Regulation No. 110 on Lombard Lending

APPROVED
By the Board of Directors of the National Bank of Tajikistan Protocol No. 43 Dated February 9, 2001

Regulation No. 110 "On Lombard Lending"

1. General Provisions
1. This Regulation defines the basic rules for the provision of a lombard loan by the National Bank of Tajikistan to second-tier banks and its repayment.
2. A lombard loan is a short-term loan provided by the National Bank of Tajikistan to a second-tier bank (hereinafter referred to as "the Bank") for a period of no more than 14 days to meet the need for borrowed funds, secured by state securities in the manner established by this Regulation.
3. The purpose of lombard lending is to provide banks with a mechanism for managing banking liquidity.
4. Lombard loans are provided only to the main offices of banks.

2. Terms of Providing a Lombard Loan
5. A bank has the right to receive a lombard loan if it has state securities in its account at the depository in an amount sufficient to secure the requested lombard loan.
6. To obtain a lombard loan, the Bank submits the following documents to the National Bank of Tajikistan:

• an application for a lombard loan (in the form of Appendix 1);
• a credit agreement signed by the Bank (in the form of Appendix 2);
• a signed instruction for the transfer of securities (in the form of Appendix 3).
  7. The submission of documents in accordance with paragraph 6 is recorded in the journal of applications for lombard loans.
  8. On the day of receiving the lombard loan, the pledged securities of the Bank are transferred from its deposit account to the pledge account of the National Bank of Tajikistan.
  9. If the documents are filled out incorrectly, the National Bank of Tajikistan rejects the Bank's application.
  10. The amount of interest on the requested lombard loan and the total loan amount are determined using the following formula:

I = Lз * i * n / 360
Lk = Lз + I

where Lk is the total loan amount; Lз is the requested amount of the lombard loan; I is the accrued interest for the loan usage period; n is the anticipated loan usage period in days; i is the lombard loan interest rate as a percentage per annum.
11. The collateral for the lombard loan is considered sufficient if the market price of the pledged securities (Pф), divided by the adjustment coefficient (k) of the National Bank of Tajikistan, is greater than or equal to the total lombard loan amount, i.e.,

Pф ≥ Lk * k

where Pф is the actual market price of the pledged state securities; k is the adjustment coefficient.
12. The market price of the pledged securities is taken as the last price on the secondary (primary) market, published in accordance with the rules of securities trading.
13. The adjustment coefficient of the National Bank of Tajikistan (hereinafter referred to as the adjustment coefficient) is equal to 1.2.
The adjustment coefficient is used to compensate for interest rate changes in the secondary market and may vary between 1.1 and 1.2.
14. The lombard loan is issued to the Bank on the next working day after the submission of the application in accordance with the Regulation on the provision of lombard loans.
15. The interest rate for the lombard loan is set equal to the sum of the weighted average interest rate of the last auction for the sale of state securities and 500 additional basis points (5%).
16. The Bank is notified of the amount and interest rate on the day the lombard loan is provided (in the form of Appendix 4).

3. Repayment of Lombard Loan
17. The Bank must repay the lombard loan and its interest within the established term.
18. In the event of timely repayment of the loan amount and the accrued interest, the National Bank of Tajikistan returns to the Bank the state securities accepted as collateral for the lombard loan.
19. The Bank may repay the lombard loan in full or in part early, having previously notified the National Bank of Tajikistan.
20. Interest on lombard loans repaid before the due date is reduced by the number of unused days.
21. In the event of the Bank's failure to fulfill its obligations to repay the lombard loan, the repayment of such debt is satisfied from the proceeds of the pledged securities.
22. In the event that the pledged securities cannot be sold, the National Bank of Tajikistan acquires these securities as property with subsequent sale or redemption.
23. In the event of insufficient funds from the sale or (redemption) of pledged securities, securities in the amount of the shortfall are levied.
24. The proceeds received from the realization of securities held as collateral at the National Bank of Tajikistan, exceeding the amount directed to satisfy the claims of the National Bank of Tajikistan, are returned to the Bank.

Monetary Policy Implementation Department

Appendix 1
Application No. __ for obtaining a lombard loan from the National Bank of Tajikistan

1. Date: “_________” __________________ 200_____g.
2. Bank Name ____________________________________________________________________
3. Correspondent Account No. ______________________________________________________________
4. Contact Phones 1.___________________ 2. ___________________ Fax 3.__________________
5. We request to provide a lombard loan in the amount of ____________________________________ somoni
   __________________________________(in figures) somoni _________________________________ ___(in words).
6. Number of days: _________________ .
7. Start of usage period: “_________” __________________ 200_____g.
8. End of usage period: “_________” __________________ 200_____g.

We request that the amount of this loan be transferred to the above-mentioned correspondent account.

Signatures of authorized bank officials:

1. ____________________________ 2. __________________________
   (First Name, Middle Name, Last Name) (First Name, Middle Name, Last Name) ______________________________ __________________________ (Signature) (Signature) M.P. ______________________________________________________________

To be filled out by the National Bank of Tajikistan
1. Application Registration No. ___________________ 2. Date of application receipt ___________________
3. Responsible for document acceptance: ___________________-
“_____” __________________ 200_____g.
_________________________________(Signature) _________________________________(Signature)

Appendix 2
Credit Agreement No.
Dushanbe “_________” __________________ 200_____g.

The National Bank of Tajikistan, represented by the Chairman of the National Bank of Tajikistan, acting on the basis of the Law of the Republic of Tajikistan "On the National Bank of Tajikistan", on the one hand, and ____________________________________ represented by the Chairman of the Bank ___________________________________________________________ acting on the basis of the Charter, hereinafter referred to as the Borrower, on the other hand, have signed this Agreement.

I. Subject of the Agreement

1. The National Bank of Tajikistan, on the basis of the Regulation "On Lombard Lending", provides the Borrower with a lombard loan on the following terms.
   1.1) Loan amount (in somoni) _______________________________________________ (in figures) 1.2) Loan amount (in somoni)_________________________________________________________ ______________________________________________________________________(in words) 1.3) Date of repayment of the lombard loan: “_____” __________________ 200_____g. 1.4) Repayment amount of the lombard loan ____________________________________(in figures) 1.5) Size of lombard loan interest (annual percentage)

2. The Borrower, to secure the return of the received loan, pledges securities with the following conditions:
   2.1) Issue number __________________________________________________________________ 2.2) Quantity of pledge (pieces) _________________________________________________________

II. Terms of the Credit Agreement
3. The National Bank of Tajikistan undertakes to credit the loan to the Borrower's correspondent account within the next working day after signing this Agreement.
4. The Borrower undertakes to repay the received loan and its interest within the term specified in point 1 of this Agreement.
5. The state securities specified in point 2 of this Agreement are credited to the pledge account of the National Bank of Tajikistan on the day the loan is received.

III. Pledge
6. In the event of non-repayment of the loan and its interest in full within the term established by point 1 of this Agreement, the National Bank of Tajikistan sells the pledged securities at its discretion and repays the loan.

IV. Disputes
7. Disputes arising during the performance of this Agreement are considered in accordance with the current legislation of the Republic of Tajikistan.

V. Other Conditions
8. The Agreement is drawn up in two copies in the Tajik language, which have equal legal force, one copy for each party.

Chairman of the National Bank of Tajikistan

---

Chairman of the Bank

---

Appendix 3
Instruction No. for the transfer of securities

Section 1: Data on the securities being transferred

1. Type of securities: ______________________________ 2. Issue number _______________________
2. Name of the owner of the securities ____________________________________________________
3. Maturity date: “_________” __________________ 200_____g.
4. Owner's deposit account number _______________________________________________________
5. Nominal value: (somoni)
6. Quantity (pieces): ___________________________________________________________________

Securities are transferred due to: sale / pledge / termination of pledge (cross out the unnecessary)

Signatures of authorized officials of the owner

1. ____________________________ 2. _______________________________________________
   (First Name, Middle Name, Last Name) (First Name, Middle Name, Last Name) ___________________________ _______________________________ M.P.

Section 2. Data on the recipient of the securities

1. Full name of the recipient ___________________________________________________
2. Recipient's address _______________________________________________________________

Section 3. To be filled out by the National Bank of Tajikistan
Entries made in the depository
Verified ____________________________________________ Date ________________________________________________ A copy of this transfer instruction has been sent to both participating parties ______________________ (Signature)

This document is drawn up in 3 copies, for: the National Bank of Tajikistan, the owner, and the buyer.

Appendix 4
To the Bank ______________________________________________________________ Notification of the provision of a lombard loan

In accordance with the Regulation "On Lombard Lending", the National Bank of Tajikistan notifies you of the satisfaction of your application dated “_______” __________________ 200_____g. No._____ for obtaining a lombard loan.

1. Loan amount provided to the Bank _____________________________________________________
   (name of the bank)
2. Date of issuance of the lombard loan: “_________” __________________ 200_____g.
3. Date of repayment of the lombard loan: “_________” __________________ 200_____g.
4. Interest rate of the loan: __________________________________________________ somoni
5. Total amount of the lombard loan: ____________________________________________ somoni
6. Size of the loan interest rate: ___________________________________________________
   (annual percentage)

Head of the Department of Monetary Policy Implementation