Regulation on the "Overnight Credit" of the National Bank of the Kyrgyz Republic

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Date of creation: 2025-10-02

Approved by the Resolution of the Board of Directors of the National Bank of the Kyrgyz Republic No. 10/7 dated March 28, 2013

Regulation on the "Overnight Credit" of the National Bank of the Kyrgyz Republic

(As amended by the Resolutions of the Board of Directors of the National Bank of the Kyrgyz Republic dated January 29, 2014 No. 2/9, March 19, 2014 No. 9/6, April 26, 2017 No. 17/3, October 25, 2017 No. 2017-P-09/45-9-(NPA), March 24, 2020 No. 2020-P-09/15-4-(NPA), December 14, 2022 No. 2022-P-09/78-12-(NPA), September 26, 2025 No. 2025-P-09/49-2-(NPA))

1. General Provisions

2. This Regulation on the "Overnight Credit" of the National Bank of the Kyrgyz Republic (hereinafter - the Regulation) defines the procedure for providing commercial banks of the Kyrgyz Republic (hereinafter - Bank/Banks), licensed by the National Bank, with "overnight credit" through the Automated Trading System of the National Bank (hereinafter - ATS).

3. The "overnight credit" is provided in accordance with Articles 6, 16, and 17 of the Constitutional Law of the Kyrgyz Republic "On the National Bank of the Kyrgyz Republic", this Regulation, the Regulation on the Operation of the Automated Trading System of the National Bank of the Kyrgyz Republic, and the General Agreement on "overnight credit" concluded between the National Bank and the Bank. The standard form of the General Agreement on "overnight credit" is provided in Appendix 1 to this Regulation.

4. The "overnight credit" is provided to the Bank for the purpose of maintaining short-term liquidity in national currency, with a repayment term on the next business day after the issuance date, at a fixed interest rate, under collateral in the form of a pledge, on any business day.

5. The interest rate for "overnight credit" (rate - "overnight") is established by the Monetary Policy Committee of the National Bank (hereinafter – MPC), based on the goals and objectives of the monetary policy conducted by the National Bank, and may be changed.

6. The Bank's obligation to repay the "overnight credit" is secured by collateral in the form of a pledge. The subject matter of the pledge includes state securities of the Cabinet of Ministers of the Kyrgyz Republic, notes of the National Bank, and securities of international financial organizations issued and placed within the territory of the Kyrgyz Republic, provided that the issuer has a long-term sovereign credit rating not lower than the highest (AAA) and next to highest (AA+), as assigned by rating agencies Moody's Investors Service (USA), Standard & Poors (USA), Fitch Ratings (United Kingdom) (hereinafter – securities). Requirements for the volume sufficiency (in percentage terms), type, and other parameters of collateral in the form of securities are established by the MPC. Securities pledged to the National Bank cannot be pledged or re-pledged to a third party.

7. The operating rules and time schedule for submitting the Application for "overnight credit", repayment of "overnight credit", and automatic repayment of "overnight credit" in the ATS are governed by the Regulation on the Operation of the Automated Trading System of the National Bank of the Kyrgyz Republic (hereinafter – ATS Operation Regulation).

8. The conditions and rules established by the ATS Operation Regulation apply to this Regulation.

9. Terms and Concepts Used

For the purposes of this Regulation, in addition to those specified below, definitions and terms established in the ATS Operation Regulation are applied.

8. "Overnight Credit" – a credit in som, provided by the National Bank to the Bank during the business day with the condition of repayment no later than the next business day, at a fixed interest rate, under collateral in the form of a pledge.

9. "Overnight Credit" Authorization – a procedure performed by an authorized person of the National Bank to confirm and further execute the Application for "overnight credit".

10. Depository – a legal entity of the Kyrgyz Republic responsible for accounting and storage of securities, registration of transfer, and confirmation of ownership rights to securities. For securities of international financial organizations, the Depository is CJSC "Central Depository".

11. Investment sub-balance of the "Depo" account – a sub-balance of the Bank opened in the Depository for accounting and storage of securities owned by the Bank.

12. Reserve sub-balance of the "Depo" account – a sub-balance of the Bank opened in the Depository, intended for reserving securities during the attraction of "overnight" and intraday credits.

13. Authorized Person – an employee of a structural subdivision of the National Bank who is authorized to authorize applications for attracting "overnight credit".

14. Conditions and Procedure for Providing "Overnight Credit"

15. "Overnight credit" is provided in compliance with the general principles of lending: term, cost, repayability, and security.

16. To obtain "overnight credit", the Bank must meet the following requirements: · hold a license from the National Bank for banking operations; · not be under temporary administration. A Bank under temporary administration may be provided with "overnight credit" upon a corresponding resolution of the Board of Directors of the National Bank; · have a correspondent account in national currency at the National Bank; · have a signed General Agreement on "overnight credit" with the National Bank; · not have overdue monetary obligations to the National Bank for previously obtained "overnight credits" and interest thereon; · not have overdue monetary obligations to the National Bank for other loans and interest thereon; · have sufficient collateral meeting requirements established by the National Bank; · be connected to the interbank communication network; · be connected to the ATS.

17. Issuance of "overnight credit" is carried out by the National Bank through the ATS.

18. To obtain "overnight credit" through the ATS, the Bank must submit an Application for "overnight credit" to the ATS, completed in the prescribed form. If collateral consists of securities of international financial organizations, the Bank must submit the Application for "overnight credit" through the ATS module "Interbank Lending" by 12:00.

19. The Bank's Application for "overnight credit" in the ATS is subject to authorization by an authorized person of the National Bank.

20. The Bank assumes obligations to the National Bank for "overnight credit" based on its Application for "overnight credit" in the ATS.

21. Non-compliance of the Bank with the requirements of paragraph 15 of this Regulation is grounds for refusing to provide the Bank with the requested amount of "overnight credit". In case of refusal, the authorized person of the National Bank does not authorize the Bank's application in the ATS for "overnight credit", indicating the reason.

22. "Overnight credit" may also be issued if the Bank fails to fulfill its obligations for intraday credit. The unpaid intraday credit is converted into "overnight credit" in accordance with the regulatory legal acts of the National Bank on intraday credit and the General Agreement on intraday credit concluded between the National Bank and the Bank.

23. The calculation of the interest amount for "overnight credit" is performed in accordance with the conditions of paragraph 25 of this Regulation.

24. Issuance of "overnight credit" is carried out by crediting the amount of the "overnight credit" provided by the National Bank to the Bank's correspondent account at the National Bank.

25. Calculation of Interest Amount for "Overnight Credit"

26. The interest rate for "overnight credit" is communicated to the Bank through the ATS and published on the National Bank's website.

27. Interest accrual on the "overnight credit" amount is calculated using a simple interest formula for the actual period of using the "overnight credit", based on 360 days in a year, according to the following formula: P = (C x I x T)/360/100, where: P – accrued interest; C – "overnight credit" amount (som); I – "overnight" rate (% per annum); T – term of the provided credit (in days).

28. The calculation of the actual number of calendar days during which the Bank used the "overnight credit" includes weekends and holidays established by legislation or declared by the Cabinet of Ministers of the Kyrgyz Republic.

29. Collateral for "Overnight Credit"

30. In addition to the requirements for the type of collateral established by the MPC in accordance with paragraph 5 of this Regulation, securities provided as collateral for "overnight credit" must meet the following requirements: · belong to the Bank by ownership; · be stored and accounted for on the "Investment" or "Reserve" sub-balance of the Bank's "Depo" account in the Depository; · not be encumbered by other obligations.

31. Non-compliance of collateral with the requirements imposed by the National Bank on collateral is grounds for refusing to provide the Bank with the requested amount of "overnight credit".

32. The subject matter of the pledge is considered transferred by the Bank to the possession of the National Bank from the moment the National Bank provides the Bank with "overnight credit".

29-1. The conditions and procedure for interaction regarding the acceptance of securities of international financial organizations as collateral for "overnight credit" are regulated by separate bilateral agreements between CJSC "Central Depository" with the National Bank of the Kyrgyz Republic and between CJSC "Central Depository" with the Bank.

6. Procedure for Repayment of Credit

7. Repayment of the principal amount of "overnight credit" and accrued interest is made by the Bank on the next business day after the issuance date through the ATS.

8. If the Bank does not independently carry out repayment of the principal amount of "overnight credit" and interest thereon in the ATS on the repayment day, automatic repayment of "overnight credit" is performed by debiting funds from the Bank's correspondent account for the principal amount of "overnight credit" and interest thereon in accordance with the time schedule specified in paragraph 6 of this Regulation.

9. On the repayment day of "overnight credit" and interest thereon, the Bank ensures a sufficient volume of funds in national currency on its correspondent account at the National Bank to carry out automatic repayment of "overnight credit" and interest thereon in the ATS.

10. "Overnight credit" issued due to the extension of unpaid intraday credit is repaid in accordance with this Regulation and the General Agreement on "overnight credit".

11. "Overnight credit" and accrued interest thereon must be repaid in full; partial repayment is not permitted.

12. In case of timely and full fulfillment by the Bank of its obligations for "overnight credit" and accrued interest thereon, the ATS releases and transfers securities pledged to the investment or reserve sub-balance of the Bank's "Depo" account in the Depository. The release and transfer of securities of international financial organizations pledged are carried out by CJSC "Central Depository".

13. "Overnight credit" is considered overdue if the Bank does not have a sufficient volume of funds on its correspondent account at the National Bank to fully repay the principal amount of "overnight credit" and interest thereon within the time specified in paragraph 30 of this Regulation.

14. If "overnight credit" is overdue, payment deferral is not granted and a one-time penalty of 1% of the amount of "overnight credit" issued to the Bank is charged.

15. If "overnight credit" provided to the Bank in accordance with this Regulation is overdue, the National Bank carries out repayment of "overnight credit", accrued interest, and penalty by enforcing the pledge subject in accordance with the legislation of the Kyrgyz Republic.

16. The procedure for repaying the Bank's overdue obligations for the principal amount of credit, accrued interest, and penalty is determined by the General Agreement on "overnight credit" according to Appendix 1 to this Regulation.

17. Final Provisions

18. The National Bank may introduce amendments and additions to this Regulation aimed at improving the conduct of operations for providing "overnight credit".

Appendix 1 to the Regulation on "Overnight Credit" of the National Bank of the Kyrgyz Republic

GENERAL AGREEMENT ON "OVERNIGHT CREDIT" No. ______ Bishkek "____" ____________20

National Bank of the Kyrgyz Republic, hereinafter referred to as "National Bank" or "Pledgee", represented by _______________, acting on the basis of the order of the National Bank of the Kyrgyz Republic "__________________________" dated ___________ No., on one part, and _____________________, hereinafter referred to as "Bank" or "Pledgor", represented by _______________________, acting on the basis of the Charter,