Policy on Oversight of the Payment System of the Kyrgyz Republic

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Date of creation: 2026-02-12

Appendix

Approved by the Resolution of the Board of the National Bank of the Kyrgyz Republic dated July 15, 2015 No. 38/4

POLICY on Oversight (Oversight) of the Payment System of the Kyrgyz Republic

(As amended by the Resolutions of the Board of the National Bank of the Kyrgyz Republic dated June 8, 2017 No. 2017-P-14/23-13, September 2, 2019 No. 2019-P-14/46-3, February 10, 2021 No. 2021-P-14/6-1, December 7, 2022 No. 2022-P-14/76-6, October 31, 2025 No. 2025-P-14/59-2-(PS), December 19, 2025 No. 2025-P-14/68-3-(NPA), December 26, 2025 No. 2025-P-12/70-6-(PS))

1. General Provisions

2. (Expired in accordance with the Resolution of the Board of the National Bank of the Kyrgyz Republic dated June 8, 2017 No. 2017-P-14/23-13)

3. This Policy on Oversight (Oversight) of the Payment System of the Kyrgyz Republic (hereinafter - Policy) aims to ensure effective and uninterrupted functioning of the payment system through monitoring the operation of payment systems within the territory of the Kyrgyz Republic to maintain stable functioning of the national financial system and confidence in the national currency as a means of cash and non-cash settlement.

(As amended by the Resolution of the Board of the National Bank of the Kyrgyz Republic dated June 8, 2017 No. 2017-P-14/23-13)

3. This Policy defines the objective, principles of conducting oversight (oversight) over the payment system of the Kyrgyz Republic, objects and procedures for conducting oversight by the National Bank of the Kyrgyz Republic (hereinafter - National Bank), as well as a list of tools used for these purposes.

(As amended by the Resolution of the Board of the National Bank of the Kyrgyz Republic dated June 8, 2017 No. 2017-P-14/23-13)

4. (Expired in accordance with the Resolution of the Board of the National Bank of the Kyrgyz Republic dated June 8, 2017 No. 2017-P-14/23-13)

Chapter 2. Terms and Definitions

(Chapter as amended by the Resolution of the Board of the National Bank of the Kyrgyz Republic dated September 2, 2019 No. 2019-P-14/46-3)

For the purposes of this Policy, terms and definitions established by the Constitutional Law of the Kyrgyz Republic "On the National Bank of the Kyrgyz Republic", Laws of the Kyrgyz Republic "On Banks and Banking Activity" and "On the Payment System of the Kyrgyz Republic", and the Regulation "On Non-Cash Settlements in the Kyrgyz Republic" approved by the Resolution of the Board of the National Bank of the Kyrgyz Republic dated December 8, 2021 No. 2021-P-14/68-7-(PS) are used.

The following terms and definitions are also used in this Policy:

New payment systems - systems that are only being created and/or have just begun to operate within the territory of the Kyrgyz Republic and have not yet received a license/registration with the National Bank.

Significant payment system - a system that contributes to maintaining public confidence in the national currency as a means of cash and non-cash payment and settlement, and meets the criteria for significance established by the National Bank.

Other payment systems - payment systems not falling under the categories of systemically important, significant, or national payment systems.

Payment service - a service for accepting payments, transferring funds, and conducting settlements.

Payment infrastructure - the aggregate of equipment, technologies, and procedures for providing access to and operations with payment instruments, as well as for processing, clearing, and settling payments, forming and ensuring the basis of system functioning.

Critical service provider - a legal entity, resident or non-resident of the Kyrgyz Republic, providing services related to information and telecommunications technologies, message exchange, whose operational failures may negatively affect the uninterrupted functioning of systemically important and significant payment systems, potentially causing a "domino effect" for payment systems and banks operating within the territory of the Kyrgyz Republic.

Systemically important payment system - a payment system in which:

1. operational and technical failures may cause serious disruptions in the banking system or the financial system as a whole;
2. the insolvency of one participant may lead to liquidity risks for other participants and payment systems, as well as systemic risk in the financial system as a whole ("domino effect").

Correspondent account system - a system enabling cross-border payments and providing other services to users based on agreements (agency agreements) for maintaining correspondent accounts between financial-credit organizations of different countries.

Efficiently operating payment system - a system whose rules and technical infrastructure promote the development of business activity of users (legal and natural persons) and allow reducing operators' costs, thereby increasing the investment attractiveness of providing payment and settlement services.

(As amended by the Resolutions of the Board of the National Bank of the Kyrgyz Republic dated September 2, 2019 No. 2019-P-14/46-3, December 7, 2022 No. 2022-P-14/76-6)

3. Objective, Tasks, and Principles of Oversight over the Payment System of the Kyrgyz Republic

4. The main objective of conducting oversight (oversight) over the payment system of the Kyrgyz Republic is to ensure stable operation of the country's financial system and reduce the probability of systemic risk ("domino effect") in the payment system, improve efficiency and uninterrupted operation of payment systems, convenience and reliability of payment instruments, protect the interests of payment service consumers, and maintain confidence in the national currency as a means of cash and non-cash settlement.

(As amended by the Resolution of the Board of the National Bank of the Kyrgyz Republic dated September 2, 2019 No. 2019-P-14/46-3)

6. Maintaining stable functioning of the financial system implies meeting user requirements regarding:
   a) payment execution timelines - guaranteeing settlement within the statutory timeframe; b) uninterrupted payments and settlements - guaranteeing payment execution from payer to payee within legally defined timelines and conditions, and refund of funds in case of payment system failure for an amount determined by law; c) accessibility of payment services - providing users with unrestricted access to payment services throughout the user-demanded period, as limited by legislation establishing payment system operating regulations; d) cost of payments and settlements - the fee for executing a payment must correspond to the user-expected level of timeliness, security, accessibility, and service quality.

(As amended by the Resolution of the Board of the National Bank of the Kyrgyz Republic dated September 2, 2019 No. 2019-P-14/46-3)

7. To achieve the oversight objective, the National Bank performs the following tasks:
   a) establishes procedures and monitors the operation of the payment system of the Kyrgyz Republic, including:

• receiving information from payment system operators, organizations providing payment and settlement services, electronic money issuers, critical service providers, and payment system participants;
• analyzing the operation of individual payment systems in accordance with National Bank regulatory legal acts;
  b) influences payment system operators, participants, electronic money issuers to activate their activities in improving the payment system and preventing systemic risk or dishonest practices, including by:
• developing regulatory legal acts defining conditions and procedures for organizing and operating payment systems;
• participating in decision-making by the governing body of the payment system operator.

(As amended by the Resolutions of the Board of the National Bank of the Kyrgyz Republic dated September 2, 2019 No. 2019-P-14/46-3, October 31, 2025 No. 2025-P-14/59-2-(PS))

8. For effective oversight over the payment system of the Kyrgyz Republic, the National Bank follows these principles:

1. Openness and transparency of the oversight policy. The National Bank publicly declares its oversight policy, which includes:

• status and significance criteria for payment systems;
• standards that payment systems must meet organizationally and functionally;
• content of the National Bank's oversight activities.

2. Adherence to international standards. The National Bank bases its requirements for payment systems on provisions of international standards and Kyrgyz Republic legislation regarding payment systems.
3. Correspondence of powers and duties. The National Bank takes measures to maintain sufficient resources, including qualified personnel and an appropriate organizational structure (department) responsible for oversight, enabling effective use of these resources; methods and tools for achieving oversight objectives.
4. Consistency in conducting oversight. When overseeing the payment system, the National Bank does not create competitive advantages for payment systems it manages, due to uniform requirements applied to all payment systems and empowering various National Bank departments with oversight and management powers over their own payment systems. The authorized department coordinates activities of other National Bank departments related to supporting the functioning of its payment systems. The National Bank's oversight activities aim to ensure efficiency of all types of payment systems operating within the Kyrgyz Republic.
5. Coordinated oversight actions and cooperation with other bodies and central banks. The National Bank organizes its oversight duties in a manner compatible with its other payment system tasks. It coordinates activities of other departments to reduce the burden on supervised systems and improve oversight efficiency. The National Bank interacts as necessary with interested executive authorities, Kyrgyz Republic prudential supervision bodies, other countries' central banks, and international financial institutions to enhance oversight effectiveness for international payment systems with participants in the Kyrgyz Republic.
6. Independence of the oversight function evaluation. The National Bank's oversight procedures are audited by external auditors, international financial organizations within financial sector assessment programs, or a specially established body under Kyrgyz legislation. The National Bank also adheres to international joint oversight principles for payment systems.
7. Preventing the use of improperly managed payment systems. The National Bank takes necessary measures (independently and jointly with other countries' central banks) to prevent the use of a payment system or services within it if its operational assessment results are deemed improper.
8. Notification principle. Within cooperation with other countries' central banks regarding oversight (when payment system activities span multiple states), the National Bank informs these central banks, as they may also be interested in proper system construction. This principle applies regardless of the system's significance level.

4. Objects and Content of Oversight over the Payment System of the Kyrgyz Republic

5. Objects of oversight over the payment system of the Kyrgyz Republic are payment systems operating within its territory.

(As amended by the Resolution of the Board of the National Bank of the Kyrgyz Republic dated September 2, 2019 No. 2019-P-14/46-3)

10. The National Bank determines the list of systemically important, significant, and national payment systems and critical service providers in the Kyrgyz Republic based on monitoring of the payment system. The list for publication is determined by the National Bank's Oversight Committee.

(As amended by the Resolutions of the Board of the National Bank of the Kyrgyz Republic dated September 2, 2019 No. 2019-P-14/46-3, December 19, 2025 No. 2025-P-14/68-3-(NPA))

11. The National Bank exercises control over:

• the use of payment instruments;
• the operation of the technical infrastructure of the payment system (SWIFT and MCS service bureaus).

(As amended by the Resolution of the Board of the National Bank of the Kyrgyz Republic dated September 2, 2019 No. 2019-P-14/46-3)

12. The National Bank conducts oversight over the payment system of the Kyrgyz Republic on a continuous basis in the form of a cyclically repeating process across three main areas:
    a) monitoring the operation of payment systems and infrastructure based on collecting and analyzing qualitative and quantitative information; b) assessing the operation of systemically important and significant payment systems for compliance with established standards, including Principles for Financial Market Infrastructures (PFMI) and analyzing the efficiency of individual payment systems. When new payment systems/services emerge, the National Bank analyzes them at the creation stage in accordance with regulatory requirements; c) taking measures aimed at improving payment systems.

(As amended by the Resolution of the Board of the National Bank of the Kyrgyz Republic dated September 2, 2019 No. 2019-P-14/46-3)

5. Status and Significance Criteria of Payment Systems

6. A payment system is recognized as systemically important if at least two of the following criteria apply to it:

• processes not less than 75% of the number and/or volume of payments/transfers;
• in case of financial/non-financial risks or operational/technical failures, capable of causing systemic disruptions ("domino effect") in other participants and payment systems;
• used for settling transactions on financial markets;
• provides final settlement for other payment systems;
• absence of alternative systems for processing similar payment instruments and types of payments/transfers.

(As amended by the Resolutions of the Board of the National Bank of the Kyrgyz Republic dated September 2, 2019 No. 2019-P-14/46-3, February 10, 2021 No. 2021-P-14/6-1)

14. A payment system is recognized as significant if at least one of the following criteria applies:

• processes not less than 35% of the number and/or volume of payments by payment system type over the reporting half-year;
• connected to not less than 50% of commercial banks in the Kyrgyz Republic;
  or both of the following criteria apply:
• coverage of peripheral and agency network is not less than 35% of the total number of peripheral devices and agents in the Kyrgyz Republic over the reporting half-year;
• processes not less than 10% of volume and/or number of all budget payments in the Kyrgyz Republic over the reporting half-year.

(As amended by the Resolution of the Board of the National Bank of the Kyrgyz Republic dated February 10, 2021 No. 2021-P-14/6-1)

15. By status, a payment system is recognized as national if all of the following criteria apply:

• system operator is a resident of the Kyrgyz Republic and its activities are supervised by the National Bank;
• system rules are developed and agreed with participants and the National Bank;
• tariff policy provides tariffs for implementing social projects under state programs, including in the state's interest (pensions, benefits, etc.);
• payment processing occurs within the territory of the Kyrgyz Republic;
• more than 75% of commercial banks in the Kyrgyz Republic are participants;
• risks arising in the system may affect public confidence in payment systems and the national currency as a means of cash and non-cash payment and settlement.

15-1. By status, a legal entity is recognized as a critical service provider if at least two of the following criteria apply:

• processes/routes not less than 25% of the number and/or volume of payments/transfers in national/foreign currency over the reporting half-year;
• covers more than 25% of the total number of peripheral and agency networks in the Kyrgyz Republic;
• interconnectedness with banking system participants - serves more than 50% of commercial banks in the Kyrgyz Republic;
• routes more than 25% of the number and/or volume of transactions of a systemically important or significant payment system.

(As amended by the Resolution of the Board of the National Bank of the Kyrgyz Republic dated February 10, 2021 No. 2021-P-14/6-1)

6. Monitoring of Payment System Operation

7. Monitoring the operation of payment systems involves the oversight body conducting the following activities:
   a) collecting and analyzing regular statistical reporting prepared by operators or participants (if the operator is not a Kyrgyz resident), electronic money issuers, providing quantitative characteristics of payment system operation, including:

• volume and number of daily payments per month;
• number and volume of payments attributable to the five largest participants (concentration ratio);
• payments by currency types, payment instruments, and system types;
• payments by participants/agents;
• incidents, abnormal situations, and unauthorized operations;
• volume and number of payments by payment purpose;
• payments not accepted for processing with reasons indicated;
• other data;
  b) periodic (at least once every 3 years) collection of qualitative characteristics information based on significance level, by requesting results from operators of systemically important and significant payment systems regarding self-assessment compliance with established standards and National Bank requirements (Appendix 2), specifying at least the following information:
• system name;
• information on system owners, operator, clearing/processing and settlement centers;
• structure of regulatory and contractual framework;
• access criteria for participation, participant requirements, suspension/termination procedures;
• current list of participants;
• number of accounts opened by participants (by currency);
• organizational management structure;
• operational principles, clearing/settlement procedures, interaction regulations;
• information on clearing and settlement procedures;
• provisions on liability distribution between operator and participants;
• tariff setting principles;
• business continuity principles;
  c) conducting meetings and discussions with operator management, payment system participants, critical service providers to discuss current state; d) multilateral negotiations, including group negotiations and participation in committees/councils; e) access to operator self-assessment materials on compliance with legislation and established standards; f) access to official system documentation (system rules, agreements/participant documents related to operation, business plan, business continuity plan); g) access to inspection results regarding supervised organizations as operators/participants and critical service providers/electronic money issuers; h) access, established by National Bank regulatory acts, to conclusions of external and internal auditors verifying operator/participant/critical service provider/electronic money issuer activities; i) expert on-site checks verifying compliance of payment system operation with official documentation; j) monitoring media information on payment system operation; k) information from other regulatory bodies; l) other information necessary for the National Bank to monitor system operation.

(As amended by the Resolutions of the Board of the National Bank of the Kyrgyz Republic dated September 2, 2019 No. 2019-P-14/46-3, February 10, 2021 No. 2021-P-14/6-1)

16-1. Monitoring also involves collecting information on emerging new products/systems, and analyzing their data for risks and compliance with Kyrgyz legislation. Payment system participants must inform the National Bank in advance during existing system improvement and new product/system implementation, providing detailed information on expected changes/additions or the developed product/system. If there are comments on the product/system, the National Bank sends its comments/recommendations to the participant within 30 calendar days.

(As amended by the Resolutions of the Board of the National Bank of the Kyrgyz Republic dated February 10, 2021 No. 2021-P-14/6-1, October 31, 2025 No. 2025-P-14/59-2-(PS))

16-2. Payment system participants must identify and assess all possible risks related to a product, service, operation, technology, or business practice before implementing new types thereof, and take corresponding risk minimization measures, including anti-money laundering (AML) and counter-terrorist financing (CFT) measures.

(As amended by the Resolution of the Board of the National Bank of the Kyrgyz Republic dated December 26, 2025 No. 2025-P-12/70-6-(PS))

7. Assessment and Decision-Making Regarding Payment Systems

8. The National Bank conducts an assessment of compliance with Kyrgyz legislation, National Bank recommendations, and international standards regarding payment systems for systemically important and significant payment systems.

(As amended by the Resolution of the Board of the National Bank of the Kyrgyz Republic dated February 10, 2021 No. 2021-P-14/6-1)

17-1. The operation of critical service providers is assessed for compliance with the standards specified in Appendix 3 to this Policy. The assessment may be conducted by the critical service provider with subsequent