Registration Information
Registered with the Ministry of Justice by the Board Resolution of the National Bank of Tajikistan dated December 30, 2022, No. 157 on February 9, 2023, No. 1213.
Supplements registered with the Ministry of Justice by the Board Resolution of the National Bank of Tajikistan dated October 29, 2024, No. 77 on December 10, 2024, No. 12131.

Instruction No. 255 on the Procedure for Issuing Loans and Accruing Interest in Credit Organizations

Instruction No. 255 on the procedure for providing loans and accruing interest in credit organizations (hereinafter – the Instruction) is developed in accordance with the requirements of Part 3 of Article 3 and Part 5 of Article 29 of the Law of the Republic of Tajikistan 'On Banking Activity' and Article 23 of the Law of the Republic of Tajikistan 'On Microfinance Organizations', and defines the procedure for issuing loans and accruing interest on loans in credit organizations.

1. GENERAL PROVISIONS

1. The following main terms are used in this Instruction:

1. loan – a sum provided to the borrower by a credit organization on terms of interest payment and repayability, within a specified period;
2. microloan – a loan issued by banks up to 500,000 (five hundred thousand) somoni, non-bank credit organizations and microfinance organizations based on regulatory legal acts established by the National Bank of Tajikistan;
   Note: The following client obligations are also equated to the concepts of loan and microloan if the credit organization has the right to conduct the following operations:

• guarantees and other similar off-balance sheet obligations issued by a credit organization to other persons;
• overdrafts, regardless of the cause of their occurrence;
• letters of credit;
• holding by credit organizations of any credit document of a person, for which it acts as the drawer, drawee or guarantor (having liability);
• factoring operations;
• financial leasing operations;
• financing of commercial transactions, including forfeiting operations;
• mortgage and consumer loans;
• bank credit cards;
• any legalized obligations for the issuance of a loan;

3. lending limits – the maximum size of the aggregate of all loans issued to one borrower or a group of borrowers. Credit organizations may establish additional limits within the norms established by the National Bank of Tajikistan;
4. joint microloan – a microloan issued by microfinance organizations or microfinance funds jointly through structural subdivisions of other credit organizations on terms of interest payment and repayability, for a specified period (Board Resolution of the NBT dated 29.10.2024, No. 77);
5. credit risk – the probability of damage arising from the failure by the borrower and/or counterparty to fulfill its obligations in accordance with the agreed terms;
6. interest rate on a loan – an expression of percentage established in relation to the loan for a specified accrual period. The interest accrual period on a loan is determined by the contract between the credit organization and the client and is not limited (i.e., the period may be one day, one week, one month, two months, quarter, half-year, year, etc., as agreed by the client and the credit organization);
7. effective annual interest rate – an expression of percentage according to which interest on a loan is accrued taking into account all client payments for servicing the loan to the credit organization;
8. credit scoring – a system for assessing client creditworthiness based on numerical statistical methods;
9. pledge/collateral – a method of securing the fulfillment of an obligation, by virtue of which the creditor (pledgee) of a secured obligation has the right in case of non-fulfillment by the debtor to satisfy its claims from the value of the pledged property in priority to other creditors of the person to whom this property belongs (pledgor), except for cases established by law;
10. remote identification of the client – obtaining identifying information from the client (client's representative) by a credit organization using information and communication technologies;
11. related party – as defined in the Law of the Republic of Tajikistan 'On Banking Activity'.

2. The minimum size of loans to borrowers is established in accordance with the requirements of banking legislation and regulatory legal acts of the National Bank of Tajikistan.
3. A credit organization is obliged to indicate in the loan contract the interest rate on a loan and the effective annual interest rate on a loan.
4. Unless otherwise provided, documents specified in this Instruction may be developed, signed and stored in electronic form in accordance with the requirements of the legislation of the Republic of Tajikistan on electronic signatures.

2. CREDIT POLICY AND CREDIT COMMITTEE OF A CREDIT ORGANIZATION

5. Internal regulatory acts of credit organizations regulating their credit policy are approved by the supervisory board (board of trustees) taking into account the requirements of this Instruction.
6. Internal acts include basic provisions concerning loan issuance - types and currency of loans, interest rate, volume and purposes of the loan, division of responsibility and competence of credit organization employees in lending, policy for classification and analysis of the loan portfolio, allocations to reserves, as well as measures taken in case of difficult-to-collect loans. 7. Credit organizations may also provide group loans to individuals and legal entities, small and medium-sized entrepreneurs. 8. Credit organizations in the process of implementing their credit products, including new credit products, various initiatives, etc., are not allowed to use unreliable and false information in advertising that violates the rights of financial service consumers. 9. In banks, non-bank credit organizations and microfinance deposit organizations, a head office credit committee consisting of at least 5 members is established by the supervisory board resolution to implement credit policy. The credit committee, being a working collegial body of the credit organization, includes representatives of the management of the credit organization, as well as heads of structural credit and legal departments, the client-facing operational department (front office), and other services.
91. Microfinance organizations or microfinance funds may issue microloans to borrowers jointly with other credit organizations through their structural subdivisions. Bilateral cooperation shall be governed by service agreements and internal regulatory documents of credit organizations (Board Resolution of the NBT dated 29.10.2024, No. 77).
10. The head office credit committee of a credit organization is headed by the Deputy Chairman of the Board or a person replacing him, who is not a supervisor of the structural subdivision in lending.
11. Review and decision-making on issuing large loans, loans to related parties, trust loans, and guarantees fall within the exclusive powers of the head office credit committee of a credit organization.
12. Head offices of banks, non-bank credit organizations and microfinance deposit organizations create credit committees for their branches based on internal regulatory acts and establish requirements for implementing credit policy. Banks, non-bank credit organizations and microfinance deposit organizations determine the activities of the credit committees of their structural subdivisions within the requirements of regulatory legal acts taking into account risk, volume, level, sphere and lending limits. 13. Members of the branch credit committees of banks, non-bank credit organizations and microfinance deposit organizations must be at least 3 persons. 14. Depending on their structure, microfinance organizations and microfinance funds may create a credit committee, the composition of which must include no less than 3 persons. 15. All issues related to loan issuance or refusal, transfer or sale of loans, write-off of loans from accounts, guarantees, obligations, endorsements and other substitutes equated to them are considered at meetings of the credit committee, with the consent of the supervisory board (board of trustees) if necessary. 16. The regulation on the credit committee is approved by the supervisory board (board of trustees) of a credit organization, where competencies and division of powers for loan issuance are established, including lending limits, as well as the degree of full responsibility for issued loans. 17. No single person in a credit organization has the right to issue loans for which the head office credit committee has refused.

3. LOAN OPERATIONS

18. A credit organization maintains records of documents in electronic form in a separate loan file for each borrower in accordance with the legislation of the Republic of Tajikistan and regulatory legal acts of the National Bank of Tajikistan, the electronic form of which must be copied to a backup database. These records include all necessary information regarding borrowers, loan issuance terms and requirements for information exchange with credit bureaus. 19. A credit organization maintains records in a separate journal on the degree and form of interconnection between borrowers, whose debt accumulates when determining lending limits. 20. Before providing a loan to a client (before signing the loan contract), a credit organization provides information in written or electronic form about all types of loans issued, lending terms, loan repayment terms (actual principal and interest payment periods), total cost of the loan, notification to credit bureaus, types of accepted collateral, etc. This certificate is prepared in the form of an announcement or promotional brochure or electronically and approved by the board (management) of the credit organization.

4. LOAN APPLICATION REVIEW

21. Loan issuance work begins from the moment of accepting the client's application. Personnel reviewing loan applications, depending on volume and types, perform the following actions in accordance with internal regulatory acts, including:

1. studying the borrower by involving full information about him as well as about the economic sector in which he intends to use the received funds;
2. relevant information will be obtained from credit bureaus in accordance with the Law of the Republic of Tajikistan 'On Credit History'.
3. conducting an interview (telephone call) with the borrower or his authorized representative, during which a preliminary psychological profile of the borrower is compiled, his competence and professional readiness are determined.

22. The package of requested documents for a borrower - legal and physical person is established separately:

1. request from the borrower - a legal entity a package of documents allowing to fully and comprehensively assess its state, including:

• loan application indicating the purpose, requested amount, term, source of loan repayment, on the basis of which the loan is provided;
• founding documents for legal entities;
• balance report, profit and loss statement and cash flow statement;
• copy of the tax authority certificate at the place of registration confirming no debt to the budget;
• business plan (taking into account the borrower's business prospects);
• completed standard questionnaire;
• card with specimen signatures of persons having the right to first and, if provided, second signature;
• inventories of property with indicated value, or other collateral that may be provided by the borrower as security for loan repayment;
• other documents, provision of which is established by the borrower in accordance with internal documents of the credit organization;

2. request from the borrower - a physical person at least the following documents:

• loan application indicating the purpose, requested amount, term and source of loan repayment, on the basis of which the loan is provided;
• copy of passport;
• copy of guarantor's passport when using a guarantee;
• copy of the document confirming the taxpayer identification number;
• copy of certificate, patent or other document confirming the borrower's activity when issuing loans to entrepreneurs;
• business plan when issuing a loan to an individual entrepreneur;
• list of property with indicated value or other collateral that may be provided by the borrower as security for the loan;
• other documents, provision of which is established by the borrower in accordance with internal documents of the credit organization.

23. Along with the specified documents, a one-page certificate with a font size of at least 22 reflecting the main loan terms must be attached to the client's loan file. The certificate must be signed by the client acknowledging familiarity with the loan terms. This certificate may be stored electronically and approved in accordance with the legislation of the Republic of Tajikistan.
24. In the presence of an approved microloan credit scoring model by the relevant body (supervisory/trusteeship board) or credit committee of a credit organization, the credit organization may, after completing the relevant documents, decide to issue or refuse the loan based on this model (up to 50,000 somoni).
25. If the collateral for the received loan is a guarantee or suretyship, work should be conducted to study the guarantor or surety, their professional reputation, solvency, liability and readiness to fulfill their obligations in the same manner as for the borrower.
26. All actions of employees studying the borrower must be performed based on internal documents of a credit organization defining the powers and functional responsibilities of these employees.
27. All loan applications submitted to a credit organization for review are registered in an application journal (in paper or electronic form), regardless of the decision made on the application.
28. The credit committee may, for the purpose of conducting a re-check and obtaining additional information about the client, decide to improve the conclusion.
29. The decision on loan issuance or refusal is an internal bank document, a duplicate of which is not issued to the client. In case of non-compliance with established requirements, a credit organization has the right not to issue, reduce the amount or shorten the term of the requested loan.
30. The client is notified about the corresponding decision orally and/or electronically, and at the client's request, the credit organization may provide a written notification. The content of the decision is recorded electronically and the original is filed in the borrower's loan file.
31. A credit organization, depending on the size of loans, establishes timeframes for working with applications, studying documents, notifying clients about loan refusal, etc., in particular:

• loan applications are considered within 5 working days from the date of their receipt;
• document analysis and decision-making are carried out depending on the loan amount in credit organizations for amounts up to 500,000 (five hundred thousand) somoni within two weeks and over 500,000 (five hundred thousand) somoni - within one month from the date of document submission;
• notification of loan refusal is carried out within 3 working days from the date of decision making in the form of notification, as well as via SMS message to the client;
• internal regulatory acts ensure constant communication with the borrower and conduct of checks on the targeted use of the loan.

32. A credit organization establishes in its internal documents the timeframes specified in paragraph 31 of this Instruction, depending on the size of loans provided.
33. Compliance with the process of reviewing a client's loan application is regularly checked by the internal control body in a credit organization, based on the application journal and other internal documents.

5. CONCLUSION OF LOAN CONTRACT

34. Relations between a credit organization and a client regarding loan issuance and repayment are governed by a contract, the legislation of the Republic of Tajikistan and this Instruction.
35. When concluding a loan contract (including in electronic form), all conditions under which the loan is issued are provided, including: type and currency of the loan, amount, term, interest rate, contract conclusion date, issuance procedure, extension and restructuring, collateral (if necessary), issuance and repayment sources, loan repayment procedure in case of its delay or reorganization of legal entities, party details and information on providing the client's credit history to a credit bureau with notification.
36. In accordance with the legislation of the Republic of Tajikistan and using remote identification methods for clients established by law, a loan contract may be concluded in electronic form without the direct participation of the client, subject to paragraph 35 of this Instruction. In this case, a credit organization must have the ability to properly verify the authenticity of submitted documents using information and communication means and technologies.
37. The debt repayment schedule with a detailed description of the procedure and terms of repayment according to standard forms specified in the appendix to this Instruction is developed and approved jointly with the contract and attached to the loan contract. A credit organization may also fulfill this requirement in electronic form.
38. To determine the compliance of a borrower's activity with the submitted business plan and forecast of fund movements, control and adherence to the repayment schedule, a credit organization may request from the borrower other documents related to execution control for loan monitoring purposes.
39. The contract specifically provides and establishes all types of liability for parties and measures taken in case of non-fulfillment of obligations.
40. The number of copies of the concluded contract must be no less than the number of parties concluding it. Each party participating in the contract must receive an original copy of the loan contract signed by all parties in written or electronic form. The loan contract must not contradict the legislation of the Republic of Tajikistan, including regulatory legal acts of the National Bank of Tajikistan.
41. A credit organization is not allowed to unilaterally change the terms of a loan contract, except for cases specified by legislation.
42. The loan amount is provided to the borrower in the currency specified in the loan contract. If necessary, a loan may be provided to the borrower by mutual agreement in another currency based on an additional agreement.
43. A credit organization is prohibited from using part of the principal as a reserve or security deposit.
44. A credit organization may refuse to issue a new loan to a borrower violating the requirements of an existing loan contract.
45. The borrower's loan file notes a brief summary of all meetings and interviews, telephone calls with the borrower, negotiation results and conclusions on inspections, as well as all correspondence related to this loan. A credit organization may implement this requirement also in electronic form.
46. All reports and documents required by this Instruction (paper and electronic without editing capability) are stored in the loan file for at least 5 years after loan repayment. The loan file contains copies of primary documents on loan issuance and their repayment with interest together with statements for these accounts.

6. LOAN COLLATERAL PROCESSING

47. A borrower's obligations may be secured by property. In case of non-repayment of the loan by the borrower, in accordance with the procedure established by law and the contract on pledged property, a credit organization must enforce a claim against the pledged property and direct the proceeds to cover the debtor's unfulfilled obligation.
48. If a loan is issued by a credit organization under pledge, in addition to the loan contract, a pledge agreement is also drawn up and subsequently all relations of the parties related to the pledge are carried out in accordance with legislation, including the laws of the Republic of Tajikistan 'On Mortgage' or 'On Pledge of Movable Property and Registration of Secured Obligations'.
49. A complete inventory of pledged property with indicated value, certificates, licenses and other technical documentation (documents certifying property rights) is attached to the contract. The pledge agreement is executed in accordance with legislation.
50. When issuing a loan under pledge, the specificity of the pledged property is taken into account considering market demand. The most preferred collateral for a credit organization are securities of the Government of the Republic of Tajikistan and securities of the National Bank of Tajikistan, as well as savings. If a loan is issued under such pledge, the credit organization checks that the maturity date of securities and the savings