Decision on the manner of conducting on‑site supervision and imposing measures related to bank resolution actions

Pursuant to Article 47 paragraph 1 item 6 of the Law on the National Bank of the Republic of Macedonia (Official Gazette of the Republic of Macedonia No. 158/10, 123/12, 43/14, 153/15, 6/16 and 83/18 and Official Gazette of the Republic of North Macedonia No. 110/21, 74/24 and 16/25) and Article 48 paragraph 4 of the Bank Resolution Law (Official Gazette of the Republic of North Macedonia No. 209/23), the Council of the National Bank of the Republic of North Macedonia has adopted the following DECISION on the manner of conducting on-site supervision and imposing measures related to bank resolution actions (Official Gazette of the Republic of North Macedonia No. 71/25)
I. GENERAL PROVISIONS

1. This Decision shall prescribe the manner of conducting on-site supervision in the
   bank by the National Bank of the Republic of North Macedonia (hereinafter: the National Bank) as the competent authority for resolution and imposing measures in accordance with the Bank Resolution Law (hereinafter: the Law).
2. The provisions of this Decision that refer to a bank shall accordingly apply to other
   legal entities to which the Law applies, unless otherwise determined by this Decision.
3. The terms used in this Decision shall have the meaning established by the Law, the
   Banking Law and the by-laws adopted on the basis of these laws.
   II. MANNER OF CONDUCTING ON-SITE SUPERVISION
4. The National Bank shall conduct on-site supervision in the bank whenever it deems
   it necessary for the purpose of exercising the powers prescribed by the Law, especially in the following cases:

• for the purpose of obtaining data and information necessary for the
  preparation, updating and implementation of the bank's resolution plan, as well as to verify the completeness and accuracy of the reports and information submitted by the bank;
• to verify whether there are significant impediments to banks resolution or
  whether the bank acts on the measures to remove the identified impediments to resolution;
• for the purpose of determining and verifying the fulfillment of the requirements
  for the minimum requirement for own funds and eligible liabilities.

5. The on-site supervision referred to in item 4of this Decision shall be implemented
   through:

• review of business and accounting documentation, reports and data about the
  bank, policies and internal acts and other documentation related to the bank's operations, in original paper-based form or in the form of an electronic record on a medium and in the form requested by the authorized person;

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• written and oral explanations received from the members of the Management
  Board, persons with special rights and responsibilities and other employees of the bank.

6. For the purposes of this Decision, on-site supervision shall be conducted by persons
   employed by the National Bank based on a written authorization from the Governor of the National Bank for conducting on-site supervision in the bank (hereinafter: authorized persons). Duties of the bank during the on-site supervision
7. The Bank shall be obliged, in accordance with its security procedures, to provide
   the authorized persons referred to in item 6of this Decision with access to all premises, to provide them with access to available documentation, including electronically stored data, as well as to provide the documentation and information requested by the authorized persons. The bank shall be obliged to provide appropriate space in the bank for the authorized persons referred to in item 6of this Decision, in which the physical access can be limited, as well as access to the Internet and other IT equipment requested by the authorized persons.
8. When conducting an on-site supervision at the request of the authorized persons,
   the members of the bank's Management Board and the other persons with special rights and responsibilities in the bank shall be obliged to provide answers, together with documented evidence, to all questions that are of importance for its implementation.
9. If the bank uses outsourcing services, it shall be obliged, upon request of the
   authorized persons, to enable them to conduct on-site supervision on the premises of the outsourcing entity to the extent necessary to achieve the objectives of the on-site supervision. Notification on conducting an on-site supervision at the bank
10. The National Bank shall submit a notification to the bank that it plans to conduct
    an on-site supervision, not later than ten days prior to the commencement of the supervision of the bank. The notification shall contain:

• information about the subject of the on-site supervision;
• the date of commencement of the on-site supervision;
• the planned duration of the on-site supervision;
• information about the authorized person who will manage the on-site
  supervision;
• a list of information that the bank should prepare for the purpose of the on￾site supervision.
  The notification referred to in paragraph 1 of this item shall also state the deadlines within which the relevant information should be prepared and submitted to the authorized persons referred to in item 6 of this Decision. As an exception to paragraph 1 of this item, if there is a need an on-site supervision to be conducted urgently, the notification on the on-site supervision may be submitted to the bank immediately prior to its commencement.

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On-Site Supervision Report
11. On completion of the on-site supervision, the authorized persons referred to in
item 6of this Decision shall prepare a supervision report, which shall contain at least the following elements:

• start and end date of the on-site supervision;
• names of the authorized persons who conducted the on-site supervision;
• conclusion and facts on the subject of the on-site supervision.

12. The supervision report shall be confidential document of the National Bank and the
    bank shall be obliged to keep it. The bank may quote or otherwise state the content of the report, upon prior written approval from the Governor of the National Bank.
13. The supervision report shall be submitted to the Management Board of the bank.
    The members of the bank's Management Board shall be obliged to review the supervision report, inform the members of the Supervisory Board about its content and submit a copy to the Internal Audit Department.
14. The bank that was subject to an on-site supervision shall have the right to objection
    to supervision report, in which it provides an explanation with documented evidence of the findings that it considers to be unfounded or do not correspond to the actual situation in the bank. The bank shall submit the objection to the National Bank within a period specified by the National Bank, which may not be shorter than eight days, nor longer than fifteen days from the receipt of the report.
15. The authorized persons shall be obliged to review the bank's objection to the
    supervision report and to prepare a response to the objection in which they declare their (non)acceptance of the bank's individual explanations for the findings of the supervision report. The response to the objection referred to in paragraph 1 of this item shall be submitted to the bank within twenty-five days of receipt of the objection.
16. After submitting the response to the objection under item 15of this Decision, the
    on-site supervision shall be considered completed, and the supervision report shall be considered final. The response to the complaint shall be an integral part of the final supervision report. A copy of the final supervision report shall be submitted to the President of the bank's Supervisory Board, with a request that it should be reviewed by the members of the Supervisory Board at the first following meeting.
    III. IMPOSING MEASURES
17. If significant impediments to the bank resolution are identified, the activities to
    take measures in order to eliminate the identified impediments shall be performed in accordance with Article 9 of the Law.
18. The National Bank may impose measures to remove the identified impediments to
    the bank resolution, regardless of whether the bank's operations are in compliance with supervisory or other regulatory requirements.

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19. When deciding to impose measure under Article 9, paragraph (6) of the Law, the
National Bank shall assess whether the measure is appropriate, necessary and proportionate to reduce or remove the impediments to the implementation of the prefered resolution strategy of the bank. The measure shall be considered appropriate if its implementation can significantly reduce or remove the impediment to the bank resolution, within a reasonable time. The measure shall be considered necessary if there are no other measures that can significantly reduce or remove the impediment to the bank resolution to the same extent, considering the costs and negative effects on the regular bank operations. The measure shall be considered proportionate if the total benefit from the feasibility and credibility of conducting bankruptcy proceedings or bank resolution proceedings and from achieving the resolution objectives set out in the Law exceeds the total costs and negative effects associated with removing the impediments to resolution.
IV. FINAL PROVISIONS
20. This Decision shall enter into force on the eighth day from the date of its publication
in the Official Gazette of the Republic of North Macedonia, and shall apply from 13 October 2025. D. No. 02-10864/13 Governor and Chairman 27 March 2025 of the Council of the National Bank Skopje of the Republic of North Macedonia Anita Angelovska-Bezhoska