Regulation on the Intraday Credit of the National Bank of the Kyrgyz Republic

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Date of creation: 2023-05-17

Approved by the Resolution of the Board of Directors of the National Bank of the Kyrgyz Republic No. 10/8 dated March 28, 2013

Regulation "On the Intraday 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 March 19, 2014 No. 9/7, 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))

1. General Provisions

2. This Regulation "On the Intraday Credit of the National Bank of the Kyrgyz Republic" (hereinafter - the Regulation) defines the terms and procedures for providing intraday credit by the National Bank of the Kyrgyz Republic (hereinafter - the National Bank) to commercial banks of the Kyrgyz Republic (hereinafter - Bank/Banks), licensed by the National Bank, through the automated trading system of the National Bank (hereinafter - ATS).

3. Intraday credit is provided by the National Bank to the Bank in accordance with Articles 6 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 Intraday Credit concluded between the National Bank and the Bank (hereinafter - the General Agreement). The standard form of the General Agreement is provided in Appendix 1 to this Regulation.

4. Intraday credit is provided to the Bank to enhance the efficiency of the payment system of the Kyrgyz Republic.

5. Intraday credit is issued in the national currency, on an interest-free basis, under collateral in the form of a pledge, on any working day.

6. The Bank's obligation to repay the intraday credit is secured by collateral in the form of a pledge. The subject matter of the pledge consists of state securities of the Cabinet of Ministers of the Kyrgyz Republic and notes of the National Bank (hereinafter - securities). Requirements for the volume of sufficiency (in percentage), type, and other parameters of collateral in the form of securities are established by the Monetary and Credit Policy Committee of the National Bank (hereinafter - MCPP). Securities pledged to the National Bank cannot be re-pledged to a third party.

7. Unpaid intraday credit is automatically extended in the ATS until the next working day, with reissuance as an "overnight" credit, at an interest rate established for using the "overnight" credit on the reissuance date. Credit extension is carried out only once.

8. The operating rules and time schedule for submitting the Application for intraday credit and repaying it 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).

9. The terms and rules established by the ATS Operation Regulation apply to this Regulation.

10. 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.

9. Intraday credit - a loan in som provided by the National Bank to the Bank to ensure timely and uninterrupted payments in the payment system of the Kyrgyz Republic, with repayment on the day of issuance, under collateral in the form of a pledge.

10. "Overnight" credit - a loan in som provided by the National Bank to the Bank during the operating day with repayment no later than the next working day, at a fixed interest rate, under collateral in the form of a pledge.

11. Intraday credit authorization - a procedure performed by an authorized person of the National Bank to confirm and further execute the Application for intraday credit.

12. Depository - a legal entity of the Kyrgyz Republic carrying out accounting and storage of securities, registration of transfer, and confirmation of ownership rights to securities.

13. Investment sub-account of the "depot" account - a Bank's sub-account opened in the Depository for accounting and storage of securities owned by the Bank.

14. Reserve sub-balance of the "depot" account - a Bank's sub-balance opened in the Depository, intended for reserving securities during the attraction of "overnight" and intraday credits.

15. Authorized person - an employee of a structural subdivision of the National Bank authorized to authorize applications for attracting intraday credit.

16. Terms and Procedures for Providing Intraday Credit

17. Intraday credit is provided in compliance with general lending principles: term, repayment, and security.

18. To obtain intraday 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 receive intraday credit upon a corresponding resolution of the Board of Directors of the National Bank; · have a correspondent account in the national currency at the National Bank; · have a signed General Agreement on Intraday Credit with the National Bank; · have a signed General Agreement on "Overnight" Credit with the National Bank; · have no overdue monetary obligations to the National Bank regarding previously obtained "overnight" credits and interest thereon; · have no overdue monetary obligations to the National Bank regarding other credits 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.

19. Intraday credit is issued by the National Bank through the ATS.

20. To obtain intraday credit through the ATS, the Bank must submit an Application for intraday credit, completed in the established form within the ATS.

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

22. The Bank acknowledges its obligations to the National Bank regarding intraday credit based on its Application for intraday credit in the ATS.

23. Non-compliance of the Bank with the requirements of paragraph 17 of this Regulation is grounds for refusing to provide the requested amount of intraday credit. In case of refusal, the authorized person of the National Bank does not authorize the Bank's application in the ATS, indicating the reason.

24. Intraday credit is issued by crediting the amount of intraday credit provided by the National Bank to the Bank's correspondent account at the National Bank.

25. The time schedule for submitting the application for intraday credit is governed by the ATS Operation Regulation.

26. Collateral for Intraday Credit

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

28. Non-compliance of collateral with requirements imposed by the National Bank is grounds for refusing to provide the requested amount of intraday credit.

29. 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 intraday credit to the Bank.

30. Procedure for Repayment and Extension of Intraday Credit

31. Repayment of the intraday credit amount is made on the day of issuance by the Bank through the ATS in accordance with the Regulation on the Operation of the Automated Trading System of the National Bank of the Kyrgyz Republic.

32. Intraday credit must be repaid in full; partial repayment of intraday credit is not permitted.

33. In case of timely and full performance by the Bank of its obligations regarding intraday credit, the ATS releases and transfers securities provided as collateral to the investment or reserve sub-balance of the Bank's "depot" account in the Depository.

34. Intraday credit is considered unpaid if the Bank fails to perform its obligations to repay intraday credit in the ATS within the time specified in the Regulation on the Operation of the Automated Trading System of the National Bank of the Kyrgyz Republic. An unpaid intraday credit is automatically extended in the ATS in accordance with paragraph 6 of this Regulation. In this case, the Bank's obligations to repay intraday credit cease, and the collateral for the credit becomes security for the extended credit reissued as an "overnight" credit.

35. Legal relations arising between the National Bank and the Bank after reissuing unpaid intraday credit as "overnight" credit are further governed based on the Regulation on "Overnight" Credit.

36. Final Provisions

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

Appendix 1 to the Regulation "On the Intraday Credit of the National Bank of the Kyrgyz Republic"

GENERAL AGREEMENT on Intraday Credit No. _______________ Bishkek "____" __20 g.

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, on the other part, collectively hereinafter referred to as "Parties", guided by the Regulation "On the Intraday Credit of the National Bank of the Kyrgyz Republic" (hereinafter "Regulation"), have concluded this General Agreement (hereinafter "General Agreement") on the following:

1. SUBJECT MATTER OF THE AGREEMENT

1.1. The subject matter of this General Agreement is the determination of terms for providing intraday credit by the National Bank to the Bank through the ATS and the regulation of legal relations arising therefrom.

2. TERMS FOR PROVIDING, REPAYMENT AND EXTENSION OF INTRADAY CREDIT

2.1. The Bank has the right to receive intraday credit in accordance with the Regulation and this General Agreement.

2.2. The procedure for obtaining, repaying, and extending intraday credit is governed by the Regulation, the Regulation on the Operation of the Automated Trading System of the National Bank of the Kyrgyz Republic, and this General Agreement.

2.3. To obtain intraday credit in the ATS, the Bank must meet the requirements of the Regulation on the Operation of the Automated Trading System of the National Bank of the Kyrgyz Republic and the Regulation.

2.4. Intraday credit is issued in the national currency, on an interest-free basis, under collateral in the form of a pledge, to enhance the efficiency of the payment system of the Kyrgyz Republic, on any working day.

2.5. The National Bank undertakes to timely and fully credit funds to the Bank's correspondent account at the National Bank after authorization of the Bank's application in the ATS for obtaining intraday credit.

2.6. Repayment of intraday credit is made by the Bank in the ATS on the day of issuance within the time specified in the Regulation on the Operation of the Automated Trading System of the National Bank of the Kyrgyz Republic.

2.7. In case of timely and full performance by the Bank of its obligations regarding intraday credit, the ATS releases and transfers securities provided as collateral to the investment or reserve sub-balance of the Bank's "depot" account in the Depository.

2.8. In case of non-performance by the Bank of its obligations to repay intraday credit in the ATS within the time specified in the Regulation on the Operation of the Automated Trading System of the National Bank of the Kyrgyz Republic, the Bank grants the ATS the right to automatically extend unpaid intraday credit until the next working day, with reissuance of unpaid intraday credit as "overnight" credit, at the interest rate established for using "overnight" credit on the reissuance date.

2.9. Legal relations arising between the National Bank and the Bank after reissuing unpaid intraday credit as "overnight" credit are further governed based on the Regulation on "Overnight" Credit and the General Agreement on "Overnight" Credit.

3. COLLATERAL

3.1. The Bank's obligation to repay intraday credit is secured by collateral in the form of a pledge. Collateral in the form of a pledge must meet requirements defined in the Regulation.

3.2. 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 intraday credit to the Bank, according to its Application for obtaining intraday credit.

3.3. The Pledgee does not insure the subject matter of the pledge. Insurance of the subject matter of the pledge up to its value may be carried out by the Pledgor at its own expense.

3.4. The subject matter of the pledge, serving as collateral for unpaid intraday credit, upon extension and reissuance as "overnight" credit, becomes security for the issued "overnight" credit.

4. LIABILITY OF THE PARTIES

4.1. The Bank bears full responsibility for its obligations regarding intraday credit in accordance with the Application for obtaining intraday credit, the Regulation, and this General Agreement.

4.2. The National Bank bears no responsibility for damages incurred by the Bank due to its violation of the Regulation and this General Agreement.

4.3. The Parties bear full responsibility for the correctness, timeliness, and confidentiality of actions performed by their employees related to operations for obtaining, repaying, and extending intraday credit, in accordance with the Regulation and this General Agreement.

4.4. The Bank bears full responsibility for compliance with security and confidentiality conditions when working with private keys and signature key certificates issued to the Bank's authorized persons by the certification center performing functions of the National Bank, as well as for compliance with their storage and usage rules.

5. TECHNICAL FAILURES

5.1. Technical failures in the ATS are governed in accordance with the Regulation on the Operation of the Automated Trading System of the National Bank of the Kyrgyz Republic. In case of a technical failure in the ATS, resulting in the impossibility of automatic issuance of intraday credit, the National Bank by order of the Deputy Chairman may suspend the issuance of intraday credit for the period until the ATS functionality is restored, or carry out the issuance of intraday credit based on the Application for obtaining intraday credit provided by the Bank in paper form in accordance with Appendix 1 to this General Agreement.

6. DISPUTE RESOLUTION

6.1. Disputes and disagreements arising during the execution of this General Agreement are subject to settlement through negotiations by the Parties, aiming to develop a mutually acceptable solution.

6.2. Unsettled disputes are resolved in the manner established by normative legal acts of the Kyrgyz Republic.

7. OTHER TERMS

7.1. This General Agreement may be supplemented and amended by mutual consent of the Parties.

7.2. All supplements and amendments to this General Agreement are valid if executed in written form and signed by both Parties.

7.3. In case of reorganization or liquidation of the Parties, all rights and obligations of the Parties under this General Agreement pass to the successors of the Parties.

7.4. This Agreement is executed in 2 (two) original copies in Russian and in 2 (two) copies in Kyrgyz, with two copies for each of the Parties having equal legal force. Two copies of this Agreement are stored at the National Bank, and two others are transferred to the Bank.

8. TERM OF VALIDITY AND TERMINATION PROCEDURE

8.1. This General Agreement enters into force from the moment of its signing by both Parties and remains valid for one calendar year.

8.2. This General Agreement is considered extended for each subsequent calendar year if neither Party has notified the other in writing of its intention to terminate within one calendar month prior to the expiration of this General Agreement. Termination of the General Agreement does not terminate the Bank's obligations regarding already obtained intraday credits and related collateral.

8.3. The Parties have the right to unilaterally terminate this General Agreement with prior notification to the other Party one calendar month in advance.

8.4. The National Bank has the right to unilaterally terminate this General Agreement without prior notification to the Bank in cases: · violation by the Bank of the Regulation and conditions of this General Agreement; · non-compliance by the Bank with the conditions of paragraph 2.3 of this General Agreement; · revocation by the National Bank of the Bank's license for banking operations; · court recognition of the Bank as bankrupt; · cessation of the Bank's activities as a legal entity, in accordance with current legislation of the Kyrgyz Republic.

9. LEGAL ADDRESSES AND DETAILS OF THE PARTIES

National Bank of the Kyrgyz Republic / National Bank of the Kyrgyz Republic _____________________ Postal index, address / Postal index, address __________________________ (Position) / (Position) __________________________ (Full Name, Signature) / (Full Name, Signature) M.P. / M.P. Bank Name / Bank Name _______________________ (Postal index, address) / (Postal index, address) corr. Acct. No. ____________ at the National Bank / Corr. Acct. No. ____________ at the National Bank _______________________ (Position) / (Position) _______________________ (Full Name, Signature) / (Full Name, Signature) M.P. / M.P.

Appendix 1 to the General Agreement on Intraday Credit

APPLICATION FOR OBTAINING INTRADAY CREDIT No. _________ " " __________20 g.

Borrower___________________________________________________________________ (Name of Borrowing Bank)

1. Requests to issue intraday credit in the amount of ________________________________ som (amount in figures and words) Date of issuance ____________ Date of repayment _________

2. As collateral for the credit, securities are provided in the amount of ___________________________________som, including: (amount in figures and words)

No.	Type of Securities	Issuance	Maturity Date	Quantity (pcs)	Nominal Amount (in som)
1	2	3	4	5	6

Total: / Total:

3. In case of non-performance of its obligations to repay intraday credit until ______g. of the operating day of issuance, requests to automatically extend the amount of intraday credit until the next working day from its issuance, with reissuance as "overnight" credit.

4. Interest rate for "overnight" credit: ______ % per annum. Date of issuance: _________ Date of repayment: _________

5. Requests to consider as collateral for the extended intraday credit, reissued as "overnight" credit, the collateral provided for securing intraday credit specified in paragraph 2 of this Application.

6. Requests to carry out further actions by the National Bank, starting from the moment of reissuing the amount of intraday credit as "overnight" credit until its full repayment, in accordance with the Regulation on "Overnight" Credit approved by Resolution of the Board of Directors No. ___ dated _______ g.

7. In case of insufficient funds in the Bank's correspondent account at the National Bank, the Bank grants the right to the National Bank to unilaterally enforce claim on the subject matter of the pledge listed in paragraph 2 of this Application, immediately upon the due date for performance of the obligation secured by the pledge.

(Name of Borrowing Bank) (Position) _______________________ (Signature) M.P.

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