On Amendments to Certain Regulatory Legal Acts of the National Bank of the Kyrgyz Republic

RESOLUTION OF THE BOARD OF THE NATIONAL BANK OF THE KYRGYZ REPUBLIC dated December 29, 2021 No. 2021-P-12/75-3-(NPA)

On Amendments to Certain Regulatory Legal Acts of the National Bank of the Kyrgyz Republic

In accordance with Articles 20 and 68 of the Law of the Kyrgyz Republic "On the National Bank of the Kyrgyz Republic, Banks and Banking Activities", the Board of the National Bank of the Kyrgyz Republic resolves:

1. To amend the resolutions of the Board of the National Bank of the Kyrgyz Republic (attached):

• "On Approval of the "Procedure for Granting Non-Accrual Interest Income Status" dated April 28, 2004 No. 11/2;

• "On Certain Regulatory Legal Acts of the National Bank of the Kyrgyz Republic" dated August 25, 2005 No. 26/5;

• "On Approval of the Regulation "On the Periodic Regulatory Report of Banks Operating in Accordance with Islamic Banking and Finance Principles" dated March 30, 2011 No. 20/4.

2. This resolution shall enter into force on January 1, 2023.

3. To the Legal Department:

• to publish this resolution on the official website of the National Bank of the Kyrgyz Republic;

• after official publication, to send this resolution to the Ministry of Justice of the Kyrgyz Republic for inclusion in the State Register of Regulatory Legal Acts of the Kyrgyz Republic.

4. To the Department of Supervision Methodology and Bank Licensing to bring this resolution to the attention of commercial banks, the Association of Banks of Kyrgyzstan, relevant structural divisions, regional departments, and the representative office of the National Bank of the Kyrgyz Republic in Batken region.

5. To entrust control over the execution of this resolution to the member of the Board of the National Bank of the Kyrgyz Republic overseeing the Department of Supervision Methodology and Bank Licensing.

Chairman
K. Bokontaev

Appendix to the Resolution of the Board of the National Bank of the Kyrgyz Republic dated December 29, 2021 No. 2021-P-12/75-3-(NPA)

Amendments to Certain Regulatory Legal Acts of the National Bank of the Kyrgyz Republic

1. To introduce the following amendments to the Resolution of the Board of the National Bank of the Kyrgyz Republic "On Approval of the Procedure for Granting Non-Accrual Interest Income Status" dated April 28, 2004 No. 11/2:

in the Procedure for Granting Non-Accrual Interest Income Status, approved by the aforementioned resolution:

• to supplement paragraph 1.1. with a second subparagraph as follows:

"For credit organizations carrying out operations based on Islamic finance principles, including through an "Islamic window", the provisions of this Procedure apply to the accrual of mark-up/income on Murabaha and Ijarah Muntahiyah Bittamlik operations, taking into account the special terminology used by them in carrying out banking operations.";

• to supplement paragraph 1.2. with a second subparagraph as follows:

"For credit organizations carrying out operations based on Islamic finance principles, including through an "Islamic window", interest means mark-up/income on Murabaha and Ijarah Muntahiyah Bittamlik operations.".

2. To introduce the following amendments to the Resolution of the Board of the National Bank of the Kyrgyz Republic "On Certain Regulatory Legal Acts of the National Bank of the Kyrgyz Republic" dated August 25, 2005 No. 26/5:

in the Regulation "On the Periodic Regulatory Bank Report", approved by the aforementioned resolution:

• in sub-section "Z. Report on Operations Conducted by the Bank within the "Islamic Window"" of Section 1 "Balance Sheet" of Appendix 2, part "G. Breakdown of Other Assets and Other Liabilities" shall be set out as follows:

"
---
G. Breakdown of Other Assets and Other Liabilities
1. Other assets
a) remuneration accrued to be received by the bank
b) Murabaha mark-up
c) prepayment made
d) unidentified debit amounts
e) precious metals
f) other other assets
2. Special RPPPU for other assets,
including special RPPPU for Murabaha mark-up
3. Net other assets
4. Other liabilities
a) remuneration accrued to be paid to clients
b) deferred profit on Murabaha
c) taxes payable
d) unidentified accounts payable
e) other other liabilities

".

3. To introduce the following amendments to the Resolution of the Board of the National Bank of the Kyrgyz Republic "On Approval of the Regulation "On the Periodic Regulatory Report of Banks Operating in Accordance with Islamic Banking and Finance Principles" dated March 30, 2011 No. 20/4:

in the Regulation "On the Periodic Regulatory Report of Banks Operating in Accordance with Islamic Banking and Finance Principles", approved by the aforementioned resolution:

• sub-section D. "Breakdown of Other Assets and Other Liabilities of the Bank" of Section 1.A. "Balance Sheet" of Appendix 2 shall be set out as follows:

"D. Breakdown of Other Assets and Other Liabilities of the Bank

(thousand KGS)

Item Name
1. Other assets
a) remuneration accrued to be received by the bank
b) Murabaha mark-up
c) prepayment made
d) unidentified debit amounts
e) precious metals
f) other other assets
2. Special RPPPU for other assets,
including special RPPPU for Murabaha mark-up
3. Net other assets
4. Other liabilities
a) remuneration accrued to be paid to clients
b) deferred profit on Murabaha
c) taxes payable
d) unidentified accounts payable
e) dividends payable
f) other other liabilities

".