Methodological Guidelines for Filling Out the Periodic Regulatory Report of Microcredit Companies and Agencies Operating According to Islamic Banking Principles

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Date of creation: 2025-03-13

Appendix 2 to the Resolution of the Supervisory Committee of the National Bank of the Kyrgyz Republic of 26.12.2014 No. 46/1

METHODOLOGICAL GUIDELINES

on filling out the periodic regulatory report of microcredit companies and microcredit agencies carrying out operations in accordance with Islamic principles of banking and finance

(Changes and additions approved by the Resolutions of the Supervisory Committee of the NBKR No. 36/1 dated 01.09.2016, No. 37/3 dated 05.10.2017, No. 06/2 dated 08.02.2018, No. 43/2 dated 30.12.2022, No. 13/1 dated 06.03.2025)

I.

GENERAL PROVISIONS

These methodological guidelines provide an explanation of the procedure for filling out the appendices to the Regulation "On the periodic regulatory report of microcredit companies and microcredit agencies carrying out operations in accordance with Islamic principles of banking and finance" (hereinafter - PRR), for the following sections:

1. title page;

2. Section 1 "Regulatory report on financial position";

3. Section 2 "Report on comprehensive income";

4. Section 3 "Asset information";

Table A. "Classification of assets by risk level";

Table B. "Financing methods";

Table V. "Breakdown of the portfolio by financing by industry and region";

Table G. "Information on provided financing";

Table D. "Information on problematic clients";

Table E. "Information on parallel financing";

Table Z. "Information on volumes of provided financing by industry and region";

Table I. "Restructured assets carrying credit risk";

Table K. "Sensitivity analysis of assets and liabilities to changes in yield rates (GAP analysis)";

Table L. "Maturity dates of assets/liabilities"

5. Section 4 "Self-assessment report";

6. Section 5 "Report on foreign assets and liabilities":

"Data on private debt obligation/creditor debt" Form No. 1-ND;

"Data on servicing of debt obligation/creditor debt" Form No. 2-ND;

"Report on balances of funds in accounts or deposits of residents in foreign banks";

"Notification of an account (deposit) opened in a foreign bank";

7. Section 6 "Disclosures";

8. Section 7 "Information on compliance with economic norms of MCCs".

9. information on members of the Board of Directors, Management Board, main founders (shareholders) and members of the Shariah Council of MCCs and MCAs;

10. information on individual officials of MCCs and MCAs;

11. basic information on MCCs and MCAs, information on branches/representative offices/structural units (offices), subsidiary and affiliated companies, acting committees.

All amounts must be indicated in thousands of somas (amounts in foreign currency must be indicated in som equivalent at the official rate of the National Bank on the reporting date).

(changes and additions approved by the Resolution of the Supervisory Committee of the NBKR No. 13/1 dated 06.03.2025)

ceased to be valid in accordance with the Resolution of the Supervisory Committee No. 37/3 dated 05.10.2017.

Sections not described in these methodological guidelines are filled out in accordance with the corresponding regulatory legal acts of the National Bank.

II.

TITLE PAGE

The title page indicates:

date and outgoing registration number;

date as of which the report was prepared. The date is the last day of the reporting period, and the report is compiled as of the end of the day;

date of completion of the report;

frequency – "quarterly", "annual" or "adjustment". Submission of an adjusted report is allowed if technical errors arise. In this case, only those reporting forms in which changes were made are submitted, and changes are marked with a marker;

(changes and additions approved by the Resolution of the Supervisory Committee of the NBKR No. 13/1 dated 06.03.2025)

accuracy of the report is confirmed - one or two of the following lines are indicated:

a) by internal audit - if the audit was conducted by internal audit or auditors;

b) internal audit without conclusion - if an audit was conducted, and as a result of which no auditor's report on the correctness of banking operations and accounting is presented;

c) internal audit with conclusion - if an audit was conducted, and as a result of which an auditor's report on the correctness of banking operations and accounting is presented;

name of the reporting organization, indicated in capital letters;

certifying signatures of the head of the executive body, chief accountant;

signature of the employee responsible for compiling and submitting the PRR with indication of position, surname, first name, patronymic and phone number.

III.

INFORMATION ON MEMBERS OF THE BOARD OF DIRECTORS, MANAGEMENT BOARD, SHARIAH COUNCIL AND MAIN FOUNDERS (SHAREHOLDERS) OF MCCs/MCAs

(ceased to be valid in accordance with the Resolution of the Supervisory Committee of the NBKR of March 6, 2025 No. 13/1)

IV.

INFORMATION ON INDIVIDUAL OFFICIALS

(ceased to be valid in accordance with the Resolution of the Supervisory Committee of the NBKR of March 6, 2025 No. 13/1)

V.

BASIC INFORMATION

(ceased to be valid in accordance with the Resolution of the Supervisory Committee of the NBKR of March 6, 2025 No. 13/1)

VI.

SECTIONS

OF THE PERIODIC REGULATORY REPORT

1. Section 1. "Regulatory report on financial position"

In the financial position report, the most significant items of the financial position of MCCs and MCAs are separately highlighted from the point of view of the regulatory report.

The regulatory report on financial position consists of three columns:

name of the report item;

total - value of the item in somas;

foreign currency - som equivalent of balance sheet items in foreign currency at the official rate of the National Bank on the reporting date.

All amounts must be indicated in thousands of somas.

Amounts in items of the financial position report (except for financing) are shown net of corresponding amounts of reserves for potential losses and losses (hereinafter - RPPU), depreciation charges and discount/premium.

(changes and additions approved by the Resolution of the Supervisory Committee of the NBKR No. 43/2 dated 30.12.2022)

1 §. Subsection A. "Assets"

In item 1 "Cash" the amount of cash, including banknotes and coins in the circulating cash register, in somas and other currencies is indicated.

In item 2 "Settlement accounts" the amount of funds in settlement accounts in banks or other financial and credit organizations, including in foreign currency, is indicated.

In item 3 "Deposits in other banks and FCOs, including:" the amount of funds in accounts in other banks and other FCOs, including in foreign currency, is indicated.

(changes and additions approved by the Resolution of the Supervisory Committee of the NBKR No. 13/1 dated 06.03.2025)

In item 4 "Securities" the book value of securities corresponding to Shariah standards owned by MCCs and MCAs is indicated: portfolio of trading securities, securities available for sale and securities held to maturity.

In item 5 "Financing provided to FCOs" the unpaid balance of the principal amount of financing provided to FCOs on the reporting date is indicated.

(changes and additions approved by the Resolution of the Supervisory Committee of the NBKR No. 13/1 dated 06.03.2025)

In item 6 "Financing provided to clients" the unpaid balance of the principal amount of financing provided to clients, except for financing provided to financial and credit organizations on the reporting date, is indicated.

The amount of financing provided to financial and credit organizations and clients must be equal to the amount of financing provided to financial and credit organizations in tables 3A "Classification of assets by risk level" and the amount of financing reflected in tables 3B "Financing methods" and 3V "Breakdown of the portfolio by financing by industry and region" of Section 3 "Asset information".

In item 7 "Minus: RPPU" the amount of special RPPU for financing provided to financial and credit organizations and other clients is indicated.

The amount of special RPPU for this item must be equal to the amount of special RPPU in table 3A "Classification of assets by risk level".

In item 8 "Total financing" the amount of financing, less special RPPU for financing (sum of items 5 and 6 less item 7), is indicated.

In item 9 "Investments" the amount of capital investments in companies not consolidated in this report is indicated.

In item 10 "Assets/inventory for subsequent transfer to clients" the cost of buildings, structures, furniture, equipment and other assets/inventory purchased by MCCs and MCAs for subsequent transfer to clients, including under murabaha, ijara/ijara munthaiya bit tamlik contracts, is indicated. These data are reflected in the breakdown into real estate and movable property.

In item 11 "Fixed assets" the cost of land or land plots, buildings and other structures owned or used by MCCs and MCAs, furniture and equipment, including vehicles, as well as the cost of materials, labor and other capitalizable expenses arising in connection with construction or major repair, is indicated.

In item 12 "Other property, total" the sum of the following sub-items is indicated:

a) "client's real estate accepted in repayment of received financing" indicates the client's real estate (former collateral) accepted by MCCs and MCAs in repayment of an asset less the corresponding RPPU.

b) "other client property accepted in repayment of provided financing" indicates other client property (except real estate) accepted by MCCs and MCAs in repayment of an asset less the corresponding RPPU.

In item 13 "Other assets" the book value of assets not listed above is indicated.

In item 14 "Total assets" the sum of items 1, 2, 3, 4, 8, 9, 10, 11, 12, 13 is indicated.

2 §. Subsection B. "Liabilities and Equity"

In item 1 "Financing received from banks of the Kyrgyz Republic" financing received by MCCs and MCAs from commercial banks of the Kyrgyz Republic is indicated.

In item 2 "Financing received from other FCOs of the Kyrgyz Republic" financing received by MCCs and MCAs from FCOs of the Kyrgyz Republic, except commercial banks of the Kyrgyz Republic, is indicated.

In item 3 "Financing received from international financial organizations and donors" financing received by MCCs and MCAs from international financial and donor organizations (other financing sources) is indicated.

In item 4 "Financing received from international FCOs" financing received by MCCs and MCAs from international FCOs is indicated.

In item 5 "Obligations to state authorities" funds received from state authorities are indicated.

In item 6 "Subordinated debt obligations" long-term obligations are indicated, the owners of which have the right to assets after satisfaction of claims of other creditors. This item also reflects grants, provided that the grant was received by MCCs and MCAs for a certain period of time or under certain conditions.

In item 7 "Funds borrowed by MCCs from legal entities and founders (shareholders)" the amount of borrowings from legal entities and founders (shareholders) – individuals and legal entities is indicated. Information is provided in the breakdown:

a) "Funds borrowed by MCCs from founders (shareholders) – individuals" indicates the amount of borrowings from founders (shareholders) – individuals;

b) "Funds borrowed by MCCs from founders (shareholders) – legal entities" indicates the amount of borrowings from founders (shareholders) – legal entities.

In item 8 "Other" other liabilities not reflected in previous items are indicated.

In item 9 "Total liabilities" the sum of items 1-8 is indicated.

Note: in Section 6 "Disclosures" it is necessary to disclose in detail information on the sources of received financing, liabilities, grants and other liabilities.

In item 10 "Charter capital (ordinary shares)" the total amount of ordinary shares/founding contributions of MCCs and MCAs is indicated.

In item 11 "Preferred shares" the total amount of preferred shares of MCCs and MCAs is indicated (for joint-stock companies).

In item 12 "Capital invested above par" the amount of funds contributed by shareholders and founders above the par value of shares of MCCs and MCAs is indicated, it represents the difference between the selling price of ordinary and preferred shares and their par value.

In item 13 "Additional capital contributed by individuals and legal entities" monetary funds contributed by individuals and legal entities above the paid-up charter capital or as additional capital, which is accounted for until the re-registration in connection with a change in charter capital, are indicated. These funds are credited only if MCCs and MCAs have a contract with individuals and legal entities on the contribution of funds towards the acquisition of shares/dol in the charter capital of MCCs and MCAs with the following conditions:

• irrevocability (under any circumstances);

• indeterminate term of the contributed funds;

• in the event of bankruptcy of MCCs and MCAs, claims on these funds will be satisfied in the same queue as shareholders of MCCs and MCAs.

Subsequently, additional monetary funds contributed by individuals and legal entities must be directed to the charter capital (ordinary or preferred shares) of MCCs and MCAs.

In item 14 "Undistributed profit (losses)" the amount of net undistributed profit or losses of MCCs and MCAs is indicated. This item includes the sum of the following sub-items:

a) "profit (losses) of previous years" – profit or losses of previous years that remained in MCCs and MCAs after allocation to reserves for future needs and corresponding payments of profit to founders (shareholders) are indicated.

b) "profit (loss) of the current year" – profit (losses) received by MCCs and MCAs in the current year is indicated.

The amount presented in this item must be equal to the value of item 28 "Net profit (losses)" of Section 2 "Report on comprehensive income".

In item 15 "Reserves for future needs" the amount of reserves created for future events in MCCs and MCAs from the distribution of profit is indicated.

In item 16 "Asset revaluation reserve" the amount of existing reserves created from the revaluation of assets and unrealized exchange rate differences from the revaluation of foreign currency is indicated.

In item 17 "Total RPPU for financing" the total amount of RPPU for financing is indicated.

The total amount of RPPUs must be equal to the total amount of RPPUs indicated in table 3A "Classification of assets by risk level" of Section 3 "Asset information".

In item 18 "Total equity" the sum of items 10 to 17 is indicated.

In item 19 "Total: liabilities and equity" the sum of items 9 and 18 is indicated.

(changes and additions approved by the Resolution of the Supervisory Committee of the NBKR No. 13/1 dated 06.03.2025)

3 §. Subsection V. "Off-balance sheet liabilities"

In item 1 "Obligations to provide financing" obligations to provide financing are reflected.

In item 2 "Currency operations" obligations of MCCs and MCAs for currency operations are reflected.

In item 3 "Obligations for the purchase of assets" obligations of MCCs and MCAs for the purchase of assets in the future are reflected.

In item 4 "Other off-balance sheet liabilities" all other off-balance sheet liabilities not listed above are reflected.

In item 5 "Total off-balance sheet liabilities" the sum of items 1 to 4 is shown.

(changes and additions approved by the Resolution of the Supervisory Committee of the NBKR No. 36/1 dated 01.09.2016)

4 §. Subsection G. "Breakdown of other assets and other liabilities"

In item 1 "Other assets" the breakdown of assets of MCCs and MCAs by the following items is indicated:

a) "income accrued for receipt" indicates the amount of accrued income for receipt by MCCs and MCAs;

b) "prepayment paid" indicates the amount of payments paid by MCCs and MCAs to other parties in accordance with contract terms;

c) "unidentified debtor balances" indicates amounts of funds pending clarification;

d) "other other assets" indicates the amount of other other assets of MCCs and MCAs not listed above.

In item 2 "Special RPPU on other assets" the amount of special RPPU on the aforementioned other assets of MCCs and MCAs is indicated.

In item 3 "Net other assets" the net value of other assets (difference between items 1 and 2) is indicated.

In item 4 "Other liabilities" the breakdown of liabilities is shown:

a) "income accrued to clients for payment" indicates the amount of accrued income from MCCs and MCAs operations for payment;

b) "deferred income (markup) on murabaha and salam operations" indicates deferred income on murabaha and salam operations.

c) "taxes payable" indicates the amount of liabilities to be paid to the budget;

d) "unidentified creditor debt" indicates amounts of funds pending clarification;

e) "dividends payable" indicates the amount of funds to be paid to shareholders;

f) "other other liabilities" indicates other other liabilities not listed above, including RPPU on off-balance sheet liabilities.

This item must be equal to item 9 of subsection B. "Liabilities and equity".

2. Section 2. "Report on comprehensive income"

The report on comprehensive income consists of three columns:

in the column "name of the item" items are indicated for which MCCs and MCAs receive income;

in the column "current period" values of items with cumulative total for the reporting period are indicated;

in the column "previous period" values of the item for the same period of the previous year are indicated.

If the report as of December 31 of the reporting year is presented in the "current period" column, then information as of December 31 of the year preceding the reporting year must be presented in the "previous period" column. If semi-annual reporting as of June 30 of the reporting year is submitted, respectively, as the previous period, reporting as of June 30 of the preceding year is indicated.

Amounts in this report can be positive or negative. A negative amount, i.e., the amount of net loss or expenses for the year, must be indicated in parentheses.

All amounts must be indicated in thousands of somas.

§ 1. Subsection "Income received from operations"

In item 1 "Income on deposits in commercial banks" income received by MCCs and MCAs from placements in banks and other FCOs is indicated.

In item 2 "Income on financing provided to FCOs" income received on financing provided to financial and credit organizations is indicated.

In item 3 "Income on financing provided to clients" income received by MCCs and MCAs on financing to clients, except FCOs, is indicated.

In item 4 "Income on attracted investments" income on attracted investments is indicated.

In item 5 "Other income from operations" income not listed above, including income from securities, is indicated.

In item 6 "Total" the total amount of items 1-5 is indicated.

(changes and additions approved by the Resolution of the Supervisory Committee of the NBKR No. 13/1 dated 06.03.2025)

§ 2. Subsection "Expenses incurred on operations"

In item 7 "Expenses incurred on operations" expenses incurred by MCCs and MCAs on received financing and other operations are indicated.

In item 8 "Net income received from operations" the difference between items 6 and 7 is indicated.

In item 9 "Expenses for forming RPPU" expenses on special and total RPPU for financing are indicated.

In item 10 "Net income received from operations, after deductions to RPPU" the amount of net income after deductions to RPPU is shown as the difference between items 8 and 9.

(changes and additions approved by the Resolution of the Supervisory Committee of the NBKR No. 13/1 dated 06.03.2025)

§ 3. Subsection "Income from other operations"

In item 11 "Fees for services and commissions" fees and service charges received by MCCs and MCAs are indicated.

In item 12 "Income/dividends from capital and share investments, including in subsidiaries and associated companies" income received by MCCs and MCAs from investments in capital and shares, including in subsidiaries and associated companies, is indicated.

In item 13 "Income/losses from exchange rate differences" income received by MCCs and MCAs as a result of foreign currency activities due to changes in exchange rates is indicated.

In item 14 "Income from agency operations" income received by MCCs and MCAs as a result of providing retail banking services based on agency contracts is indicated.

In item 15 "Other income" income not listed above is indicated.

In item 16 "Total" the sum of items 11 and 15 is indicated.

(changes and additions approved by the Resolution of the Supervisory Committee of the NBKR No. 13/1 dated 06.03.2025)

§ 4. Subsection "Operating expenses and charitable expenses"

In item 17 "Personnel expenses" expenses related to the payment of salaries, bonuses and other similar payments to employees of MCCs and MCAs (including payments to the supervisory body/board of directors/Shariah Council) are indicated:

In item 18 "Fixed asset expenses" expenses for the maintenance of buildings and structures, furniture, vehicles, equipment, computers, software, as well as intangible assets, including depreciation charges and property tax expenses, are indicated.

In item 19 "Administrative expenses" expenses for office supplies, communication, transport, travel expenses, utilities, representation expenses, staff training, car depreciation, car expenses, payment for services of hired specialists, expenses for computer data processing, advertising and marketing expenses, publication and subscription expenses, other administrative expenses are indicated.

In item 20 "Other operating expenses" all operating and other expenses not mentioned above, including unexpected income/expenses, are indicated.

In item 21 "Takaful" expenses related to insurance (takaful) are indicated.

In item 22 "Taxes" expenses related to the payment of taxes, except property tax and profit tax, are indicated.

In item 23 "Total" the sum of items 17 to 22 is indicated.

In item 24 "Expenses for RPPU (except financing operations)" the amount of expenses for special and total RPPU for operations other than financing is indicated.

In item 25 "Net operating income (loss)" the net profit (losses) received by MCCs and MCAs (sum of items 6 and 16, minus items 7, 9, 23 and 24) is indicated.

In item 26 "Expenses for zakat and charity" expenses directed by MCCs and MCAs to zakat and charity are indicated.

In item 27 "Profit tax" expenses for profit tax are indicated.

In item 28 "Net profit (losses)" the net profit (losses) of the reporting organization (item 25 minus items 26 and 27) is indicated.

(changes and additions approved by the Resolution of the Supervisory Committee of the NBKR No. 13/1 dated 06.03.2025)

3. Section 3. "Asset information"

This section includes statistical information on outstanding balances of the financing portfolio on the reporting date.

1§. Subsection A. "Classification of assets by risk level"

This table contains information on assets subject to classification by risk level, as well as the amount of RPPU.

For all types of assets, their cost less the corresponding discount (if any) must be indicated.

In column 1 "Item" the type of asset subject to classification is indicated.

In column 2 "Total" the sum of columns 3 and 5 is indicated.

In column 3 "Current (non-overdue) assets" the outstanding balance of the principal amount of assets for which there is no overdue on scheduled payments of the principal amount and markup/income is indicated.

In column 4 "Restructured assets" the amounts of restructured assets are indicated (while the amount of restructured assets must be included in the sum of overdue or non-overdue assets).

(changes and additions approved by the Resolution of the Supervisory Committee of the NBKR No. 13/1 dated 06.03.2025)

In column 5 "Total overdue assets" the outstanding balance of