.07.2008

Annual Rate

22%

Loan Term

3 years

Collateral in the form of a deposit

30% ($6,000)

Cash Withdrawal

0.2% of the amount ($40)

Monthly Payment (Annuity)

763.81

principal plus interest

Payment Date (month/day/year)

Monthly Payment (Annuity) principal plus interest

Additional Expenses/Payments

Total Payment Amount

7/8/2008

-20,000

6,040

-13,960

8/8/2008

763.81

9/8/2008

763.81

10/8/2008

763.81

11/8/2008

763.81

12/8/2008

763.81

1/8/2009

763.81

2/8/2009

763.81

3/8/2009

763.81

4/8/2009

763.81

5/8/2009

763.81

6/8/2009

763.81

7/8/2009

763.81

8/8/2009

763.81

9/8/2009

763.81

10/8/2009

763.81

11/8/2009

763.81

12/8/2009

763.81

1/8/2010

763.81

2/8/2010

763.81

3/8/2010

763.81

4/8/2010

763.81

5/8/2010

763.81

6/8/2010

763.81

7/8/2010

763.81

8/8/2010

763.81

9/8/2010

763.81

10/8/2010

763.81

11/8/2010

763.81

12/8/2010

763.81

1/8/2011

763.81

2/8/2011

763.81

3/8/2011

763.81

4/8/2011

763.81

5/8/2011

763.81

6/8/2011

763.81

7/8/2011

763.81

Effective Interest Rate (APR)(1)

64.6%

(1) For the calculation of the Effective Interest Rate, the Excel program is used - the financial function XIRR. All data from the "Total Payment Amount" column are taken as values, and all data from the "Payment Date" column are taken as dates.

Example 2.

Loan Amount

$20,000

Loan Issue Date

08.07.2008

Annual Rate

22%

Loan Term

3 years

Cash Withdrawal

0.5% of the amount $100

Monthly Payment (Annuity)

763.81

principal plus interest

Payment Date (month/day/year)

Monthly Payment (Annuity) principal plus interest

Additional Expenses/Payments

Total Payment Amount

7/8/2008

-20,000

100

-19,900

8/8/2008

763.81

9/8/2008

763.81

10/8/2008

763.81

11/8/2008

763.81

12/8/2008

763.81

1/8/2009

763.81

2/8/2009

763.81

3/8/2009

763.81

4/8/2009

763.81

5/8/2009

763.81

6/8/2009

763.81

7/8/2009

763.81

8/8/2009

763.81

9/8/2009

763.81

10/8/2009

763.81

11/8/2009

763.81

12/8/2009

763.81

1/8/2010

763.81

2/8/2010

763.81

3/8/2010

763.81

4/8/2010

763.81

5/8/2010

763.81

6/8/2010

763.81

7/8/2010

763.81

8/8/2010

763.81

9/8/2010

763.81

10/8/2010

763.81

11/8/2010

763.81

12/8/2010

763.81

1/8/2011

763.81

2/8/2011

763.81

3/8/2011

763.81

4/8/2011

763.81

5/8/2011

763.81

6/8/2011

763.81

7/8/2011

763.81

Effective Interest Rate (APR)

24.8%

Example 3.

Loan Amount

$20,000

Loan Issue Date

08.07.2008

Annual Rate

22%

Loan Term

3 years

Expenses for using the loan and others

0.03% monthly ($6)

commission payments

Monthly Payment (Annuity)

763.81

principal plus interest

Payment Date (month/day/year)

Monthly Payment (Annuity) principal plus interest

Additional Expenses/Payments

Total Payment Amount

7/8/2008

-20,000

8/8/2008

763.81

769.81

9/8/2008

763.81

769.81

10/8/2008

763.81

769.81

11/8/2008

763.81

769.81

12/8/2008

763.81

769.81

1/8/2009

763.81

769.81

2/8/2009

763.81

769.81

3/8/2009

763.81

769.81

4/8/2009

763.81

769.81

5/8/2009

763.81

769.81

6/8/2009

763.81

769.81

7/8/2009

763.81

769.81

8/8/2009

763.81

769.81

9/8/2009

763.81

769.81

10/8/2009

763.81

769.81

11/8/2009

763.81

769.81

12/8/2009

763.81

769.81

1/8/2010

763.81

769.81

2/8/2010

763.81

769.81

3/8/2010

763.81

769.81

4/8/2010

763.81

769.81

5/8/2010

763.81

769.81

6/8/2010

763.81

769.81

7/8/2010

763.81

769.81

8/8/2010

763.81

769.81

9/8/2010

763.81

769.81

10/8/2010

763.81

769.81

11/8/2010

763.81

769.81

12/8/2010

763.81

769.81

1/8/2011

763.81

769.81

2/8/2011

763.81

769.81

3/8/2011

763.81

769.81

4/8/2011

763.81

769.81

5/8/2011

763.81

769.81

6/8/2011

763.81

769.81

7/8/2011

763.81

769.81

Effective Interest Rate (APR)

25.0%

Appendix 2

Example 4.

Deposit Amount

100,000

Date of depositing the amount to the deposit

10/7/2008

Deposit Term

12 months

Interest

(interest is paid 9% monthly)

Client's expenses for document processing when opening the deposit

450 som

Payment Date

Principal and Interest

Additional Payments

Total Payment Amount

7/10/2008

100,450

450

100,450

8/10/2008

-750

9/10/2008

-750

10/10/2008

-750

11/10/2008

-750

12/10/2008

-750

1/10/2009

-750

2/10/2009

-750

3/10/2009

-750

4/10/2009

-750

5/10/2009

-750

6/10/2009

-750

7/10/2009

-100,750

Effective Interest Rate (APR)

8.9%

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