Instruction No. 178 on the Organization of Settlements between Credit Organizations in the Republic of Tajikistan

"REGISTERED" "APPROVED" By the Ministry of Justice of the Republic of Tajikistan by Resolution No. 583 dated August 18, 2010 By the Board of Directors of the National Bank of Tajikistan by Resolution No. 150 dated May 31, 2010 “REGISTERED” “APPROVED” Amendment and Addition By the Ministry of Justice of the Republic of Tajikistan by Resolution No. 583 “a” dated November 15, 2011 Amendment and Addition By the Board of Directors of the National Bank of Tajikistan by Resolution No. 202 dated October 14, 2011 “REGISTERED” “APPROVED” Amendment and Addition By the Ministry of Justice of the Republic of Tajikistan by Resolution No. 583 “b” dated February 2, 2015 Amendment and Addition By the Board of Directors of the National Bank of Tajikistan by Resolution No. 269 dated October 30, 2014 “REGISTERED” “APPROVED” Amendment and Addition By the Ministry of Justice of the Republic of Tajikistan by Resolution No. 583 “c” dated July 7, 2015 Amendment and Addition By the Board of Directors of the National Bank of Tajikistan by Resolution No. 100 dated May 28, 2015

INSTRUCTION NO. 178 “On the Organization of Settlements between Credit Organizations in the Territory of the Republic of Tajikistan”

This Instruction is developed in accordance with Article 31 of the Law of the Republic of Tajikistan “On the National Bank of Tajikistan”, Article 45 of the Law of the Republic of Tajikistan “On Islamic Banking Activities”, and Article 39 of the Law of the Republic of Tajikistan “On Banking Activities”. This Instruction regulates and defines general approaches and requirements for the organization of the settlement system between credit organizations operating within the territory of the Republic of Tajikistan.

Chapter 1. General Provisions

1. The terms used in this Instruction mean the following: – credit organizations (hereinafter – Bank) – legal entities (banks, Islamic banks, microcredit deposit organizations, and Islamic microcredit deposit organizations) that, based on a license from the National Bank of Tajikistan, carry out all or specific banking operations and/or Islamic banking operations as provided by law; – electronic payment document – an electronic image of a paper payment document, having the format established by the payment system rules, containing the necessary information for settlements and certified with an electronic digital signature; – Reference Book “Bank Identification Codes of Credit Organizations of the Republic of Tajikistan” – a systematic list of all participants in the electronic payment system, forming an integral part of the electronic payment system and used by all its software-technical complexes; – National Bank of Tajikistan Payment System – an electronic payment system that ensures interbank payments through correspondent accounts (subaccounts) of banks opened in the National Bank of Tajikistan, using electronic means for receiving, processing, transmitting, and protecting information; – participant bank – a credit organization holding a correspondent account opened in the National Bank of Tajikistan and having concluded an Agreement on interbank settlement services through the National Bank of Tajikistan Payment System; – payer bank – a credit organization initiating the payment process; – receiver bank – a credit organization receiving the payment; – calculation center – a structural unit of the National Bank of Tajikistan responsible for opening and servicing correspondent accounts (subaccounts) of banks and ensuring the uninterrupted functioning of the electronic payment system; – information security – activities aimed at preventing unauthorized and accidental access, leakage of protected information, as well as ensuring the confidentiality, authenticity, and integrity of information. – bank identification code – a conditional nine-digit numerical indicator that identifies the Bank or its branch, assigned by the National Bank of Tajikistan and serving as a mandatory attribute of a participant bank; – interbank settlements – settlements between banks for fulfilling monetary claims and obligations arising from their own payments and payments initiated by their clients. – correspondent account (subaccount) – an account opened for the Bank in the National Bank of Tajikistan and/or another Bank to carry out interbank settlements; – correspondent relations – contractual relationships between banks for carrying out interbank settlements; – open position – the difference between the total amount of payments received by the Bank and the total amount of payments sent from the Bank for settlements between Banks under direct correspondent relations. If the difference is positive, the open position is credit; if negative, it is debit.

2. Settlements between banks, and/or their branches, may be carried out by the following methods: – settlements between banks and/or their branches via correspondent accounts (subaccounts) opened in the National Bank of Tajikistan; – settlements between banks via direct correspondent relations; – settlements between branches of banks under one Bank (intra-system settlements). Banks and their branches may simultaneously carry out interbank settlements by several methods, provided that banks act on the principles of expediency, reliability, security, and acceleration of settlement terms.

Chapter 2. Settlements between Banks and their branches via correspondent accounts (subaccounts) opened in the National Bank of Tajikistan 3. To ensure efficiency, reliability, security, acceleration of fund turnover in interbank settlements, and risk minimization within the payment system, payments are executed through the National Bank of Tajikistan Payment System on a gross basis in real-time mode. 4. To carry out interbank settlements, each Bank located within the territory of the Republic of Tajikistan must have a correspondent account in the National Bank of Tajikistan. For branches, upon application by the Head Office, the National Bank of Tajikistan may grant permission to open a correspondent subaccount in the National Bank of Tajikistan. 5. The basis for opening a correspondent account for the Bank in the National Bank of Tajikistan is the written application of the Bank and the consent of the supervisory body of the National Bank of Tajikistan, as well as the Bank’s compliance with the requirements of the National Bank of Tajikistan and conclusion of an Agreement (Appendix No. 1). The requirements for opening a correspondent account are established by the Board of Directors of the National Bank of Tajikistan. 6. A branch of a foreign bank operating within the territory of the Republic of Tajikistan must open a correspondent account in the National Bank of Tajikistan to carry out interbank settlements. 7. Excluded (Resolution of the Board of NBT dated October 14, 2011 No. 202). 8. Correspondent accounts (subaccounts) are opened in accordance with the “Chart of Accounts of the National Bank of Tajikistan” and the “Chart of Accounts for Credit Organizations”. 9. All Banks and their branches to which correspondent accounts (subaccounts) are opened in the National Bank of Tajikistan are assigned a bank identification code for unambiguous identification during settlements, which is entered into the Reference Book “Bank Identification Codes of Credit Organizations of the Republic of Tajikistan”. The procedure for assigning a bank identification code and correspondent account is set forth in Appendix No. 2. The bank identification code and correspondent account assigned to the Bank are unique. After a Bank’s liquidation, its bank identification code may be re-assigned to a newly created Bank after the expiration of the term established for storing payment documents in accordance with Tajik legislation. Branches of Banks that do not have a correspondent subaccount in the National Bank of Tajikistan are conditionally assigned the number of their Head Office’s correspondent account. 10. Payments via correspondent accounts (subaccounts) of banks and their branches opened in the National Bank of Tajikistan are executed within the available funds on the correspondent account (subaccount). Banks and their branches must timely ensure the receipt of funds to their correspondent account (subaccount) in an amount necessary for executing payments. 11. The forms of settlement documents when carrying out interbank settlements, their attributes, and the procedure for their preparation must meet the requirements for settlement documents defined by the regulatory act of the National Bank of Tajikistan on non-cash settlements in the Republic of Tajikistan. 12. Operations for debiting funds from, or crediting to, the Bank’s correspondent account (subaccount) are confirmed by a statement from the correspondent account (subaccount) (Appendix No. 3). The correspondent account statement contains the following attributes: a) document name; b) identification code of the calculating bank; c) number of the correspondent account (subaccount); d) date of the current operation; e) date of the previous operation; f) incoming balance; g) type of payment document; h) number of the payment document; i) identification code of the payer bank; j) payer’s account; k) identification code of the receiver bank; l) receiver’s account; m) amount of the payment document; n) total debit turnover; o) total credit turnover; p) outgoing balance. Statements from correspondent accounts are certified with a stamp and signature of the Bank’s responsible person and bound into the daily operational document package. When statements from correspondent accounts are stored in electronic form, initial and final balances, as well as debit and credit turnovers, are verified by the Bank’s responsible person in the computer system and recorded on a machine-readable medium ensuring authorship and integrity. Banks independently determine the storage form for statements from correspondent accounts. 13. Banks and their branches carry out interbank settlements using electronic payment documents formed based on:

• paper payment documents of clients;
• paper payment documents of the Bank or branch;
• electronic payment documents received via automated systems from the client-initiator of the payment.
• electronic payment documents received via intra-system automated systems from the bank branch.

14. The payer bank, based on payment documents, forms electronic payment documents in its own name and bears responsibility for reflecting the client’s payment document attributes within them.
15. Interbank settlements are executed electronically based on an electronic payment document containing all attributes of the primary payment document. The payer bank transmits to the National Bank of Tajikistan a formed electronic payment document, or a batch of electronic payment documents, using communication channels.
16. Based on the electronic payment document received from the payer bank, funds are debited from the correspondent account (subaccount) of the payer bank and credited to the correspondent account (subaccount) of the receiver bank. The electronic payment document is stored in electronic archives according to the procedure established by current Tajik legislation for payment documents.
17. The electronic payment document must necessarily contain the attributes of the payment document on which it was formed, namely: – document number; – document date; – taxpayer identification number and payer name; – payment amount (in words and figures); – payer’s account number; – name of the payer bank; – identification code of the payer bank; – correspondent account (subaccount) of the payer bank; – name of the receiver bank; – identification code of the receiver bank; – correspondent account (subaccount) of the receiver bank; – taxpayer identification number and receiver name; – receiver’s account number; – document type; – payment purpose code; – payment purpose text.
18. Upon receipt of the electronic payment document, the receiver bank must credit funds to the client’s account within the current operational day of the bank. Funds credited to the client’s account may be used by the client from the moment of crediting. The procedure and methods for informing the client about funds received into their account are stipulated in the agreement between the Bank and the client.
19. The receiver bank, based on the electronic payment document for transferring funds to a client’s account, creates a paper copy of the electronic payment document containing information from the primary payment document. Paper copies of the electronic payment document are certified by the signature of an authorized person, a stamp with the “Electronic Document” endorsement of the receiver bank, and issued to the recipient of funds as an attachment to their statement. When maintaining a paper archive, one copy of the electronic payment document is bound into the Bank’s daily operational document package.
20. Funds erroneously received into the correspondent account of the receiver bank and processed by the receiver bank to accounts pending clarification are subject to return to the payer bank no later than the operational day following the day of their receipt into the correspondent account.
21. Debiting funds from the correspondent account of the payer bank is executed solely upon the instruction of the holder of the correspondent account (subaccount), unless otherwise provided by Tajik legislation.
22. After debiting funds from the correspondent account of the payer bank and crediting them to the correspondent account of the receiver bank, the interbank settlement is final, irrevocable, and not subject to cancellation.

Chapter 3. Settlements between banks via direct correspondent relations 23. Excluded (Resolution of the Board of NBT dated October 14, 2011 No. 202). 24. When establishing direct correspondent relations, banks analyze each other’s financial condition and, based on the decision of their authorized body, conclude bilateral agreements for direct correspondent relations. 25. To carry out settlements via direct correspondent relations, banks open correspondent subaccounts for each other. For opening a correspondent subaccount, banks provide each other with: a copy of the Charter, a copy of the License for banking operations, an application to open a correspondent subaccount, copies of the balance sheet for the last reporting year, and a card with specimen signatures and seal impression. The agreement on direct correspondent relations (Appendix No. 4 and Appendix No. 5) must be registered in the payment systems department of the National Bank of Tajikistan. 26. When establishing direct correspondent relations with multiple banks, a separate correspondent subaccount is opened for each bank. 27. All interbank settlement operations by the Bank must be executed based on electronic payment documents using information security means. 28. Banks may carry out interbank settlements via direct correspondent relations by opening bilateral correspondent subaccounts, i.e., opening Nostro and Loro correspondent subaccounts in each bank, or by settlements based on the netting principle of claims and obligations (clearing). 29. In case of opening bilateral correspondent subaccounts, the payer bank is the owner of funds on the Nostro correspondent subaccount and manages them independently. The operation for debiting funds from the Loro correspondent subaccount is executed by the receiver bank according to payment instructions of the payer bank within available funds on the subaccount. The payer bank must replenish its correspondent subaccount in the receiver bank through the National Bank of Tajikistan Payment System. The total balance on Nostro correspondent subaccounts in a bank must not exceed the balance of the correspondent account held in the National Bank of Tajikistan. 30. In case of carrying out interbank settlements via direct correspondent relations based on the clearing principle, final settlement for open positions is executed through the National Bank of Tajikistan Payment System. Banks must establish in their agreements on direct correspondent relations the maximum size of the open debit position that may arise during the operational day. When a bank is in an open credit position, it must settle the correspondent’s open debit position through the National Bank of Tajikistan Payment System before the end of the operational day. Balances on correspondent subaccounts for direct correspondent relations between banks at the end of the operational day must equal zero. 31. Banks must daily, no later than 9:00 AM, provide information on the completed operational day to the payment systems department of the National Bank of Tajikistan, according to Appendix No. 6 or Appendix No. 7. 32. The Bank must ensure sufficient liquidity on its correspondent account in the National Bank of Tajikistan to execute final settlements for direct correspondent relations. 33. The Bank must ensure the security of communication channels and the information security system used at each stage of processing the electronic payment document.

Chapter 4. Settlements between branches under one bank (intra-system settlements) 34. The procedure for opening accounts (correspondent subaccounts) for settlements between branches under one bank is established independently by the Head Office. 35. The procedure for carrying out settlements between branches under one bank is regulated by internal Settlement Rules, developed as a separate document and approved by the Bank’s authorized body, taking into account the requirements of this Instruction.

Final Provisions 36. In case of non-compliance by a Bank with the provisions of this Instruction, the National Bank of Tajikistan shall apply urgent corrective measures and impact measures in accordance with the Law of the Republic of Tajikistan “On the National Bank of Tajikistan”.

Appendix No. 1 Sample Contract for Interbank Settlement Services CONTRACT No. _________ on the provision of interbank settlement services Dushanbe National Bank of Tajikistan (hereinafter – National Bank) represented by the Chairman __________________, acting on the basis of the Law of the Republic of Tajikistan “On the National Bank of Tajikistan”, on one side, and

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(full name of the credit organization) (hereinafter – Bank) represented by ________________________________________________________________________________________, (surname, first name, patronymic of the Chairman of the credit organization) Acting on the basis of ________________________________, on the other side, (hereinafter – Parties) have concluded this Agreement as follows:

1. Subject of the Contract 1.1. The National Bank provides the Bank with services for carrying out interbank settlements in national currency through the National Bank of Tajikistan Payment System (hereinafter – System) in accordance with legislative acts of the Republic of Tajikistan, regulatory acts of the National Bank of Tajikistan, and this Contract.
2. Obligations and Rights of the Parties 2.1. The National Bank undertakes to: 2.1.1. Provide the Bank with access to the System for receiving and transmitting messages via available communication channels (switched telephone lines, dedicated lines, etc.). 2.1.2. Receive and process the Bank’s electronic payment documents (hereinafter – payment documents) as they arrive, in accordance with the format established by the National Bank, and execute electronic fund transfers with simultaneous reflection on the Bank’s correspondent account in the National Bank. 2.1.3. Provide the Bank with information on executed payment documents during the operational day. 2.1.4. Provide the Bank with information on the balance of funds on the correspondent account during the operational day. 2.1.5. Provide the Bank with a final statement of executed payment documents for the day. 2.1.6. Ensure maintenance and storage of archives of all received and transmitted payment documents with digital signatures on electronic media, for the term established for storing payment documents. 2.1.7. Notify the Bank at least 30 days in advance of changes to Tariffs for settlement services, installation and data recovery, requirements for software-technical interaction between the National Bank and the Bank, and procedures for exchanging electronic messages. 2.1.8. Take all necessary measures to restore System functionality in case of unexpected downtime and notify the Bank electronically or by fax. 2.1.9. Send the Bank an invoice for services rendered on paper via the National Bank’s dispatch service. 2.1.10. Connect the Bank to the System from “”________ 20___. 2.2. The National Bank has the right to: 2.2.1. Suspend obligations under this Contract until debt clearance, in case of non-payment by the Bank of an invoice presented by the National Bank for services rendered for more than 15 calendar days from the date of presentation. 2.2.2. Determine procedures for exchanging electronic messages in the System. 2.2.3. Debit funds without the Bank’s instruction from its correspondent account, according to credit agreements and other obligations of the Bank before the National Bank that are not settled within established terms. 2.3. THE BANK undertakes to: 2.3.1. Comply with the National Bank’s requirements for opening a correspondent account and ensuring information security of the System user workstation. 2.3.2. Comply with rules and fulfill regulatory acts of the National Bank establishing the procedure for organizing and functioning of the System. 2.3.3. Pay for National Bank services timely in accordance with the conditions of this Contract. 2.3.4. Notify the National Bank within one month about all changes in its founding documents (charter, regulations, license for banking operations), payment details, and postal address. 2.3.5. Ensure strict compliance with requirements when preparing the package of payment documents for settlements through the System, according to the format established by the National Bank. 2.3.6. Control the processing of sent and received payment documents in accordance with electronic message exchange procedures. 2.3.7. Ensure maintenance and storage of archives of all received and transmitted payment documents with digital signatures on machine-readable media ensuring authorship and integrity, and/or on paper media, for the term established for storing payment documents. 2.3.8. Upon exiting the System, the Bank must return to the National Bank its electronic protection key (HASP). The National Bank does not refund the cost of the used electronic protection key (HASP) to the Bank. 2.4. The BANK has the right to: 2.4.1. Receive information from the National Bank according to points 2.1.3, 2.1.4, and 2.1.5 of this Contract. 2.4.2. Use another channel if one communication channel is refused for access to the National Bank’s mail system.
3. Payment Procedure 3.1. Upon connection to the System, the Bank makes a one-time payment for the computer program of the front-office part of the electronic payment system software complex, for installation services and use of the electronic key (HASP)...