Regulation on Non-Cash Settlements in the Kyrgyz Republic (Appendix to the Resolution of the Board of the National Bank of the Kyrgyz Republic dated December 8, 2021 No. 2021-P-14/68-7-(PS))


		Appendix to the Resolution of the Board of the National Bank of the Kyrgyz Republic dated December 8, 2021 No. 2021-P-14/68-7-(PS)

REGULATION on non-cash settlements in the Kyrgyz Republic

(As amended by the Resolutions of the Board of the National Bank of the Kyrgyz Republic dated December 7, 2022 No. 2022-P-14/76-6, May 11, 2023 No. 2023-P-14/31-1)

Chapter 1. General Provisions

This Regulation determines the procedure for carrying out non-cash settlements within the territory of the Kyrgyz Republic, the relationships between its participants, as well as the forms and requirements for the documentation of payment documents used by commercial banks in carrying out non-cash settlements.
Non-cash settlements within the territory of the Kyrgyz Republic are carried out in accordance with the Constitutional Law of the Kyrgyz Republic "On the National Bank of the Kyrgyz Republic", the Civil Code of the Kyrgyz Republic, the laws of the Kyrgyz Republic "On Banks and Banking Activity" and "On the Payment System of the Kyrgyz Republic", normative legal acts of the National Bank of the Kyrgyz Republic (hereinafter - the National Bank), and this Regulation.

(As amended by the Resolution of the Board of the National Bank of the Kyrgyz Republic dated December 7, 2022 No. 2022-P-14/76-6)

The action of this Regulation extends to legal entities and individuals when conducting non-cash settlements within the territory of the Kyrgyz Republic in the national currency.
The procedure for carrying out non-cash payments in foreign currency is established in contracts between clients and banks in accordance with the banking legislation of the Kyrgyz Republic and the usages of business practice applied in international banking.

Chapter 2. Concepts and Definitions

For the purposes of this Regulation, the following concepts are used:

Acceptance - the payer's consent to pay monetary and commodity documents. Acceptance is used in settlements for goods, services, and completed works, in which payment is made with the consent (acceptance) of the payer based on accounting documents issued by the supplier.

Non-cash payment - the fulfillment of a monetary obligation by transferring funds from the payer's bank account without the participation of cash, in the form established by the banking legislation of the Kyrgyz Republic.

Non-cash settlement - a form of monetary circulation in which the movement of funds occurs without the participation of cash by debiting funds from the payer's bank account and crediting them to the payee's bank account, according to the submitted payment documents, as well as settlements using electronic money in accordance with the banking legislation of the Kyrgyz Republic. The settlement is the completion of the payment.

Client - an individual or legal entity that has concluded a bank account agreement with a bank.

Correspondent Account - an account opened by commercial banks in the National Bank for interbank settlements.

Payer - an individual or legal entity that is the initiator of the payment, from whose funds the settlement is made.

Payee - an individual or legal entity in whose favor funds are received as a result of the payment and settlement.

Settlement - the final procedure, in the course of which funds are debited from the payer's bank account and credited to the payee's bank account, according to the provided payment documents.

Settlement (Current) Account - an account intended for storing funds and carrying out current settlements, including settlements using bank payment cards, carried out by legal entities, except banks, and individual entrepreneurs (receipts, payments, mutual settlements with other individuals or legal entities, transfers to other financial and credit organizations) under a bank account agreement, as well as by individuals (residents) - agricultural producers in accordance with the requirements of the banking legislation of the Kyrgyz Republic.

Electronic Payment Document - a type of payment document prepared in electronic form, containing the necessary information for carrying out settlements, and certified by an electronic signature.

Chapter 3. Basic Provisions on the Organization of Non-Cash Settlements

Non-cash settlements within the territory of the Kyrgyz Republic are carried out by banks that have licenses to carry out settlements and payments on behalf of clients, opening and maintaining accounts opened on the basis of agreements on the opening and maintenance of a bank account, unless otherwise provided by the banking legislation of the Kyrgyz Republic, and is determined by the form of payment instruments used.
Non-cash settlements without opening an account are carried out by the deposit of cash by the payer-client into the sending bank by transfer to the specified account of the payee. Such settlements must not be related to entrepreneurial activity. In the event that funds are received by a client who does not have an account in this bank, the funds are issued by the bank in cash provided that the client is fully identified. Banks keep records of detailed information about clients for operations without opening an account (statement, journal, etc.) for each payment.
Non-cash settlements for money transfers without opening a bank account are carried out in accordance with the Rules for carrying out money transfers through money transfer systems in the Kyrgyz Republic, approved by the Resolution of the Board of the National Bank dated July 15, 2009 No. 30/6.
Non-cash settlements are carried out on the basis of payment documents submitted in electronic or paper form.
A payment document prepared in the form of a document on a paper carrier or in the form of an electronic payment document represents:

the payer's order to debit funds from his account and transfer them to the payee's account;
the payee's (collector's) order to debit funds from the payer's account and transfer them to the account specified by the payee (collector), only with the consent of the account holder (payer) or on the basis of an agreement between the bank and its client;
an order (declaration) for the deposit of cash or an application for the withdrawal of funds.

The following forms of non-cash settlements and payment instruments are used in carrying out non-cash settlements:

payment order;
payment request (in cases established by the banking legislation of the Kyrgyz Republic);
letter of credit;
payment order for direct debit (pre-authorized);
collection order;
settlement and settlement-cash check;
bank payment card;
settlements using electronic money.

Submission of an order to carry out a non-cash settlement is carried out:

by presenting the original payment document executed on a paper carrier;
by transmitting the order electronically using the corresponding electronic communication channels;
by sending the payer a payment link (a text string for transmitting payment data).

Non-cash settlements may be carried out using two-dimensional barcode symbols and payment links (QR code) in accordance with the requirements of the Rules for carrying out payments using two-dimensional barcode symbols (QR code), approved by the Resolution of the Board of the National Bank dated December 11, 2019 No. 2019-P-14/62-5-(PS).
Transmission of client orders to the bank to carry out operations on his account may be carried out via internet banking, home banking, mobile banking in real-time mode on the basis of an agreement between the bank and the client in accordance with the requirements of the normative legal acts of the National Bank.
Non-cash settlements are carried out through bank accounts by means of:

debiting funds from the payers' bank accounts and crediting funds to the payees' bank accounts;
debiting funds from the payers' bank accounts and increasing the balance of the payees' electronic money;
debiting funds from the electronic money holder's account and crediting funds to the payees' bank accounts.

Funds are debited from an account by the bank on the basis of payment documents prepared by the account holder in accordance with the requirements of this Regulation, within the amount of funds available in the account, unless otherwise provided in agreements concluded between banks and their clients, or by the banking legislation of the Kyrgyz Republic.
A non-cash settlement becomes irrevocable for the payer-client at the moment of receiving confirmation of the acceptance of the payment document for execution by the payer's bank, and final - at the moment of debiting funds from the payer's account.
A non-cash settlement becomes final for the payee at the moment of crediting funds by the receiving bank to the payee's account or issuing funds from another (internal) account of the bank to the client-payee who does not have an account in this bank.
Non-cash settlements are carried out by banks within the time limits established by the Resolution of the Government of the Kyrgyz Republic and the National Bank of the Kyrgyz Republic "On establishing the time limits for the passage of payments in the payment system of the Kyrgyz Republic and on liability for violation of the time limits for their passage" dated March 11, 2004 No. 144/1/6.
In the event of insufficient funds in the account to satisfy all claims submitted to it, the debiting of funds is carried out as they are received in the order established by the civil legislation of the Kyrgyz Republic.
The bank has the right to refuse the client's execution of an order to carry out a non-cash payment and settlement in cases and in the manner provided for by the Law of the Kyrgyz Republic "On the Payment System of the Kyrgyz Republic".
All interbank payments in national currency are carried out only through correspondent accounts of payment system participants opened in the National Bank. Opening direct correspondent accounts between payment system participants for carrying out non-cash settlements in national currency is not permitted.
A settlement conducted through bank accounts opened in the National Bank becomes final. Final settlement is unconditional and irrevocable.
The system of correspondent relations represents a method of carrying out international (cross-border) payments and providing other services to users based on agreements (agency agreements) on maintaining correspondent accounts between financial and credit organizations. International (cross-border) money transfers may be carried out by banks through specialized money transfer systems used in banking practice.

The National Bank has the right to establish requirements for the procedure for carrying out international (cross-border) money transfers, including requirements for the used bank account numbers and formats of electronic messages in accordance with international standards.

Banks must approve internal documents containing:

the procedure for preparing orders;
the procedure for accepting, revoking, and suspending the execution of orders;
the procedure for executing orders;
other provisions on the organization of non-cash settlements.

Internal documents must comply with the requirements of the banking legislation of the Kyrgyz Republic and this Regulation.
The internal infrastructure of banks must guarantee direct straight-through processing (STP) of their clients' payments in the large-value payments system and interbank retail payments systems.

Chapter 4. Procedure for Documenting Payment Documents

Payment documents on a paper carrier are prepared on forms indicating mandatory details according to the form established by the Instruction "On the procedure for filling out payment documents", approved by the Resolution of the Board of the National Bank dated July 25, 2007 No. 36/5.
Submission of a payment document electronically is carried out on the basis of an agreement (agreement) on the use of formats of electronic payment documents, electronic systems for exchanging payment documents, and the use of software-cryptographic protection and electronic signature systems or other equivalent protection means between the client and his bank, or between banks and payment system operators, unless otherwise provided by the normative legal acts of the National Bank.
An electronic payment document is accepted for processing only if it is prepared using information security tools (electronic signature, other equivalent protection means), confirming the fact of the lawful preparation of the electronic payment document by the sender and guaranteeing the integrity of the electronic payment document during its transmission and processing.
An electronic payment document, on the basis of which a payment is made (primary electronic payment document), processed in accordance with the established requirements for format and procedures for verifying authenticity, certified by an electronic signature or other equivalent protection means, as well as an electronic payment document (card check, SMS notification, electronic message) formed upon the fact of carrying out payment for goods/services, fines, and other payments in non-cash form (confirming electronic payment document), including those carried out using bank payment cards, electronic wallets, and other innovative tools, have a legal status equal to the legal status of paper payment documents and confirmations certified in accordance with the submitted requirements, and must be accepted as evidence when considering judicial and other disputes.

The use of an electronic signature is carried out in accordance with the Law of the Kyrgyz Republic "On Electronic Signature".

The date on an electronic payment document (card check, SMS notification, electronic message) formed upon the fact of carrying out payment for goods/services, fines, taxes, state services, and other payments in non-cash form is the date of the payment and serves as confirmation of the fact of carrying out a non-cash payment in favor of the payee, including for third parties.
A payment document is prepared in the state and/or official language(s). Additional preparation of payment documents in other languages is permitted in cases established by an agreement between the bank and its client.
When accepting payment documents, the bank carries out their verification for compliance with the requirements established by the normative legal acts of the National Bank and this Regulation.
Payment documents prepared in violation of the established requirements are not accepted by the bank for execution and are returned to the sender no later than one operating day.

When returning accepted but unexecuted payment documents on a paper carrier for one reason or another, a note is made on the reverse side of the first copy indicating the reason for return, the date of return, the bank's stamp, and the signatures of the responsible executor and controlling bank employee with the indication of surnames. This requirement does not apply to electronic payment documents (card check, SMS notification, electronic message) formed upon the fact of carrying out payment for goods/services, fines, and other payments in non-cash form.

Chapter 5. Settlements Using a Payment Order

When carrying out non-cash settlements using payment orders, the payer provides the servicing bank with an order to transfer (transfer) a specific amount of funds from his account to the payee's account opened in this or another bank. A payment order is used by individuals and legal entities when carrying out all types of payments in national currency within the territory of the Kyrgyz Republic.
A payment order is executed by the bank in accordance with the date indicated in the document, or within the time limit provided for in the bank account agreement.
A payment order on a paper carrier is prepared on forms according to the form established by the Instruction "On the procedure for filling out payment documents".
When carrying out non-cash settlements through communication enterprises by legal and physical entities for goods received, services rendered, as well as when returning financial revenues to the budget, accepted payment orders may be used in accordance with the rules and procedure for using accepted payment orders determined by the banking legislation of the Kyrgyz Republic.

Chapter 6. Settlements Using a Tax Payment Request

A tax payment request is issued in accordance with the tax legislation of the Kyrgyz Republic by the tax authorities of the Kyrgyz Republic to the taxpayer's bank account or to the account of a third party having a debt to the taxpayer, for the purpose of settling the tax debt.
A tax payment request is executed by the bank by debiting funds from the taxpayer's accounts, including foreign currency, to pay off his tax debt, no later than one operating day following the day the tax payment request is received by the bank.
In the event of insufficient or absence of funds in the taxpayer's accounts on the day the bank receives the tax payment request, such a request is executed as funds are received into these accounts no later than one operating day following the day of each such receipt.

Chapter 7. Settlements Using a Payment Order for Direct Debit (Pre-authorized)

Non-cash settlements by pre-authorized direct debit are used by bank clients to carry out regular payments (payments to utility companies) and/or payments with a fixed amount (insurance premiums, mortgages, etc.).
Payment by pre-authorized direct debit is carried out on the basis of an agreement between the client and his bank, according to which the client gives prior consent to debit funds from his account based on submitted orders from the payee to the client's bank account for payment for supplied goods, completed works, or rendered services, with the attachment of corresponding documents to the aforementioned agreement. Payment by pre-authorized direct debit may also be carried out at the initiative of the sender.
The rights and obligations of the client and the bank when carrying out settlements by pre-authorized direct debit arise from the moment of concluding the corresponding agreement between the payer and the bank.
The payer must provide the payee with a written order (consent) to initiate the payee through the receiving bank to order the direct debit of the payer's account in the payer's bank.
The payee must send the payer a receipt for payment for services rendered within the established time period before carrying out the settlement by pre-authorized direct debit of the account.
The payee provides his bank with an order for direct debit of the payer's account. The receiving bank sends the direct debit order to the payer's bank for settlement on the established date.
The payer's bank must execute the receiving bank's order submitted to his client's settlement account within the amount of funds in the client's account and/or the time period provided for in the contract with the client.
The payer must maintain a sufficient balance of funds in his account in the bank to ensure payment for payments submitted by orders for pre-authorized direct debit and other operations.
If the amount of the payment indicated by the payee in the direct debit order for the settlement account differs from the amount expected by the payer to be paid, the payer has the right to cancel the pre-authorization in accordance with the banking legislation of the Kyrgyz Republic.
The payer's bank notifies the receiving bank of the non-execution of the payment by returning the direct debit order in the event of insufficient funds in the payer's account to ensure payment of the submitted amount, cancellation of the pre-authorization by the client, or for other reasons provided for in the contract with the client.

Chapter 8. Settlements Using a Letter of Credit

A letter of credit represents a conditional monetary obligation of the bank issued by it on behalf of the client in favor of his counterparty to the contract, according to which the bank that opened the letter of credit (issuing bank) makes a payment to the supplier or grants authority to another bank to make such payments upon presentation of the documents provided for in the letter of credit and upon fulfillment of other conditions of the letter of credit.
Settlements with letters of credit are governed by the Civil Code of the Kyrgyz Republic, the Law of the Kyrgyz Republic "On Letters of Credit", as well as the Uniform Rules and Customs for Documentary Credits prepared by the International Chamber of Commerce in the 1993 edition or a later edition.
Bank internal documents must include norms establishing clear rules for carrying out settlements with letters of credit.
A letter of credit may be revocable or irrevocable. In the absence of an indication of the type of letter of credit, it is considered irrevocable.
A revocable letter of credit is one that can be modified or canceled by the issuing bank without prior notification of the payee. Cancellation of a letter of credit does not create any obligations of the issuing bank to the payee.
An irrevocable letter of credit is one that cannot be modified or canceled without the consent of the payee.
In settlements under a letter of credit, the bank acting on the payer's order to open a letter of credit and in accordance with its instructions (issuing bank) undertakes to transfer funds to the payee upon condition of presentation by the latter of the documents provided for in the letter of credit and for the fulfillment of the agreed conditions in the letter of credit.
The issuing bank may authorize another bank to execute (executing bank) or confirm (confirming bank) the letter of credit. If the executing bank is not a confirming bank, no authority to make payments under the letter of credit is imposed on it, except in cases specifically agreed with the executing bank, which must be reported to the beneficiary/payee. The confirming bank adds its obligation to make a payment under the letter of credit.
A letter of credit is separate and independent from the main contract. A letter of credit is opened by the issuing bank based on an application from the payer, which is prepared in the manner established by the bank. The issuing bank's consent to execute the letter of credit does not prevent its execution by the issuing bank.
The details and form of a letter of credit are established by the bank. The following information must be specified in the letter of credit:

the number and date of the letter of credit;
the amount of the letter of credit;
details of the payer;
details of the issuing bank;
details of the payee;
details of the executing bank;
the type of letter of credit;
the validity period of the letter of credit;
the method of executing the letter of credit;
the list of documents to be provided by the payee and the requirements for them;
the purpose of the payment;
the deadline for submitting documents;
the necessity of confirmation (if any);
the procedure for paying bank commissions.

Other information may also be specified in the letter of credit.

Upon receiving a letter of credit from the issuing bank with the authority to execute the letter of credit, the executing bank, if it disagrees to accept the authority to execute the letter of credit, is obliged to immediately notify the issuing bank, indicating the reasons for refusal.
The executing bank informs the payee of the terms of the letter of credit received from the issuing bank. In accordance with the authority granted by the issuing bank, the executing bank may engage another bank, including the payee's bank, to inform the payee of the terms of the letter of credit, which notifies the executing bank of the date the terms of the letter of credit were communicated to the payee.
In the event of a change in the terms of the letter of credit or a request to revoke the letter of credit, the payer submits a corresponding application to the issuing bank. In accordance with the received application, the issuing bank sends a notice to the executing/confirming bank regarding the change in the terms of the letter of credit or a request to revoke the letter of credit. Based on the notice received from the issuing bank, the executing bank informs the payee of the change in the terms of the letter of credit or requests the revocation of the letter of credit. Partial acceptance of changes to the terms of the letter of credit by the payee is not permitted.
To execute the letter of credit, the beneficiary/payee provides documents specified in the terms of the letter of credit to the issuing/executing/confirming bank within the validity period of the letter of credit and within the time limit for submitting documents as stipulated by the terms of the letter of credit. If the expiration date of the validity period of the letter of credit or the deadline for submitting documents falls on a non-working day, the beneficiary/payee may submit documents on the first working day after the expiration of the corresponding deadline.
The issuing/executing/confirming bank checks the correspondence of the provided documents to the external features of the terms of the letter of credit and the absence of contradictions between the documents.
Upon establishing that the submitted documents correspond to the terms of the letter of credit, the issuing/executing/confirming bank makes a payment to the beneficiary/payee.
The execution of the letter of credit is carried out by transferring funds by a payment order of the issuing/executing/confirming bank to the beneficiary's bank account or by crediting the corresponding amount to the beneficiary's bank account in the executing/confirming bank.
After the execution of the letter of credit, the executing/confirming bank sends a notice of the execution of the letter of credit to the issuing bank, indicating the execution amount and attaching the provided documents.
If the issuing bank, having received documents accepted by the executing/confirming bank, considers that they do not correspond to the external features of the terms of the letter of credit, it has the right to refuse to accept them and demand from the executing/confirming bank the amount paid to the beneficiary/payee in violation of the terms of the letter of credit, and for an uncovered letter of credit - to refuse reimbursement of the paid amounts.

A letter of credit in the executing bank is closed:

upon the expiration of the letter of credit;
upon the application of the payee/beneficiary to refuse to use the letter of credit before the expiration of its validity and release the issuing bank from obligations under the issued letter of credit, if such a refusal is provided for by the terms of the letter of credit;
upon the request of the payer for the full or partial revocation of the letter of credit, if such revocation is possible under the terms of the letter of credit;
after the full payment by the executing bank of the letter of credit amount for properly formatted documents submitted by the beneficiary in advance, i.e., before the expiration of the letter of credit.

The executing/confirming bank must notify the issuing bank of the closure of the letter of credit. The unused amount of funds of a deposited letter of credit must be returned to the issuing bank simultaneously with the closure of the letter of credit. The issuing bank is obliged to credit the returned amounts to the account of the payer from whom the funds were deposited.

Chapter 9. Settlements using a collection order

When settling by a collection order, the client sends an order to his bank (the issuing bank) to carry out actions on behalf of the client to receive payment from the payer.
Settlements by a collection order are governed by the Civil Code of the Kyrgyz Republic and the Uniform Rules for Collections, prepared by the International Chamber of Commerce (ICC Publication No. 522) (hereinafter - Uniform Rules).
Bank internal documents must contain provisions establishing clear rules for conducting settlements with a collection order.
The client presents a collection order and all documents to the payer's account through the issuing bank. All documents must be accompanied by a collection order, which indicates that this collection order is subject to the Uniform Rules, and contain accurate and complete instructions. The collection instructions must clearly specify the time period for the payer to take any action.
The following information must be specified in the collection order:

information about the bank from which the collection order was received (the issuing bank to which the principal entrusts the collection operation);
information about the principal (the party that entrusts the issuing bank with the collection operation);
information about the payer (the person to whom the presentation was made in accordance with the collection order);
information about the executing bank, if any (the collecting bank carrying out the presentation to the payer);
the amount(s) and currency(ies) to be collected;
the list of attached documents, indicating the number of pages of each document;
deadlines and conditions for receiving payment and/or acceptance;
conditions for transferring collected documents;
instructions on accepting partial payment;
instructions on making a protest or other legal actions in the event of non-acceptance or non-payment. In the absence of such instructions, banks participating in the collection are not obliged to make a protest or other legal actions;
instructions on the procedure and rules for paying remuneration and/or reimbursing expenses related to the collection.

The issuing bank checks the correctness and completeness of the formatting of the collection order and the presence of attached documents.
The issuing bank, having received a collection order, has the right to engage another bank (the executing bank) to execute it. The executing bank presents documents for acceptance by the payer for collection, received from the issuing bank. If acceptance or payment was not received, the client must be immediately notified and instructions requested from him regarding further actions.
In the absence of instructions from the client regarding further actions within the established time limit, the executing bank has the right to return the documents to the issuing bank.
To execute a collection order, the payer submits a payment order to his servicing bank.
The collected amount received, unless otherwise agreed, is credited by the executing bank only to the benefit of the issuing bank, which, in turn, credits it to the account of the principal. The executing bank and the issuing bank have the right to deduct their remuneration and reimbursement of expenses from the collected amounts.
Partial payment of the collected amount is possible only if the collection order contains corresponding instructions. In the absence of such, the documents will be transferred by the executing bank to the payer only after full payment has been made.

Chapter 10. Settlements using a settlement and settlement-cash check

Check settlements are carried out in the manner determined by the Civil Code of the Kyrgyz Republic and the contract between the client and the bank.
A check must contain details established by the Civil Code of the Kyrgyz Republic, and may also contain details determined by the bank. The form of the check and the procedure for filling it out are determined by the bank.

Chapter 11. Settlements using a bank payment card

Cashless settlements using bank payment cards may be carried out when paying for goods, works, services, taxes, fines, fees, and other payments to the budget through ATMs, terminals and/or other peripheral devices, via mobile banking, internet banking.
A document on paper and/or in electronic form, formed by a terminal, ATM and/or other peripheral device, via mobile banking, internet banking when processing a transaction for the payment of goods, works, services, including taxes, fines, fees, and other payments to the budget using a bank card, is confirmation of the completion of payment.
All settlements using bank payment cards within the territory of the Kyrgyz Republic must be carried out in the national currency.

Settlements using bank payment cards for payments for online casino and electronic (virtual) casino services, as well as other types of gambling services, which may be carried out by gambling operators on the Internet, based on a license issued in accordance with the legislation of the Kyrgyz Republic, may be carried out in national and/or foreign currencies.

Prices for services must be indicated in som and without reference to the foreign exchange rate, except for contracts for the supply of exported services, when the payment currency is determined by the agreement of the parties.

(As amended by the Resolution of the Board of the National Bank of the Kyrgyz Republic dated May 11, 2023 No. 2023-P-14/31-1)

The collection, processing, and storage of financial information on payments made in national currency using bank payment cards of various payment systems are carried out within the territory of the Kyrgyz Republic (domestic payments). Clearing for domestic payments is carried out by the operator of the national payment system.
The conduct of cashless settlements using bank payment cards, including the collection, processing, and storage of financial information on payments using bank payment cards, is carried out in accordance with the Regulation "On Bank Payment Cards in the Kyrgyz Republic", approved by the Resolution of the Board of the National Bank dated December 9, 2015 No. 76/8.
Final settlement of participants in the settlement system using bank payment cards is carried out in the interbank gross settlement system in real-time mode in accordance with the system's regulations and procedures and normative legal acts of the National Bank.

Chapter 12. Settlements using electronic money

Payments and settlements using electronic money are carried out in accordance with the banking legislation of the Kyrgyz Republic.

Chapter 13. Settlements with bank guarantees

A bank guarantee is one of the forms of securing monetary obligations and is used to reduce possible losses in the event of non-performance by one of the parties of its obligations.
Bank guarantees are issued by banks if the operation is included in the list of permitted banking operations in the bank's license to conduct banking operations. Bank internal documents must contain provisions establishing clear rules for conducting settlements with bank guarantees.
A bank guarantee is characterized by urgency and irrevocability; the guarantor has no right to unilaterally refuse to fulfill obligations assumed by him, unless otherwise specified.
Depending on the conditions for payment of the monetary sum to the creditor, the guarantee may be on first demand (unconditional) and conditional. In the case of a conditional guarantee, the guarantor must make a payment under the guarantee upon the written request of the creditor upon the occurrence of conditions stipulated in the guarantee agreement.
Depending on the purpose, the following types of guarantees are distinguished:

tender guarantee;
performance guarantee;
advance payment return guarantee;
payment guarantee;
counter-guarantee;
customs guarantee.

The obligation of the guarantor to the creditor provided for by the bank guarantee is separate and independent from the main obligation, for the fulfillment of which it is issued, even if the guarantee contains a reference to this obligation.
The following information must be specified in the bank guarantee agreement:

information about the principal (the party whose fulfillment of obligations is secured by the guarantee);
information about the creditor (the party in whose favor the guarantee is issued);
information about the guarantor (the party issuing the guarantee);
conditions for the occurrence of a guarantee case;
the amount of the guarantee;
the term of the guarantee.

The list of information may be supplemented by mutual agreement of the parties to the bank guarantee agreement.

The issuance of a bank guarantee is carried out based on an application to the bank for the issuance of a bank guarantee submitted by the principal. A copy of the main contract or other document containing the main obligation, the fulfillment of which is secured by the bank guarantee, is attached to the application.
The issuance of a bank guarantee, as well as the submission of claims for the fulfillment of obligations under a bank guarantee, may be оформлены in written and electronic forms.
Upon the occurrence of a guarantee case, the creditor submits a written payment claim under the bank guarantee. The claim under the guarantee must be supported by the creditor's application and other documents specified in the guarantee.
Upon receiving a payment claim under a bank guarantee, the guarantor informs the principal about the submitted claim and sends copies of the payment claim under the bank guarantee and the documents attached to it.
If the submitted payment claim under a bank guarantee is proper and corresponds to the terms of the guarantee, the guarantor makes a payment to the benefit of the creditor.
The guarantor's obligation to the creditor under the guarantee is terminated in the event of:

payment to the creditor of the amount for which the guarantee was issued;
the expiration of the term specified in the guarantee for which it was issued;
the creditor's refusal of his rights under the guarantee and its return to the guarantor;
the creditor's refusal of his rights under the guarantee by a written statement releasing the guarantor from his obligations.

Regulation on Non-Cash Settlements in the Kyrgyz Republic (Appendix to the Resolution of the Board of the National Bank of the Kyrgyz Republic dated December 8, 2021 No. 2021-P-14/68-7-(PS))

Lineage: In force