Resolution of the Board

of the National Bank

of the Kyrgyz Republic

of 27 December 2024

No. 2024-П-12/71-2-(НПА)

On Amendments

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

«On Approval of the Regulation «On the Special Regulatory Regime»

of 12 August 2020 No. 2020-П-12/45-3-(НПА)

In accordance with Articles 5, 9 and 64 of the Constitutional Law of the Kyrgyz Republic «On the National Bank of the Kyrgyz Republic», the Board of the National Bank of the Kyrgyz Republic resolves:

• 1. To amend the Resolution of the Board of the National Bank of the Kyrgyz Republic «On Approval of the Regulation «On the Special Regulatory Regime» of 12 August 2020 No. 2020-П-12/45-3-(НПА) (attached).

• 2. This Resolution shall enter into force upon the expiry of 15 (fifteen) days from the day of official publication.

• 3. To the Legal Department:

  • from the day of receipt of the relevant documents, within 3 (three) working days, to publish this Resolution on the official website of the National Bank of the Kyrgyz Republic;

  • after official publication, to send this Resolution to the Ministry of Justice of the Kyrgyz Republic for inclusion in the State Register of Normative Legal Acts of the Kyrgyz Republic.

• 4. To the Supervision Methodology Department, within 3 (three) working days, to bring this Resolution to the attention of commercial banks, the Legal Entity Union «Union of Banks of Kyrgyzstan», the Open Joint-Stock Company «Financial Company of Credit Unions», the Legal Entity Union «Association of Microfinance Organizations», the Legal Entity Union «National Association of Credit Unions and Cooperatives of Kyrgyzstan», microfinance organizations, and credit unions licensed to attract deposits.

• 5. To the «Secretariat of the Board» Division, within 3 (three) working days, to bring this Resolution to the attention of the Banking Supervision Department, the Non-Bank Organizations Supervision Department, the Payment Systems Supervision Department, the Payment Systems Methodology and Licensing Department, the Licensing Department, the Legal Department, regional departments and the Representative Office of the National Bank of the Kyrgyz Republic in Batken Oblast.

• 6. To entrust control over the execution of this Resolution to the member of the Board of the National Bank of the Kyrgyz Republic supervising the Supervision Methodology Department.

Chairman M. Turgunbaev

Annex
to the Resolution of the Board of the National Bank of the Kyrgyz Republic of 27 December 2024 No. 2024-П-12/71-2-(НПА)

Amendments

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

«On Approval of the Regulation «On the Special Regulatory Regime»

of 12 August 2020 No. 2020-П-12/45-3-(НПА)

To introduce the following amendments to the Resolution of the Board of the National Bank of the Kyrgyz Republic «On Approval of the Regulation «On the Special Regulatory Regime» of 12 August 2020 No. 2020-П-12/45-3-(НПА):

in the Regulation «On the Special Regulatory Regime» approved by the above-mentioned Resolution:

• paragraph 1 shall be set out in the following wording:

«1. This Regulation «On the Special Regulatory Regime» (hereinafter – the Regulation) determines the procedure for creating a special regulatory regime for the introduction of innovative banking operations and services/technologies in the sphere of banking and payment services (hereinafter – banking operations and/or services), the procedure for participation and requirements for participants of the special regulatory regime in conditions of the need to adapt new services and technologies that were previously not present in the banking and payment systems of the Kyrgyz Republic. The requirements of normative legal acts of the National Bank of the Kyrgyz Republic (hereinafter – the National Bank) apply to legal relations concerning the activity of special regulatory regimes taking into account the specifics provided for by this Regulation and decisions of the Supervision Committee/Payment System Committee of the National Bank (hereinafter – the Committee). Operations and services within the framework of the special regulatory regime must be ready for testing in real market conditions on a limited scale and at the stage of a minimum commercially viable product. The innovative services/technologies being introduced in the sphere of banking operations and/or services related to banking operations in accordance with the legislation of the Kyrgyz Republic, within the framework of the special regulatory regime, must comply with the following criteria:

• the proposed innovative operations and/or services for use in banking operations and/or provision of banking services are new in the sphere of banking operations and/or services;

• the performance of banking operations and/or services was restricted by normative legal acts of the Kyrgyz Republic;

• there are no restrictions on combining one's activity with other activity, including restrictions on the type and list of operations provided, in accordance with the legislation of the Kyrgyz Republic;

• the operations and services are not regulated by normative legal acts of the Kyrgyz Republic and there is no direct prohibition on conducting the operations.

Within the framework of the special regulatory regime, participants test innovative operations and/or services used in the sphere of banking operations and/or services that supplement rather than replace the main business activity.

Compliance of the operation and (or) service proposed for testing with the above criteria is mandatory for the creation of a special regulatory regime.

The special regulatory regime is not intended and cannot be used as a means of circumventing the requirements of the legislation of the Kyrgyz Republic and the requirements imposed on participants providing similar types of banking operations and/or services.»;

• in paragraph 2:

  • the sixth paragraph shall be set out in the following wording:

«- increasing the accessibility and customer focus of banking services for consumers and reducing the costs of their introduction.»;

• the seventh paragraph shall be deemed to have lost force;

• the first paragraph of paragraph 3 shall be set out in the following wording:

«3. The National Bank, for the introduction of innovative operations and/or services in the sphere of banking operations and/or services within the framework of the special regulatory regime, exercises control over the process of implementation of this regime and adopts a decision in accordance with the norms of this Regulation.»;

• paragraph two of point 4 shall be recognized as having lost force;

• The Regulation shall be supplemented with point 4-1 with the following content:

«4-1. Risk management methods must correspond to the scale of activity of the participant and the risks associated with the introduction of an innovative banking service or technology within the framework of the special regulatory regime.»;

• point 5 shall be set out in the following wording:

«5. Responsibility for compliance with the conditions of the special regulatory regime shall be borne by the Applicant together with the Co-applicant (if any).

At the same time, the Applicant/Co-applicant (if any) for entry into the special regulatory regime shall be a legal entity registered in the territory of the Kyrgyz Republic, which must meet the following requirements:

• 1) absence of violations of mandatory economic norms, prohibitions and restrictions, as well as unfulfilled enforcement measures in the sphere of countering the financing of terrorist activities and the legalization (laundering) of criminal proceeds, related to the proposed testing of innovative operations and/or services in the sphere of banking operations and/or services, as of the date of submission of the application;

• 2) The Applicant must not be in the process of liquidation, bankruptcy or in a special regime;

• 3) absence of a prohibition in respect of the Applicant (Co-applicant) or its head or founder (shareholder, participant) from engaging in this type of activity by a court decision or in accordance with the legislation of the Kyrgyz Republic;

• 4) absence among the founders of the Applicant (Co-applicant) of affiliated persons registered in offshore zones, or of individuals residing in the territory of offshore zones or being shareholders (participants) of legal entities registered in offshore zones, the list of which is established by the National Bank;

• 5) The Applicant (Co-applicant) must be solvent and have a satisfactory financial condition, or the Applicant (Co-applicant) must possess sufficient own financial resources for conducting the special regulatory regime for the last reporting financial year at the time of submission of the application;

• 6) presence of professional, technical competence and reputation, equipment and other material capabilities necessary for participation in the special regulatory regime.»;

• paragraph eleven of point 6 shall be set out in the following wording:

«In the event of adoption of a decision on extension of the special regulatory regime, an increase in the established restrictions shall not be allowed.»;

• point 7:

  • shall be supplemented with paragraph three with the following content:

«At the same time, the period of simultaneous participation of participants of the special regulatory regime may not exceed the period of the existing special regulatory regime testing an analogous operation and/or service.»;

• shall be supplemented with paragraph four with the following content:

«Acceptance of applications for simultaneous participation in the special regulatory regime shall be terminated upon expiry of 6 (six) months from the date of commencement of the existing special regulatory regime.»;

• in paragraph two of point 8, after the words «Applicant and Co-applicant (if any)», the words «or analogues in electronic form, drawn up» shall be excluded;

• in paragraph one of point 14-1, after the word «is carried out», the letter «в» shall be replaced by the letter «с»;

• point 15 shall be supplemented with a paragraph with the following content:

«- on recognition of the testing as successful or unsuccessful within the framework of the special regulatory regime.»;

• point 17 shall be supplemented with a paragraph with the following content:

«The Applicant (Co-applicant) may be invited to a meeting of the relevant Committee of the National Bank with a presentation of the proposed banking operation and/or service for testing and provide explanations if necessary.»;

• in point 20:

  • in paragraph three, after the words «including for», the word «participant» shall be reflected with a capital letter;

  • shall be supplemented with paragraph six with the following content:

«- development of mechanisms for dispute resolution and bringing it to the attention of consumers;»;

• The Regulation shall be supplemented with point 20-1 with the following content:

«When conducting the special regulatory regime, Participants must comply with the requirements for implementation of the «know your client» policy and requirements in the sphere of countering the financing of terrorism and the legalization (laundering) of criminal proceeds, observance of confidentiality and protection of personal data of clients, protection of the rights and interests of consumers and ensuring the security of operations.»;

• point 28 shall be set out in the following wording:

«28. In the case provided for by point 27 of this Regulation, the National Bank shall send to the Participant of the special regulatory regime a corresponding notification on suspension of the license until elimination of the violations within the time periods established by the National Bank.»;

• in point 29:

  • paragraph two shall be set out in the following wording:

«- identification of facts of unreliability of data and/or of absence of the possibility of providing the data specified in the application within the framework of the special regulatory regime;»;

• paragraph three shall be set out in the following wording:

«- identification of systematic (two or more times during testing) non-compliance by the Participant of the special regulatory regime with the conditions for the provision of services and/or presentation of technologies provided for by the conditions of the special regulatory regime, as well as identification of negative consequences for consumers and/or financial stability of the Participant;»;

• shall be supplemented with paragraph four with the following content:

«- in the event that testing of the banking operation and/or service has not begun, including due to technical conditions, upon expiry of 6 (six) months from the day of receipt of the license.»;

• shall be supplemented with a paragraph with the following content:

«- recognition of the testing as unsuccessful».

• point 31:

  • shall be supplemented with paragraph two with the following content:

«- information on the period (start/end) of provision of services;»;

• shall be supplemented with a paragraph with the following content:

«- proposals for further regulatory regulation of the banking operation, including for minimizing risks.»;

• In Appendix 3 to the Regulation, in the column “Description of the banking operation and service,” the fifth row shall be stated as follows:

“Detailed description of the practice of providing identical banking operations and services in the local market, as well as outside the local market and/or indication of the absence of such practice, detailed analysis of competitors, products/services. The following metrics must be calculated:

• product profitability (ROI);

• margin;

• return on assets (ROA);

• sales/services volume;

• market share;

• assessment of the level of customer satisfaction (CSAT);

• projected total profit received from the client over the entire period of their interaction with the product;

• customer base growth rates;

• speed of implementation (Time-to-Market);

• operational efficiency;

• reliability and availability (System Uptime);».