Regulation on Bank Payment Cards in the Kyrgyz Republic

| ||| --- | --- || Approved by the Resolution of the Board of the National Bank of the Kyrgyz Republic dated October 14, 2009 No. 41/7 |REGULATIONon Bank Payment Cards in the Kyrgyz Republic(As amended by Resolutions of the Board of the National Bank of the Kyrgyz Republic dated November 30, 2011 No. 67/11, September 25, 2013 No. 35/19)## 1. General Provisions1.1. This Regulation has been developed in accordance with:- Laws of the Kyrgyz Republic "On the National Bank of the Kyrgyz Republic", "On Banks and Banking Activities in the Kyrgyz Republic", "On Electronic Payments", "On Electronic Digital Signature", "On Counteracting the Financing of Terrorism and Legalization (Laundering) of Criminal Proceeds";- Regulation "On Non-Cash Settlements in the Kyrgyz Republic", approved by the Resolution of the Government of the Kyrgyz Republic and the National Bank of the Kyrgyz Republic dated September 9, 2005 No. 420/21/4;- "Policy on Risk Management in the Payment System of the Kyrgyz Republic", approved by the Resolution of the Board of the National Bank of the Kyrgyz Republic dated May 19, 2005 No. 16/4, registered with the Ministry of Justice of the Kyrgyz Republic on June 27, 2005 (registration number No. 91-05);- "Policy on Supervision of the Payment System of the Kyrgyz Republic", approved by the Resolution of the Board of the National Bank of the Kyrgyz Republic dated March 23, 2006 No. 7/8, registered with the Ministry of Justice of the Kyrgyz Republic on April 28, 2006 (registration number No. 48-06);- "Rules for Supervising the Payment System of the Kyrgyz Republic", approved by the Resolution of the Board of the National Bank of the Kyrgyz Republic dated May 28, 2008 No. 22/11, registered with the Ministry of Justice of the Kyrgyz Republic on July 4, 2008 (registration number No. 67-08);- Regulation "On the Main Requirements for the Functioning of the Payment System of the Kyrgyz Republic in Case of Emergency Situations in the Payment System", approved by the Resolution of the Board of the National Bank of the Kyrgyz Republic dated January 28, 2009 No. 4/6, registered with the Ministry of Justice of the Kyrgyz Republic on March 4, 2009 (registration number No. 26-09);- "Temporary Instruction on Working with Deposits", approved by the Resolution of the Board of the National Bank of the Kyrgyz Republic dated February 19, 2003 No. 4/4, registered with the Ministry of Justice of the Kyrgyz Republic on March 25, 2003 (registration number No. 25-03);- Regulation "On the Periodic Regulatory Bank Report", approved by the Resolution of the Board of the National Bank of the Kyrgyz Republic dated August 25, 2005 No. 26/5, registered with the Ministry of Justice of the Kyrgyz Republic on September 16, 2005 (registration number No. 132-05);- "Chart of Accounts for Accounting in Commercial Banks and Other Financial and Credit Institutions of the Kyrgyz Republic", approved by the Resolution of the Board of the National Bank of the Kyrgyz Republic dated May
30, 2007 No. 28/3, registered with the Ministry of Justice of the Kyrgyz Republic on July 10, 2007 (registration number No. 66-07).1.2. This Regulation defines the procedure for the issuance, acquiring, and distribution of bank payment cards, the rules for commercial banks of the Kyrgyz Republic (hereinafter - banks) to conduct operations using bank payment cards, the processing of transactions made using bank payment cards, as well as general requirements for banks as participants in card settlement systems that are created or operate on the territory of the Kyrgyz Republic.(As amended by Resolution of the Board of the National Bank of the Kyrgyz Republic dated November 30, 2011 No. 67/11)1.3. The provisions of this Regulation also apply to the activities of banks of the Kyrgyz Republic for the issuance, acquiring, and distribution of prepaid cards in the equivalent of electronic money within bank payment card settlement systems.1.4. The provisions of this Regulation do not apply to the activities of legal entities that are not financial and credit institutions, for issuing prepaid payment cards to clients in the equivalent of electronic money (telephone, discount, and other) for settlements only for goods belonging to these legal entities, or services provided by them within the limits of the pre-paid amount, as well as for settlements in favor of third parties. This activity is regulated by the Regulation "On Licensing Activities for Providing Payment Services Using Electronic Money in the Form of Prepaid Cards", approved by the Resolution of the Board of the National Bank of the Kyrgyz Republic dated July 25, 2007 No. 36/6 and registered with the Ministry of Justice of the Kyrgyz Republic on August 27, 2007, registration number 81-07.1.5. All relationships of participants in the card settlement system not stipulated by this Regulation, their responsibilities, rights, and obligations are established by relevant agreements or contracts.## 2. Definitions2.1. The following terms and definitions are used in this Regulation:Authorization - a procedure for the issuer to confirm the cardholder's authority or authorship to conduct an operation using a bank payment card (transaction), as a result of which the issuer's obligation to the acquirer arises to execute a settlement document drawn up using the aforementioned issuer's card. Authorization can be automated (via terminal) and voice (via telephone communication). If, for an operation performed using a bank payment card, the issuer and the acquirer are the same person, then authorization is a permission granted by the issuer to the client to perform this operation.Authorization Request - a request to the issuer to obtain authorization.Automated Self-Service Terminal (cash-in) - a terminal designed for depositing cash by bank clients, cardholders, service users, including making payments in cash and non-cash form to utility services, mobile operators, internet, and other payments.Bank Payment Card
(card) - a payment instrument that allows its holder to conduct operations for purchasing goods, services, receiving cash in national and foreign currencies, through terminals or other devices, and a means of access to a bank account for its holder to manage funds in a bank account opened with the issuer, in accordance with the legislation of the Kyrgyz Republic and the agreement between the cardholder and the issuer. Card operations are performed by the cardholder within the balance of their own funds available in the bank account (debit), or a loan provided by the issuer in accordance with the bank account agreement in case of insufficient or no funds in the bank account (overdraft, credit). The card is the property of the issuer and is provided for use to the cardholder in accordance with the terms of the agreement.Bank Account (hereinafter - account) - a method of reflecting contractual relations between a bank and a client for accepting a deposit (bank contribution) and/or issuing a loan, as well as for the bank to perform operations related to providing banking services to the client, as provided for by the bank account service agreement, the legislation of the Kyrgyz Republic, and business customs applied in banking practice.ATM - a hardware and software complex for issuing and accepting cash, recording funds on a card, obtaining information on transactions performed by the cardholder, making non-cash payments, and issuing a card receipt for all types of transactions performed. An ATM is intended for the cardholder to independently perform operations using the card without the participation of an authorized employee of a commercial bank.Account Holder - a natural or legal person, individual entrepreneur, who has concluded a bank account agreement in accordance with the legislation of the Kyrgyz Republic.Cardholder - a bank client, a natural person, including a person authorized by a legal entity - the account holder, who has the right to perform operations using the card based on an agreement with the issuer.Unified Interbank Processing Center (UIPC) - a hardware and software complex of the national payment system of the Kyrgyz Republic "Elkart", designed for processing transactions made using "Elkart" bank payment cards, as well as cards of other systems integrated with the UIPC system.Imprinter - a mechanical device designed to confirm transactions by transferring an imprint of the embossed card details and trade and service enterprise details onto a paper medium (slip).Card Receipt - a paper document generated by a terminal, ATM, or other device when conducting a transaction using a card, which serves as the basis for settlements for the transaction and confirms its completion. To reduce the risk of fraud, a card receipt should not explicitly contain all information about the card number and may contain partial information about the cardholder's card number in accordance with the system's security rules.Local Payment System - a
settlement system using local cards issued by one (single-issuer) or several (multi-issuer) issuers on the territory of the Kyrgyz Republic. Local system cards can be serviced in ATMs and terminals of the national payment system according to the terms of the agreement between participants and systems.Real-Time Interbank Gross Settlement System - a type of payment system in which transfers are made for monetary obligations of financial market participants (national money, foreign exchange markets, and capital and securities markets), as well as transfers related to the application of monetary policy instruments.International Payment System - a settlement system using international cards, issued and serviced in accordance with the requirements of the operators of these systems and the legislation of the Kyrgyz Republic. The system establishes specific rules for clearing settlements for transactions between system participants with appropriate currency conversion.National Card - an "Elkart" system card issued by any issuer - a resident of the Kyrgyz Republic who has concluded a corresponding agreement with the operator of the national payment system.National Payment System for Bank Payment Card Settlements - a settlement system for operations using national cards of the "Elkart" system, functioning on the basis of the hardware and software complex of the Unified Interbank Processing Center. The operator of the national payment system is the Closed Joint Stock Company "Interbank Processing Center".Overdraft - a form of short-term credit, the provision of which allows the client to make payments exceeding the amount available in the client's account, within the amounts and on the terms defined by the agreement between the issuer and the cardholder.Peripheral Devices - terminals, ATMs, automated self-service terminals, and other devices that constitute the technical infrastructure for accepting and servicing bank payment cards.Personalization - the procedure of applying to the card and (or) recording in the memory of the microprocessor and (or) on the magnetic stripe of the card identification information provided for by the regulations and operating procedures of the respective card settlement payment system.Personal Identification Number (PIN-code) - a password for accessing the card, allowing a transaction to be performed.Prepaid Card - within the framework of this regulation - electronic money in the form of a prepaid card, which is intended for its holder to perform operations for purchasing goods/services from a large number of acceptors, organizations that accept payment using a prepaid card through electronic network devices and communications within the limits of the pre-paid amount. The card certifies the cardholder's right of claim against the issuer for its obligations.Processing - activity that includes the collection, processing, and distribution to settlement participants of information on transactions made using cards, as well as the
performance of other functions provided for by relevant agreements between participants of the card settlement system.Processing Center - a legal entity that performs processing.Cash Acceptance and/or Issuance Point (CAIP) - a suitably equipped place (premises) for performing operations for issuing and/or accepting cash, conducting settlements, including those using bank payment cards.Settlement Agent - an organization that ensures final settlements between participants of the card settlement system.Card Settlement System (Payment System for Bank Payment Card Settlements) - a set of norms, standards, rules, institutions, and software and hardware for organizing settlements using cards. Payment systems are divided into local, national, and international.Slip - a paper document serving as confirmation of a transaction made using a card. The slip must contain an imprint of the embossed card details, produced using an imprinter installed in the trade and service enterprise, as well as the signatures of the cardholder and the TSE cashier. In case of voice authorization, the slip must also contain the authorization code received by phone.Stop-list - a list of cards prohibited by the issuer from being accepted for payment for goods or services and for cash acceptance or issuance, including currency exchange.Terminal for Accepting Bank Payment Cards (terminal) - an electronic device that allows reading information from a card, forming, sending, and receiving messages about card operations to (from) the respective payment system.Trade and Service Enterprise (TSE) - a legal entity or individual entrepreneur that, in accordance with an agreement concluded with the acquirer, accepts cards for payment for goods or services with the preparation of documents confirming the performance of card operations.Transaction - an operation using a card (e.g., when purchasing goods, services, exchanging currency, or receiving cash), as a result of which the balance of funds in the cardholder's account changes.Participants of the Card Settlement System - issuer, cardholder, acquirer, TSE, processing center, and settlement agent.Chargeback - a return or claim payment, the issuer's refusal to make a payment for a transaction conducted in violation of payment system rules (disputed transaction). A chargeback is carried out within the established regulatory period by debiting the acquirer's account for the amount of the disputed transaction with the preparation of documents required by the rules of the respective payment system.Acquirer - a commercial bank that has received permission to carry out acquiring, the owner of a network of peripheral devices, ensuring the possibility of conducting authorization or transactions through its peripheral devices in accordance with the technology and regulatory acts of the respective payment systems and the legislation of the Kyrgyz Republic.Acquiring - the activity of a commercial bank, including contractual relations with TSEs for the
installation of peripheral devices and the acceptance of cards as a means of payment for sold goods, works, services, ensuring settlements with TSEs and/or issuing cash to cardholders.Electronic Money - monetary value stored electronically on a software and hardware device (card-based or network electronic money), accepted as a means of payment for goods/services of organizations other than the issuer, with or without the direct participation of a bank in the transaction, but as a prepaid instrument, and expressing the sum of the issuer's obligations to the holder for the redemption of electronic money.Card Issuance - the activity of a commercial bank to issue cards.Issuer - a commercial bank that issues cards/prepaid cards in accordance with the technology and regulatory acts of the respective payment systems and the legislation of the Kyrgyz Republic.## 3. Procedure for Making Payments Using Cards3.1. A card is manufactured on the basis of a plastic blank, the technical characteristics of which comply with the requirements, regulations, and operating procedures of the payment system approved by the payment system operator. The card blank must contain a special device, an information carrier (magnetic stripe, microprocessor (integrated circuit), and others) for card personalization and storing the functional characteristics of the card of the respective payment system.3.2. Depending on the regulations and operating procedures of the payment system and the type of settlement scheme, a card is divided into a debit card, a debit card with overdraft (debit-credit), and a credit card.3.3. Depending on the currency of the bank account, the card provides the ability to conduct currency exchange operations between the cardholder and the issuer in accordance with the regulations and operating procedures of the system when making non-cash settlements and receiving cash both on the territory of the Kyrgyz Republic and abroad.(As amended by Resolution of the Board of the National Bank of the Kyrgyz Republic dated November 30, 2011 No. 67/11)3.4. A card is individual (personal) if the cardholder, a natural person, is the account holder based on a bank account agreement and/or a credit agreement concluded between the cardholder and the issuer. Any operations for crediting and debiting funds using an individual card are carried out from the cardholder's bank account.(As amended by Resolution of the Board of the National Bank of the Kyrgyz Republic dated November 30, 2011 No. 67/11)3.5. A card is corporate if the cardholder, a natural person, performs operations using the card in accordance with the powers granted to him by the legal entity, the account holder. Operations for debiting funds are carried out from the corporate account of that legal entity.3.6. A card is primary if its holder is the bank account holder.(As amended by Resolution of the Board of the National Bank of the Kyrgyz Republic dated November 30, 2011 No. 67/11)3.7. A card is additional if
the bank account holder authorizes a trusted person to conduct operations on his bank account within the amounts and on the terms established in the agreement between the issuer and the bank account holder.(As amended by Resolution of the Board of the National Bank of the Kyrgyz Republic dated November 30, 2011 No. 67/11)3.8. A card must contain mandatory details on the card surface or determined by a special device, unambiguously identifying the system servicing the card, the name and details of the issuer, the card number, the cardholder's surname and name, the company name (for cards linked to legal entities' accounts), the card's validity period, unless otherwise provided by the requirements of the respective payment system. The requirements of this paragraph do not apply to closed single-issuer intra-bank systems.3.9. A card issued in the form of a prepaid card represents one of the forms of electronic money. A prepaid card is not personalized, but the card must contain its unique card number, and upon its issuance, the issuer must identify the holder in its internal automated system. A prepaid card is intended for its holder to perform operations for purchasing goods/services through electronic network devices and communications within the limits of the pre-paid amount. When issuing and using prepaid cards, the restrictions established in Appendix 4 to this Regulation must be observed. The card certifies the cardholder's right of claim against the issuer for its obligations.(As amended by Resolution of the Board of the National Bank of the Kyrgyz Republic dated September 25, 2013 No. 35/19)3.10. Replenishment of the cardholder's bank account can be carried out with cash and non-cash funds, as well as using banking operations in accordance with the concluded contractual relations between the issuer and the account holder.(As amended by Resolution of the Board of the National Bank of the Kyrgyz Republic dated November 30, 2011 No. 67/11)3.11. The cardholder, in accordance with the agreement concluded with the issuer, can pay for purchased goods and services at a TSE using the card, receive cash at an ATM or CAIP, and also make bank transfers of funds from their bank account to any other account in accordance with the legislation of the Kyrgyz Republic.3.12. A TSE accepts cards for payment for goods and services and exchanges information with the acquirer on payments made through peripheral devices installed at the TSE, after mandatory electronic authorization, or after voice authorization (by phone/fax machine), if an imprinter is installed. For cards with a microprocessor, electronic authorization can be carried out without a direct connection to the issuing bank's system.3.13. A payment made by a cardholder through peripheral devices is an electronic payment document and is confirmed by a card receipt containing the following mandatory details:1) document number, day, month, and year of issue;2) name (code) of the retail outlet or
acquirer;3) payment amount;4) payment currency;5) authorization code;6) commission or discount amount (if any);7) payment card details in accordance with payment system security rules.A card receipt may contain additional details if provided for by the regulations and operating procedures of the respective payment systems.

3.14. If an imprinter is installed at a merchant, the fact of the transaction must be confirmed by three copies of the slip for the transaction amount. The first copy of the slip with the signatures of the cardholder and the authorized employee of the merchant is transferred to the acquirer, the second remains at the point of sale, and the third is issued to the cardholder.

3.15. Payments made using cards are considered confirmed and final (unconditional and irrevocable) from the moment processing is completed in the relevant system and final settlements are made on the accounts of the issuer and the acquirer.

3.16. If a payment is recognized as erroneous or fraudulent after final settlements have been made, the system must provide for a separate procedure for resolving such payments and returning funds. The terms for resolving disputes between the issuer and the cardholder on such transactions must be established in the agreement between them, as well as in the regulations and operating procedures of the relevant system. Resolution of disputes between the cardholder and the merchant is carried out on the basis of the legislation of the Kyrgyz Republic and is not part of regulation by the rules and agreements of the system.

3.17. A cardholder may dispute a transaction conducted using a card by submitting a corresponding application to the issuer in accordance with the agreement. The issuer considers the possibility of filing a chargeback in accordance with the regulations and operating procedures of the relevant payment system. If the regulations and operating procedures of the relevant payment system contain restrictions on the time limit for filing a chargeback of a certain type, then if the cardholder submits an application for a chargeback after this time limit expires, the application is not considered.

4. Requirements for the Issuer

4.1. A bank may become an issuer and carry out the issuance and distribution of cards only if it has the right to carry out settlements on behalf of clients and correspondent banks and their cash servicing, as well as to issue, purchase, pay, accept, store and confirm payment documents, including credit and payment cards. The bank must conclude an agreement with the relevant payment system and its operator on participation in the system and obtain permission from the payment system to perform this operation (except for single-issuer intra-bank systems).

(As amended by Resolution of the Board of the National Bank of the Kyrgyz Republic of 30 November 2011 No. 67/11)

4.2. A bank that begins or terminates the issuance of cards of the relevant payment system shall notify the National Bank of the Kyrgyz Republic in the established form (Annex 1 to this Regulation) no less than one month before the actual start or termination of card issuance. A bank terminating card issuance must also inform the operator and its clients, cardholders, in accordance with the terms of the agreements between them.

4.3. The bank independently determines the type of cards issued (local, national, international), the list of services using these cards and the conditions for their provision to clients on the basis of the regulations and operating procedures of the relevant payment system.

4.4. A bank may issue cards having various settlement schemes (programs): debit, debit-credit and credit.

4.5. A bank issuing cards with settlement schemes providing the possibility of obtaining a loan or overdraft must have a license from the National Bank of the Kyrgyz Republic for the right to provide loans and conduct credit operations. Credit operations are carried out in accordance with the legislation of the Kyrgyz Republic and the bank's internal credit policy.

4.6. A bank issuing cards is obliged to comply with the requirements on countering money laundering and terrorist financing in accordance with the legislation of the Kyrgyz Republic.

4.7. A bank may issue cards allowing their holders to participate in various non-financial programs by carrying out operations with conventional units of account (liters, kilograms, pieces and others) or in systems for the provision and accounting of certain services (benefits, discounts, bonuses and other services). These non-financial programs may be implemented with the participation of third parties on the basis of an agreement concluded with the issuer and in accordance with the legislation of the Kyrgyz Republic. This provision does not apply to conventional units of account that are or may be considered electronic money, except for electronic money in the form of prepaid cards. For non-financial programs, the use by the issuer of conventional units of account as electronic money is prohibited.

5. Procedure for Issuing Bank Payment Cards

5.1. The issuer carries out the issuance and delivery of cards to the cardholder on the basis of the corresponding application of the account holder and the bank account agreement concluded with the account holder. Any bank payment card is the property of the issuer, is transferred to the cardholder for use and must be withdrawn by the issuer upon expiration of the card's validity period or closure of the client's bank account.

Re-issuance of bank payment cards is carried out by the issuer only on the basis of an application of the bank account holder.

(As amended by Resolution of the Board of the National Bank of the Kyrgyz Republic of 30 November 2011 No. 67/11)

5.2. When concluding an agreement, the issuer is obliged to identify the cardholder in accordance with the rules applied when opening a bank account on the "know your client" principle in accordance with the legislation of the Kyrgyz Republic.

5.3. The issuer is obliged, at the moment of signing the application for card issuance, to familiarize the cardholder with the terms of the agreement, the rules for using the card and the tariffs for the services provided. The rules for using the card may be included in the agreement or attached to it.

5.4. When issuing a card, the following mandatory conditions for the provision of card services are reflected in the bank account agreement:

1) personal data of the account holder (surname, name, patronymic, passport data (or other documents proving identity in accordance with the legislation of the Kyrgyz Republic) and other personal data of the account holder allowing unambiguous identification);

2) personal data of the cardholder (surname, name, patronymic, passport data (or data of another document proving identity in accordance with the legislation of the Kyrgyz Republic) and other personal data of the cardholder allowing unambiguous identification);

3) rights, obligations and liability of the cardholder and the issuer for card transactions;

4) types and amounts of commissions payable by the cardholder;

5) frequency (at least once a month) and methods of providing by the issuer of statements on the movement of funds and the balance on the bank account;

6) basic requirements for the cardholder to observe security (use of PIN code, limits, actions of the cardholder in case of loss and theft of the card);

7) procedure for informing the issuer about the fact of loss, theft or use of the card by an unauthorized person;

8) distribution of liability between the parties in case of loss, theft or use of the card by an unauthorized person;

9) conditions for blocking and withdrawal of the card by the issuer;

10) distribution of risks and liability between the parties in case of violation of security procedures or other terms of the agreement;

11) procedure for considering disputes;

12) procedure for terminating the agreement and canceling the card.

The agreement may provide for other conditions.

5.5. The issuer has the right to issue an additional card on the basis of an agreement concluded between the issuer and the account holder, and an application of the account holder. The conditions for the use of a bank payment card by the holder of an additional card are established by the issuer in accordance with the bank account agreement concluded between the issuer and the account holder, and on the basis of the account holder's application to grant a trusted person the right to dispose of his account by means of an additional card. The issuer is obliged to identify the holders of additional cards in accordance with the rules applied when opening a bank account in accordance with the legislation of the Kyrgyz Republic.

5.6. When issuing a debit-credit or credit card, the issuer has the right to conclude a mixed agreement or a separate additional agreement, which stipulates the possibility of obtaining a loan or overdraft by the cardholder, the procedure and terms for their provision, the amount of the commission charged and other conditions in accordance with the legislation of the Kyrgyz Republic.

5.7. The issuer carries out the issuance of cards of international payment systems to cardholders on the basis of an agreement on participation in the international payment system and an agreement with the system operator in accordance with the regulations and operating procedures of the system that do not contradict the legislation of the Kyrgyz Republic. The issuer of international cards must comply with the requirements on countering money laundering and terrorist financing in accordance with the legislation of the Kyrgyz Republic.

5.8. The issuer keeps accounting records of card transactions by crediting or debiting funds on the bank account on the basis of transactions conducted by the cardholder in accordance with the legislation of the Kyrgyz Republic and banking accounting rules. Debiting funds from the account may be carried out both within the balance on the bank account and at the expense of a loan or overdraft provided by the issuer in accordance with the terms of the agreement.

(As amended by Resolution of the Board of the National Bank of the Kyrgyz Republic of 30 November 2011 No. 67/11)

5.9. If the bank account of the cardholder is maintained in another currency, the debiting and crediting of funds is carried out after conversion into the currency of this account in accordance with the internal regulations and operating procedures of the relevant system and/or agreements concluded between the issuer and the account holder.

(As amended by Resolution of the Board of the National Bank of the Kyrgyz Republic of 30 November 2011 No. 67/11)

5.10. The issuer must provide the cardholder with statements on the movement of funds and the balance on the bank account of the cardholder/account holder. The terms and methods of providing statements, as well as additional information on transactions of cardholders, are established by the regulations and operating procedures of the relevant card system and the terms of the agreement concluded with the issuer.

(As amended by Resolution of the Board of the National Bank of the Kyrgyz Republic of 30 November 2011 No. 67/11)

6. Procedure for Issuing and Distributing Prepaid Cards

6.1. The issuer of prepaid cards in the equivalent of electronic money independently determines the form of contractual relations with cardholders wishing to purchase prepaid cards in the equivalent of electronic money for making payments or subsequent distribution, the parameters of their identification, the procedure for providing cards, the conditions of use and functional capabilities of cards in accordance with the legislation of the Kyrgyz Republic. The rules and procedure for making payments using prepaid cards must be included in the agreement or attached to it. The issuer has the right to place information at the places of servicing prepaid cards.

(As amended by Resolution of the Board of the National Bank of the Kyrgyz Republic of 25 September 2013 No. 35/19)

6.2. The issuer carries out the issuance of prepaid cards in the equivalent of electronic money of the relevant payment systems in accordance with the legislation of the Kyrgyz Republic and the established regulations and operating procedures of the systems.

6.3. The issuer of prepaid cards in the equivalent of electronic money may conclude agreements (agency agreement) with non-bank financial and credit institutions or with legal entities that are not financial and credit institutions, for the distribution and acquiring of prepaid cards in the equivalent of electronic money to the population for making payments for goods and services in accordance with the legislation of the Kyrgyz Republic. In this case, liability for the fulfillment of obligations on electronic money rests with the issuer.

6.4. The amount (sum) of funds on one prepaid card in the equivalent of electronic money must not exceed the amount in national currency or its equivalent in foreign currency specified in paragraph 1 of Annex 4 to this Regulation. Banks are obliged to issue prepaid cards strictly for their intended purpose in accordance with this Regulation and in accordance with the restrictions specified in paragraphs 4 and 5 of Annex 4 to this Regulation.

(As amended by Resolution of the Board of the National Bank of the Kyrgyz Republic of 25 September 2013 No. 35/19)

6.5. The issuer may establish restrictions on the performance of certain types of payments using prepaid cards in the equivalent of electronic money.

6.6. The issuer of prepaid cards in the equivalent of electronic money assumes an unconditional and irrevocable obligation to redeem electronic money to cardholders by exchanging electronic money for cash or non-cash funds equal to the balance of the amount of electronic money stored on the prepaid card. The cardholder presents prepaid cards in the equivalent of electronic money to the issuer or its distribution agent for their redemption. To reduce risks and ensure timely redemption of presented prepaid cards, the issuer is obliged to form a reserve for possible risks and losses.

6.7. The issuer determines the list of services using prepaid cards in the equivalent of electronic money on the basis of agreements concluded with organizations on accepting electronic money to secure payment for goods and services of these organizations. The methods and terms for making mutual settlements between the issuer and these organizations arising as a result of payments made by holders of prepaid cards in the equivalent of electronic money are also established in the agreement between them.

6.8. The issuer keeps records of funds on transactions using prepaid cards in the equivalent of electronic money on a separate general (consolidated) account for all issued prepaid cards in the equivalent of electronic money. Debiting funds from this account is limited and is carried out only to the accounts of organizations accepting payments for services/goods by means of prepaid cards in the equivalent of electronic money from their holders on the basis of an agreement concluded with the issuer of prepaid cards.

6.9. The issuer of prepaid cards has the right to use special software of a non-bank institution, distribution agents and acceptance of prepaid cards for payment to accelerate the exchange of information on payments made using prepaid cards in the equivalent of electronic money.

7. Blocking, Adding to the Stop-List and Withdrawal of Cards

7.1. The issuer may terminate servicing, block or withdraw a card in the following cases:

1) non-fulfillment by the cardholder of his obligations provided for by the agreement;

2) violation of the rules for using the card;

3) expiration of the card's validity period;

4) termination of the agreement on opening a bank account;

5) other cases provided for by the legislation of the Kyrgyz Republic or the agreement.

In case of termination of card servicing, the issuer must notify the cardholder thereof in the manner established by the agreement.

7.2. The issuer must enter the card details into the stop-list of the system upon receipt from the cardholder of a notification and application about loss, theft or unauthorized use of the card.

7.3. The terms and methods of notifying the issuer and submitting an application by the cardholder about loss, theft or unauthorized use of the card, as well as the terms of entry into force of this notification, are established by the terms of the agreement, which must not contradict the regulations and operating procedures of the relevant payment system. Responsibility for the timeliness of submitting the application rests with the cardholder. After submitting this application, responsibility is assigned to the issuer, unless otherwise provided by the terms of the agreement.

7.4. If the regulations and operating procedures of the relevant system and the terms of the agreement concluded between the issuer and the cardholder do not establish the terms of entry into force of the notification about loss, theft or unauthorized use of the card, then this notification enters into force from the moment it is received by the issuer or another participant of the system that has the right to accept such notifications.

8. Requirements for the Acquirer

8.1. A bank may become an acquirer and carry out acquiring of bank payment cards only if it has a license from the National Bank of the Kyrgyz Republic for the right to conduct banking operations. The bank must conclude an agreement with the relevant payment system and its operator on participation in the system and obtain permission to perform this operation.

8.2. A bank that begins or terminates acquiring of cards of the relevant system shall notify the National Bank of the Kyrgyz Republic in the established form (Annex 2 to this Regulation) no less than one month before the actual start or termination of acquiring.

8.3. A bank that begins acquiring and servicing cards of the relevant system may establish its own network of ATMs and/or terminals and other peripheral devices according to the standards and requirements of the payment system used and ensure the conduct in this network of card operations for all cardholders of this system.

8.4. The acquirer is obliged, at its own expense, to ensure the possibility of accepting and servicing cards of the national system "Elcart" in its own network of peripheral devices and to ensure acceptance for servicing of the national card no later than within six months from the moment of connecting the first peripheral device. Any contractual relations of acquirers with merchants must not create barriers and restrictions on servicing national cards by other acquirers.

8.5. The acquirer, no later than five working days before the opening (closing) of a terminal and/or ATM, or other peripheral device, must notify the National Bank of the Kyrgyz Republic thereof in the established procedure (Annex 3 to this Regulation).

8.6. All equipment purchased by the acquirer for carrying out card operations must ensure functional compatibility of various types of cards for their mutual servicing and comply with international standards, including at least the following:

1) ISO-7816 EMV microprocessor specifications (asynchronous smart card information);

2) ISO-7810 Magnetic stripe specifications (document on physical characteristics of credit card size);

3) ISO-7811-1 Embossing;

4) ISO-7811-2 Magnetic stripe - low coercivity or ISO-7811-6 Magnetic stripe - high coercivity;

5) ISO-7811-3 Location of embossed characters;

6) ISO-7811-4 Location of tracks 1 and 2;

7) ISO-7811-5 Location of track 3;

8) ISO-7813 Cards for financial transactions.

8.7. The acquirer may establish an additional fee for the acceptance and servicing in its network of peripheral devices of cards of other commercial banks, unless otherwise provided by the regulations and operating procedures of the relevant system. The acquirer has no right to establish an additional fee for the acceptance and servicing in its network of national cards.

8.8. The acquirer must establish a limit on the amount of the operation on ATMs. The amount of one operation carried out by the cardholder through an ATM must not exceed the amount in national currency or its equivalent in foreign currency specified in paragraph 2 of Annex 4 to this Regulation.

9. Requirements for Acquiring

9.1. To install a peripheral device at a merchant, the acquirer must conclude an agreement with the merchant on opening an account for settlements on transactions conducted using the terminal, and on the right to accept and service cards of the relevant system. The agreement between the acquirer and the merchant must contain the following:

1) name of the merchant and its legal address;

2) rights and obligations of the merchant and the acquirer for the acceptance and servicing of cards;

3) types of cards accepted by the merchant for servicing on a mandatory basis;

4) prohibition of the merchant from establishing an additional commission or setting a higher price (markup) for goods/services in case of payment by card;

5) amount of commissions;

6) basic requirements for observing security when accepting cards by the merchant as a means of payment (authorization, use of PIN code by the cardholder, identification of the cardholder, limits and other requirements) provided for by the legislation of the Kyrgyz Republic;

7) procedure for returning amounts on conducted operations disputed by the relevant system;

8) procedure for reimbursing the cost of goods purchased by card upon its return;

9) procedure for conducting inspections of the merchant on the quality of card servicing, services provided, conditions of maintenance and operability of terminals, storage of receipts (slips);

10) procedure for interaction in case of detection of an operation with a stolen/lost cardholder's card or fraudulent transactions by the merchant itself;

11) distribution of liability between the parties in case of fraudulent operations, violation of security procedures or other terms of the agreement and penalties imposed on each participant;

12) procedure for considering disputes;

13) procedure for terminating the agreement;

14) requirement on the rules for ensuring security when performing a transaction in accordance with paragraph 3 of Annex 4 to this Regulation.

The agreement may provide for other additional conditions. The rules for servicing and accepting cards of the relevant system may be included in the agreement, or they are additionally attached to it.

(As amended by Resolutions of the Board of the National Bank of the Kyrgyz Republic of 30 November 2011 No. 67/11, 25 September 2013 No. 35/19)

9.2. The acquirer must ensure training of authorized employees of the merchant in the rules for accepting and servicing cards, recognizing counterfeit cards or cases of possible fraud in accordance with all security procedures established in the relevant system. Card servicing security procedures are not subject to disclosure to third parties, except for authorized employees of the merchant carrying out the acceptance and servicing of bank payment cards in peripheral devices.

9.3. The merchant may install its own terminal on the terms of compliance with the established requirements and standards imposed by the acquirer, the relevant system and this Regulation.

9.4. The acquirer may install its own peripheral devices at the merchant.

9.5. The acquirer carries out reimbursement of amounts on conducted card operations in favor of the merchant by crediting funds received from issuers for all cardholders based on the results of processing in accordance with the terms established by the regulations and operating procedures of the system and in the agreement.

10. Requirements for Processing and the Processing Center and Procedure for Final Settlements

10.1. Processing of transactions on bank payment card operations is carried out by the processing center.

10.2. The functions of the processing center may be performed by the issuer if the payment system is local and is based on making payments using a local single-issuer card.

10.3. The functions of the processing centre of a settlement system using a local multi-issuer card may be performed by an issuer or acquirer that are participants of that system. The functions of the processing centre may also be performed by an independent operator that is a participant of the system in accordance with the established regulations and operating procedures and agreements between the participants of the system in accordance with the legislation of the Kyrgyz Republic.

10.4. Processing of payments using national cards of the Elcart system and calculation of the final net positions of participants of the national system shall be carried out by the operator of the national payment system. Final settlement of participants of the payment system using national cards shall be carried out in the interbank gross settlement system in real-time mode in accordance with the regulations and operating procedures of the system.

10.5. Processing of payments made in the national currency on the territory of the Kyrgyz Republic using cards of various payment systems, mutual settlements for which are carried out between banks of the Kyrgyz Republic, must be carried out by the operator of the national payment system, since such payments are considered as domestic operations.

10.6. Processing of payments made using international cards shall be carried out by operators of international payment systems in accordance with the regulations and operating procedures and agreements of those systems.

10.7. Mutual settlements based on the results of processing transactions of participants of various payment systems using cards of residents of the Kyrgyz Republic, made within the territory of the Kyrgyz Republic, shall be carried out in the national currency of the Kyrgyz Republic.

10.8. All transactions passing between the issuer, the processing centre and the acquirer shall be in electronic form and, where necessary, shall be confirmed, where possible, by the corresponding documents (card receipts, slips).

10.9. The procedure for the transfer and provision by the processing centre of information on completed transactions to issuers and acquirers, as well as to the settlement agent, shall be established by the regulations and operating procedures of the relevant system in which the payment was made and/or by agreements concluded between the participants of that system.

10.10. Files of interbank transactions for card operations may be transferred by the processing centre to issuers and acquirers for final mutual settlements between participants of the card settlement system.

10.11. If, under the regulations and operating procedures of the payment system, final settlements are carried out by a settlement agent, the processing centre shall transfer information on completed card transactions to the settlement agent for the debiting and crediting of funds to the accounts of issuers and acquirers of the respective systems.

10.12. Mutual settlements of participants of a payment system using cards of international systems shall be carried out through cross-border payment systems.

10.13. Processing centres may provide other types of services to issuers and acquirers (personalization of cards for clients, maintenance of a database of clients and points of sale, and other services) in accordance with contractual relations.

10.14. The processing centre shall be responsible for the storage and restoration of information on transactions involving bank payment card operations for the period established by the legislation of the Kyrgyz Republic for payment documents.

10.15. Participants of a payment system for settlements using cards must comply with security requirements for operations carried out using cards in accordance with the requirements of the regulations, operating procedures and procedures established in the respective payment systems.

10.16. Risks that may arise in mutual settlements between participants of the card settlement system must be stipulated in the regulations and operating procedures of the system and distributed among the participants of the system in the agreements.

11. Final provisions

11.1. The National Bank of the Kyrgyz Republic, in order to reduce risks, carries out monitoring, analysis, regulation and supervision of payment systems using cards on the territory of the Kyrgyz Republic.

11.2. The issuer must provide to the National Bank of the Kyrgyz Republic information on the types and kinds of cards issued and serviced by it in accordance with the forms and deadlines established in the legislation of the Kyrgyz Republic.

11.3. The acquirer must provide to the National Bank of the Kyrgyz Republic information on the network of peripheral devices of card settlement systems in accordance with the forms and deadlines established by the legislation of the Kyrgyz Republic.

11.4. The processing centre must provide to the National Bank of the Kyrgyz Republic information regarding the functioning of the card settlement system in accordance with the forms and deadlines established by the legislation of the Kyrgyz Republic.

11.5. Banks providing services for the issuance and/or acquiring of cards must exercise control over clients' compliance with the terms of the respective agreements, the security of transactions and the rules for using the card.

11.6. Banks providing services for the issuance and acquiring of cards must monitor card operations according to the parameters established by the regulations and operating procedures of the respective system, and also carry out measures to stop and/or prevent erroneous and unauthorized operations. Banks may transfer these functions to a third-party processing centre in accordance with established contractual relations.

		Annex 1 to the Regulation on Bank Payment Cards in the Kyrgyz Republic

National Bank of the Kyrgyz Republic

Payment Systems Department

NOTIFICATION on the commencement (completion) of issuance of payment cards

Hereby ______ (name of bank) notifies of the commencement (completion) of issuance of payment cards ______ (name of the payment card system and type of cards) in accordance with the Agreement/official permission of the payment system ______ attached to this Notification.

Chairman of the Board (signature, seal)

Signature transcript

		Annex 2 to the Regulation on Bank Payment Cards in the Kyrgyz Republic

National Bank of the Kyrgyz Republic

Payment Systems Department

NOTIFICATION on the commencement (completion) of acquiring of payment cards

Hereby ______ (name of bank) notifies of the commencement (completion) of acquiring of payment cards ______ (name of the payment card system and type of cards) in accordance with the Agreement/official permission of the payment system ______ attached to this Notification.

Chairman of the Board (signature, seal)

Signature transcript

		Annex 3 to the Regulation on Bank Payment Cards in the Kyrgyz Republic

National Bank of the Kyrgyz Republic

Payment Systems Department

NOTIFICATION on the opening (closing) of a terminal (ATM) or other peripheral device

Hereby ______ (name of bank) notifies of the opening (closing) as of "_" ______ 200 of a terminal (ATM) at the address ______ (postal address of the location of the terminal/ATM, telephone or fax number)

Information on the terminal (ATM) or other peripheral device:

1. ______ (type of terminal/ATM)

2. ______ (brief technical specification)

Chairman of the Board (signature, seal)

Signature transcript

		Annex 4 to the Regulation on Bank Payment Cards in the Kyrgyz Republic

RESTRICTIONS on operations with bank payment cards(*)

(As amended by Resolution of the Board of the National Bank of the Kyrgyz Republic of 25 September 2013 No. 35/19)

1. The amount (sum) of funds on one prepaid card must not exceed the following limits of amounts in the national currency or its equivalent in foreign currency:

A) 1,500 (one thousand five hundred) calculation indicators, if the card is intended for the issuance of a loan to a borrower of the card-issuing bank or to a borrower of a microfinance organization within the framework of a special agreement for the servicing by the card-issuing bank of credit operations of the microfinance organization through the issuance of prepaid cards. The agreement may provide for the possibility of multiple issuance of a loan and its repayment by crediting funds to one prepaid card within the limit established by this paragraph. The bank must have procedures for controlling risks in carrying out operations with prepaid cards, including the collection and assessment of the necessary data for identifying the client, establish the period of its use and limits on cash withdrawal.

B) 500 (five hundred) calculation indicators, if the card is intended for purposes not falling under subparagraph A of paragraph 1 of this Annex.

2. The acquirer must set a limit on ATMs on the amount of a single operation. The amount of a single operation carried out by a cardholder through an ATM must not exceed 250 (two hundred and fifty) calculation indicators in the national currency or its equivalent in foreign currency.

3. Requirement on the rules for ensuring security when carrying out a transaction: In the terms of the agreement with the POS, the bank must include the indicators and list of suspicious operations and establish limits on the amount of a single operation above which the POS must request a supporting document of the cardholder (passport or other identity documents in accordance with the legislation of the Kyrgyz Republic). Data on the identity document must be entered on the card receipt. When compiling the list of suspicious operations, the bank must be guided by the legislation regulating issues of consumer rights protection, countering the financing of terrorism and the legalization ("laundering") of illegal income, as well as other regulatory legal acts related to ensuring the security of payments and settlements.

4. Prepaid cards must not be issued for servicing "salary" projects, i.e., for the payment of wages of staff employees, as well as for the payment of remuneration to persons hired by an employer to perform work and services on a permanent basis or for a period exceeding one month. The issuance of prepaid cards as remuneration for work or services is not permitted under monthly or regularly re-concluded/renewed agreements involving continuous performance of work or provision of services.

5. The issuer is prohibited from exchanging electronic money for cash using prepaid cards, except in cases where the holder of the prepaid card has their own bank account, and the issuance of cash is carried out by preliminary transfer of funds from the cardholder's prepaid card to their bank account.

(*) The NBKR has the right to change the restrictions on operations with bank payment cards specified in this Annex.