Regulation on operations carried out in accordance with Islamic banking and finance principles

Go back\n\nPrint version\n\nDate of creation: 2026-09-30\n\nAppendix\n\nto the Resolution of the Board of the National Bank of the Kyrgyz Republic\n\ndated September 23, 2009 No. 38/8\n\nREGULATION\n\non operations carried out in accordance with Islamic banking and finance principles\n\n(As amended by resolutions of the Board of the National Bank of the Kyrgyz Republic dated August 28, 2013 No. 32/8, February 10, 2016 No. 7/2, December 21, 2016 No. 49/8, May 31, 2017 No. 21/10, March 28, 2018 No. 2018-P-12/10-6, August 14, 2019 No. 2019-P-12/42-1, August 14, 2019 No. 2019-P-12/42-2, September 23, 2020 No. 2020-P-12/51-1, February 24, 2022 No. 2022-P-12/9-4, November 16, 2022 No. 2022-P-12/70-1, June 14, 2023 No. 2023-P-12/38-3, December 20, 2023 No. 2023-P-12/80-3, October 8, 2025 No. 2025-P-12/50-3-(NPA), October 23, 2025 No. 2025-P-12/55-4-(NPA), December 19, 2025 No. 2025-P-12/68-2-(NPA), April 27, 2026 No. 2026-P-12/26-3-(NPA), September 24, 2026 No. 2026-P-12/47-4-(NPA))\n\nSECTION I\n\nGENERAL PROVISIONS\n\n1.1. (Repealed in accordance with the Resolution of the Board of the National Bank of the Kyrgyz Republic dated May 31, 2017 No. 21/10)\n\n1.2. The purpose of this Regulation is to establish the procedure for commercial banks, including banks with an "Islamic window" (hereinafter - banks), to carry out certain types of operations in accordance with Islamic banking and finance principles.\n\n(As amended by the Resolution of the Board of the National Bank of the Kyrgyz Republic dated May 31, 2017 No. 21/10)\n\n1.3. A bank carrying out operations in accordance with Islamic finance principles must invest funds only in Sharia-compliant business.\n\n1.4. A Sharia Board must be established in the bank. All policies and standard contracts of the bank must be approved by the Sharia Board.\n\n(As amended by the Resolution of the Board of the National Bank of the Kyrgyz Republic dated May 31, 2017 No. 21/10)\n\n1.5. When carrying out operations based on Islamic banking and finance principles, the bank must comply with the requirements for identification of individuals and operations for the purpose of countering the financing of criminal activity and the legalization (laundering) of criminal proceeds, in the manner established by the legislation of the Kyrgyz Republic.\n\n(As amended by resolutions of the Board of the National Bank of the Kyrgyz Republic dated February 10, 2016 No. 7/2, May 31, 2017 No. 21/10, August 14, 2019 No. 2019-P-12/42-1, December 19, 2025 No. 2025-P-12/68-2-(NPA))\n\n1.6. Contracts in accordance with Islamic banking and finance principles, including in the form of an electronic document signed by means of an electronic signature that allows its affiliation to a party to the contract to be certified, with all their annexes and other contracts/agreements by agreement of the parties, are drawn up in the state language and, if necessary, in the official language (if necessary, the text of the contract may be translated into
another language). This consent is filed/stored in the client/partner's dossier.\n\n(As amended by the Resolution of the Board of the National Bank of the Kyrgyz Republic dated December 20, 2023 No. 2023-P-12/80-3)\n\n1.7. The bank is recommended to pay special attention to issues of interaction and assistance to clients with disabilities, including those related to:\n\n- etiquette rules when communicating with a client;\n\n- rules for accompanying a client when a bank employee and the client perform necessary operations within the framework of service;\n\n- application of accessible measures for the most comfortable service;\n\n- communication with the client himself, and not with his escort, unless the client has chosen a different method of communication;\n\n- minimization of stressful factors and full (detailed, thorough) explanation of banking procedures during client service.\n\n(As amended by the Resolution of the Board of the National Bank of the Kyrgyz Republic dated December 20, 2023 No. 2023-P-12/80-3)\n\n1.8. When serving a client with visual or hearing impairment, the bank must, at the client's request, provide audio reproduction/sign language interpretation of the contract text and other documents signed by the client.\n\nThe bank must provide a client who is unable to sign independently due to existing impairments with the opportunity to affix a signature (including a facsimile signature) in contracts and other documents signed by the client, taking into account the requirements of the legislation of the Kyrgyz Republic.\n\n(As amended by the Resolution of the Board of the National Bank of the Kyrgyz Republic dated December 20, 2023 No. 2023-P-12/80-3)\n\n1.9. Movable and immovable property that is the subject of a contract under Islamic banking and finance principles must be insured in cases provided for by the legislation of the Kyrgyz Republic in the field of mandatory insurance.\n\n(As amended by the Resolution of the Board of the National Bank of the Kyrgyz Republic dated October 23, 2025 No. 2025-P-12/55-4-(NPA))\n\n1.10. Movable and immovable property that is the subject of a pledge agreement under Islamic banking and finance principles must be insured by the pledgor in cases where the legislation of the Kyrgyz Republic in the field of mandatory insurance or the pledge agreement imposes on the pledgor the obligation to insure the pledged property.\n\n(As amended by the Resolution of the Board of the National Bank of the Kyrgyz Republic dated October 23, 2025 No. 2025-P-12/55-4-(NPA))\n\n1.11. When providing financing for which a repayment schedule or income accrual is possible, the contract must additionally specify the markup/income or increase in the client's debt compared to the price (cost) of the goods, work, or service in nominal annual percentage value, calculated in accordance with the Regulation "On minimum requirements for the pricing policy of banking, payment services and services provided by microfinance
organizations, and for marketing activities," approved by the Resolution of the Board of the National Bank of the Kyrgyz Republic dated December 29, 2021 No. 2021-P-12/75-1-(BS).\n\n(As amended by the Resolution of the Board of the National Bank of the Kyrgyz Republic dated April 27, 2026 No. 2026-P-12/26-3-(NPA))\n\nSECTION II\n\nTYPES OF TRANSACTIONS IN ACCORDANCE WITH ISLAMIC BANKING AND FINANCE PRINCIPLES\n\nChapter 2.1\n\nMudarabah Contract\n\n(Chapter title\n\nas amended by the Resolution of the Board of the National Bank of the Kyrgyz Republic dated November 16, 2022 No. 2022-P-12/70-1)\n\n2.1.1. A Mudarabah contract is an agreement under which one party - the investor - provides capital (money), and the other party (Mudarib) accepts this capital and manages it for the purpose of generating profit, which is proportionally distributed between the parties in accordance with the terms of the contract. The debt/obligation of the Mudarib or another party to the investor cannot be used as capital in a Mudarabah contract.\n\nIf losses are incurred during the execution of the contract, the investor bears the losses up to the amount of capital provided, and the Mudarib in such a case does not receive remuneration for his work. This rule for distributing losses applies if the losses did not arise due to the fault of the Mudarib.\n\nIf losses during the execution of the contract arose as a result of the Mudarib's culpable or unlawful actions, these losses must be covered by the Mudarib. In this case, the investor has the right to receive from the Mudarib the amount previously transferred under the contract from the security, and if it is insufficient, then from other property of the Mudarib.\n\n(As amended by resolutions of the Board of the National Bank of the Kyrgyz Republic dated December 21, 2016 No. 49/8, May 31, 2017 No. 21/10, November 16, 2022 No. 2022-P-12/70-1)\n\n2.1.2. Mudarabah contracts are divided into the following types:\n\nLimited (special) Mudarabah contract - a Mudarabah contract under the terms of which the investor specifies the types of assets or projects for the Mudarib to invest in.\n\nUnlimited (general) Mudarabah contract - a Mudarabah contract under the terms of which the Mudarib has the right to use the funds at his discretion in any of his activities.\n\nOpen Mudarabah contract - a Mudarabah contract under the terms of which the investor has the right to prematurely (on first demand) receive the funds provided by him from the Mudarib. In this case, the bank (if it acts as the Mudarib) pays the investor profit for the last full period (month, year).\n\nThe parties may agree on a gradual withdrawal of capital by the investor.\n\n(As amended by resolutions of the Board of the National Bank of the Kyrgyz Republic dated November 16, 2022 No. 2022-P-12/70-1, June 14, 2023 No. 2023-P-12/38-3)\n\n2.1.3. A Mudarabah contract is applied by the bank in two cases:\n\n- as a tool for attracting funds;\n\n- as a financing tool.\n\n(As
amended by resolutions of the Board of the National Bank of the Kyrgyz Republic dated November 16, 2022 No. 2022-P-12/70-1, December 20, 2023 No. 2023-P-12/80-3)\n\n2.1.4. A Mudarabah contract is concluded in written form or in the form of an electronic document signed by means of an electronic signature that allows its affiliation to a party to the contract, with all their annexes.\n\n(As amended by the Resolution of the Board of the National Bank of the Kyrgyz Republic dated December 20, 2023 No. 2023-P-12/80-3)\n\n2.1.5. The bank, acting as an investor, must evaluate the business plan, identify objects for investment, evaluate the client's activities, and subsequently advise him during the execution of the contract.\n\n2.1.6. When issuing funds under a limited (special) Mudarabah contract, the bank must include conditions in the contract prohibiting the Mudarib from misusing funds, including issuing loans to third parties and providing gifts and donations for charitable purposes at the expense of financing funds.\n\n(As amended by the Resolution of the Board of the National Bank of the Kyrgyz Republic dated June 14, 2023 No. 2023-P-12/38-3)\n\n2.1.7. For the proper fulfillment of obligations under a Mudarabah contract, the bank, acting as an investor, must obtain security from the client in the form of a pledge, suretyship, guarantee, earnest money, and other types of security provided for by law or contract for an amount equal to the amount provided by the bank under the contract.\n\n(As amended by the Resolution of the Board of the National Bank of the Kyrgyz Republic dated November 16, 2022 No. 2022-P-12/70-1)\n\n2.1.8. A Mudarabah contract must provide for at least:\n\n1) indication of the type of contract;\n\n2) depending on the type of contract - indication of the investment object, a provision on the impossibility of early withdrawal of the deposited amount, the possibility of mixing funds received from the investor with funds of third parties;\n\n3) the amount provided;\n\n4) method of securing obligations;\n\n5) rights and obligations of the parties;\n\n6) liability of the parties for non-performance or improper performance of the obligation to compensate for losses incurred during the execution of the contract as a result of culpable or unlawful actions;\n\n7) procedure for distributing profits and losses between the parties;\n\n8) conditions for the parties to execute the contract independently or with the involvement of qualified persons;\n\n9) accounting for the use of received funds, allowing for the determination of the profit received at the end of the contract or a separate stage, subject to distribution between the parties;\n\n10) procedure for terminating the contract.\n\n(As amended by the Resolution of the Board of the National Bank of the Kyrgyz Republic dated December 21, 2016 No. 49/8)\n\n2.1.9. The profit of the parties to the contract is determined in the manner provided for by the contract as a share of the profit
received. The procedure and terms for distributing profit from operations under a Mudarabah contract are established in accordance with the terms of the contract.\n\n(As amended by the Resolution of the Board of the National Bank of the Kyrgyz Republic dated June 14, 2023 No. 2023-P-12/38-3)\n\n2.1.10. A Mudarabah contract cannot be terminated unilaterally if:\n\n- the Mudarib has started to execute the contract and is already using the funds in entrepreneurial activity;\n\n- the term of the contract has not expired.\n\nChapter 2.2\n\nSharika/Musharaka Contract\n\n(Chapter title\n\nas amended by the Resolution of the Board of the National Bank of the Kyrgyz Republic dated November 16, 2022 No. 2022-P-12/70-1)\n\n2.2.1. A Sharika/Musharaka contract is a partnership agreement between two or more parties, whereby each partner contributes a certain amount of money or, with the consent of all partners, material assets, which gives each partner the right to conduct business using the company's assets on terms of profit distribution according to the Sharika/Musharaka contract, and each partner bears losses in accordance with their contribution to the company's total capital.\n\nA Sharika/Musharaka contract may also be concluded regarding jointly acquired property by the partners.\n\n(As amended by resolutions of the Board of the National Bank of the Kyrgyz Republic dated November 16, 2022 No. 2022-P-12/70-1, September 24, 2026 No. 2026-P-12/47-4)\n\n2.2.2. A Sharika/Musharaka contract is classified into two main categories:\n\n1) association of participants without forming a legal entity;\n\n2) association of participants with the formation of a legal entity, including partnership associations and/or legal entities created in accordance with the legislation of the Kyrgyz Republic.\n\nUnless otherwise follows from the subject of the contract, a Sharika/Musharaka contract applies to both associations of participants without forming a legal entity and associations with the formation of a legal entity.\n\nDecreasing Musharaka contract – a form of partnership based on a Sharika/Musharaka contract, in which one of the partners undertakes to gradually buy out the share of another partner in the partnership or in the property until full transfer of ownership to him.\n\nThe obligation to buy a share of another partner in the partnership or in the property must be independent of the Sharika/Musharaka contract. In addition, the Decreasing Musharaka contract must be independent of the Sharika/Musharaka contract. It is not allowed for one contract to be concluded on condition of concluding another contract.\n\nThe price at which the property will be bought out is determined in the obligation to purchase the partner's share.\n\nA Decreasing Musharaka contract can be concluded without prior conclusion of a Sharika/Musharaka contract.\n\n(As amended by resolutions of the Board of the National Bank of the Kyrgyz Republic dated November 16, 2022 No. 2022-P-12/70-1,
September 24, 2026 No. 2026-P-12/47-4)\n\n2.2.2-1. The partner undertakes to use the property for purposes not contradicting the legislation of the Kyrgyz Republic and the requirements of Sharia standards, and also to ensure its preservation during use.\n\nThe bank and the partner bear joint responsibility for any damage caused to the property, as a result of which the quality of the property has deteriorated, according to their shares at a certain point in time.\n\nProperty under Sharika/Musharaka and Decreasing Musharaka contracts must be insured in cases provided for by the legislation of the Kyrgyz Republic in the field of insurance.\n\nInsurance and current maintenance costs of the property are borne by the partners proportionally to their shares. It is not allowed to impose the above expenses on one of the partners, even on the basis that the property will be transferred to him in the future.\n\n(As amended by the Resolution of the Board of the National Bank of the Kyrgyz Republic dated September 24, 2026 No. 2026-P-12/47-4)\n\n2.2.3. In a Decreasing Musharaka contract, the general rules of a Sharika/Musharaka contract apply, and it is not allowed to include in a Decreasing Musharaka contract any provision that gives any party the right to withdraw its share from the company's capital or joint property.\n\nA Sharika/Musharaka contract is concluded in written form or in the form of an electronic document signed by means of an electronic signature that allows its affiliation to a party to the contract, with all their annexes.\n\nIf a legal entity is created on the basis of the contract, it is subject to registration in the manner established by the legislation of the Kyrgyz Republic. The purpose of the partnership must be clearly formulated in the partnership establishment document or the charter of the legal entity.\n\n(As amended by resolutions of the Board of the National Bank of the Kyrgyz Republic dated December 20, 2023 No. 2023-P-12/80-3, September 24, 2026 No. 2026-P-12/47-4)\n\n2.2.4. The bank is allowed to conclude partnership agreements if the financial resources or property presented by the parties for the purpose of carrying out partnership activities come from permissible sources. When creating a legal entity based on a partnership, all necessary confirmations of compliance with Sharia rules and principles must be obtained when performing operations in the process of partnership activities, including the exercise of management in compliance with Sharia rules.\n\n2.2.5. When making amendments to a partnership agreement, if profit distribution shares are revised, each partner must bear losses in accordance with their contributed share in the capital.\n\n2.2.6. If material assets (goods) are contributed to the capital of a legal entity established on the basis of a Sharika/Musharaka contract, the monetary value of such assets must be determined on the basis of an independent valuation.\n\nIf partners have made capital contributions
in different currencies, they must be converted into the currency of the Sharika/Musharaka contract at current exchange rates.\n\n(As amended by the Resolution of the Board of the National Bank of the Kyrgyz Republic dated May 31, 2017 No. 21/10)\n\n2.2.7. It is not allowed to contribute debt obligations (accounts receivable) as a contribution to the capital of a legal entity established on the basis of a Sharika/Musharaka contract. Debt obligations may be contributed to the capital of a partnership established on the basis of a Sharika/Musharaka partnership agreement only if they are inseparable from other assets presented as a capital contribution. In this case, the value of net assets must be confirmed by independent auditors.\n\n2.2.8. The agreement for the creation of a legal entity based on a partnership must provide for the obligation of each partner to act within the framework of the agreement and in the interests of the company, as well as unconditional compliance with Sharia rules and principles.\n\n2.2.9. The contract may provide for the condition that the management of the legal entity is carried out by certain partners or by one partner. In this case, other partners are obliged to adhere to this decision and not take actions on behalf of the company.\n\n2.2.10. A Sharika/Musharaka contract may provide for the appointment of a manager not from among the partners, for a fixed remuneration included in the company's costs, or provide for payments in the form of a share of investment profit and a fixed remuneration to encourage the manager. If, from the very beginning, management is carried out on the basis of the size of the share of the profit received, then this action classifies the manager as a Mudarib, and in this case, he is entitled only to a share in the profit, if any, and is not paid any more remuneration for manager services.\n\n2.2.11. The parties may provide for a fixed remuneration to a partner who contributes by providing management services for the company's funds established on the basis of a Sharika/Musharaka contract, or who provides his services in any other form, for example, provides accounting services. In this case, the parties to the Sharika/Musharaka contract may determine a larger share of the profit for such a partner than he would have earned in accordance with his share in the partnership capital.\n\n(As amended by the Resolution of the Board of the National Bank of the Kyrgyz Republic dated November 16, 2022 No. 2022-P-12/70-1)\n\n2.2.12. A Sharika/Musharaka contract must provide for the liability of partners in the form of providing security to cover losses in case of unlawful actions, negligence, carelessness, or breach of contract by partners/partner.\n\n2.2.13. If a guarantee for compensation of losses incurred by some or all partners is provided by a third party, such a guarantee must meet the following requirements:\n\n1) the legal capacity and financial obligation of such a third party acting as
guarantor must be independent of the Sharika/Musharaka contract;\n\n2) the guarantee cannot be provided for a specific compensation and cannot be linked to the Sharika/Musharaka contract;\n\n3) the third party acting as guarantor must not own more than half of the capital in the company to which it gives the guarantee;\n\n4) the company that received the guarantee must not own more than half of the capital of the company providing such a guarantee;\n\n5) a partner in whose favor a third-party guarantee is issued does not have the right to refuse to fulfill his obligations under the contract if the guarantor fails to fulfill the terms of the guarantee.\n\n2.2.14. A Sharika/Musharaka contract must provide for the procedure for distributing profits between the parties as a share of the profit received proportionally to each partner's contribution to the company's capital. Profit cannot be set as a fixed monetary amount.\n\n2.2.15. A Sharika/Musharaka contract may provide for a change in the partners' share in profit distribution on the date of its distribution or the right of a partner to assign part of the profit due to him to another partner on the day of profit distribution. The parties may agree on profit distribution disproportionately to the partners' capital contributions. However, the passive partner's (if any, according to the terms of the contract) profit share ratio cannot be higher than his capital contribution ratio.\n\n(As amended by the Resolution of the Board of the National Bank of the Kyrgyz Republic dated May 31, 2017 No. 21/10)\n\n2.2.16. The bank is not entitled to voluntarily accept the losses of other partners. But in a Sharika/Musharaka contract, the bank may provide for the right of other partners to voluntarily accept, without any prior condition, responsibility for losses at the moment they arise.\n\n(As amended by the Resolution of the Board of the National Bank of the Kyrgyz Republic dated November 16, 2022 No. 2022-P-12/70-1)\n\n2.2.17. Partners are allowed to agree on the use of any method of profit distribution, regardless of whether it is constant or not, for example, to agree that the size of the profit share at the first stage of contract execution will be one, and at the second stage - another, depending on the discrepancy between the two periods or the amount of profit received. This is allowed provided that the use of such a method does not lead to a situation where one of the partners is excluded from participating in the profit.\n\n(As amended by the Resolution of the Board of the National Bank of the Kyrgyz Republic dated December 20, 2023 No. 2023-P-12/80-3)\n\n2.2.18. Profit must be distributed based on actual results, without taking into account expected future profits from the company's activities.\n\n2.2.19. It is not allowed to include in the terms or method of profit distribution under a Sharika/Musharaka contract any provision or condition that may lead to a violation of the principle of profit
distribution. Any condition or method of profit distribution that may lead to such a result will invalidate the contract.\n\n2.2.20. Partners are not allowed to provide in the contract a provision according to which one or more partners may receive a fixed amount from the profit or an amount calculated as a percentage of the capital of the company created on the basis of a Sharika/Musharaka contract.\n\n2.2.21. It is allowed to agree that if the amount of profit received is higher than a certain maximum threshold, which the parties may set in advance, the excess profit may be transferred to a specific partner. The parties may also agree that if the profit does not exceed the maximum amount or is below such an amount, the profit is distributed in accordance with their agreement.\n\n2.2.22. Upon termination of the partnership or its liquidation, profit may be finally distributed based on proceeds from the sale of all existing assets of the company created on the basis of a Sharika/Musharaka contract, at market value.

2.2.23. It is permitted to distribute any funds to any party in advance, i.e., before actual or constructive assessment, provided that final actual settlements take place at a later stage. In this case, the parties are obliged to compensate the company for any amount they received in excess of their entitled share of profit after actual or constructive assessment.

2.2.24. If the subject of a Musharaka/Musharaka contract is assets acquired for lease (leasing) that will generate income, or if the subject of the contract is services that will generate receipts, the amount is distributed annually to partners in advance and is subject to settlement and compensation at the end of the Musharaka/Musharaka contract term.

2.2.25. It is permitted, based on the charter or decision of the parties, not to distribute the company's profit or to periodically retain a certain amount of profit as a solvency reserve or a reserve to cover capital loss (investment risk reserve).

2.2.26. It is permitted to agree and set aside part of the profit for charitable donations.

2.2.27. The parties may conclude a Musharaka/Musharaka contract for a specific term or without specifying a term, or establish conditions that serve as grounds for terminating or canceling the contract.

Each partner has the right to terminate the Musharaka/Musharaka contract (i.e., withdraw from the company) after providing proper notice to his partner(s). In this case, he has the right to his share contributed to the capital/assets of the company, and his withdrawal does not lead to the termination of the partnership of the remaining partners.

In the case of a term contract, the parties are permitted to agree on early termination of the partnership. In all such cases, obligations and actions performed by partners before the termination of the contract remain unchanged and continue to exist.

2.2.28. A partner is permitted to give an undertaking to buy, either during the period of the company's existence or at the time of its liquidation, all assets of the company created on the basis of a Musharaka/Musharaka contract at their market value or by agreement on the date of purchase. It is not permitted to give an undertaking to acquire assets of a company created on the basis of a Musharaka/Musharaka contract at a nominal value determined in advance.

2.2.29. An enterprise created on the basis of a Musharaka/Musharaka contract ceases its activities upon expiration of the contract term or before that date if the partners decided to terminate it early, or in the case of an enterprise created for a specific business, after the actual liquidation of assets that constitute the subject of the partnership agreement. Termination of a Musharaka/Musharaka contract may occur in the case of anticipated liquidation. In this case, the Musharaka/Musharaka contract is considered completed, and the parties, if they wish, start a new partnership, through which assets not sold during actual liquidation but assessed based on anticipated liquidation are considered the capital of the new enterprise.

If liquidation is associated with the expiration of the contract term, all existing assets are sold in accordance with current market prices, and the proceeds from their sale are used for the following purposes:

a) for liquidation costs;

b) for payment of financial obligations from the net assets of the enterprise;

c) for distribution of remaining assets among partners in accordance with their share in the capital/assets of the company. If there are not enough assets, and the parties cannot return their entire invested capital, the assets are distributed proportionally to their share in the company's capital.

2.2.30. A company established for the purpose of providing services is created on the basis of a contract between two or more partners for the provision of services related to a specific profession or qualified labor, or for the provision of certain services or professional services, as well as for the manufacture of goods. Partners distribute profit according to the agreed ratio.

2.2.31. A company created on the basis of a partnership for the provision of services does not have monetary capital. Partners may distribute among themselves various types of services provided and may assign some or all partners to provide a number of services or a specific service in such a way as to achieve interaction for the provision of the entire volume of services.

2.2.32. Profit is distributed among partners in accordance with the agreed ratio, but the contract cannot provide for a provision according to which a specific partner is paid a certain fixed amount from the received profit.

2.2.33. If production facilities are necessary for a company established on the basis of a partnership for the provision of services, each party is permitted to provide the necessary production facilities required for the provision of services. In this case, each partner has ownership rights to the production facilities he provided. Partners may contribute funds for the acquisition of necessary equipment or tools based on joint ownership. It is also permitted for a party participating in a Musharaka/Musharaka contract to provide production facilities necessary for the company for remuneration, which will be charged to the current expenses of the company.

2.2.34. Contracts/partnerships used in the agricultural sector:

Musakat contract (irrigation partnership) is a contract under which one party provides certain agricultural trees/plants to another party carrying out care for them, with the condition of dividing the harvest/fruits between the parties according to shares determined at the time of concluding the contract.
Muzara'a contract is a contract under which one party provides land to another party for organizing agricultural work for a share of the harvest agreed upon at the time of concluding the contract.
Mugarrasa contract is a contract under which one party provides treeless land to another party for planting trees on it with subsequent division of trees and harvest/fruits in accordance with the coefficient agreed in the contract.

(As amended by the Resolution of the Board of the National Bank of the Kyrgyz Republic dated August 14, 2019 No. 2019-P-1 2/42-2)

2.2.35. For the proper implementation of financing in accordance with Islamic principles of banking and finance for the development of agriculture, it is necessary to follow Sharia standards, and there must be employees in the bank with the appropriate knowledge to apply them in their work.

(As amended by the Resolution of the Board of the National Bank of the Kyrgyz Republic dated August 14, 2019 No. 2019-P-12/42-2)

2.2.36. The essential conditions of the Decreasing Musharaka contract are:

a) the name, as well as a sufficient description for identification of the subject of the contract;

b) the rights and obligations of the parties related to the acquisition and transfer of the subject of the contract;

c) the amount, procedure, terms and deadlines for making payments.

The Decreasing Musharaka contract is concluded in written form or in the form of a digital document.

The Decreasing Musharaka contract is subject to notarization and state registration in cases provided for by the legislation of the Kyrgyz Republic.

2.2.37. The cost of another partner's share in the partnership or property may be divided into certain shares by agreement of the parties. Accordingly, payments made by the partner may be divided into certain shares and made at times agreed by the parties, until he buys out all shares in the partnership or in the property and becomes the sole owner.

2.2.38. The bank has the right to timely receipt of payments in accordance with the conditions stipulated in the contract. The Decreasing Musharaka contract may provide for such a condition, according to which a partner unjustifiably delaying payment pays a certain amount or an additional share of the required payment amount. Payment of such an amount in excess of the required payments is directed to charitable purposes in accordance with the bank's internal policy approved by the Sharia Board.

2.2.39. For the use of the bank's share of the property, the partner pays rent, the amount of which decreases proportionally to the share of the bank acquired by the partner.

The partner may conclude a lease agreement for the property with a third party with the consent of the bank, taking into account the requirements of the legislation of the Kyrgyz Republic and Sharia standards.

2.2.40. Ownership rights to the bank's share of the property under the Decreasing Musharaka contract may be transferred to the partner after buying out 20% or more of the share of the property.

Property under the Decreasing Musharaka contract may serve as collateral in accordance with the legislation of the Kyrgyz Republic.

2.2.41. The Decreasing Musharaka contract may be terminated:

a) by mutual agreement of the partners;

b) upon expiration of the contract term;

c) in the case of destruction/destruction (loss) of the subject of the contract and impossibility of further use. In this case, remaining payments are not made, and losses and insurance compensation are distributed between partners according to their shares;

d) on other conditions provided for by the legislation of the Kyrgyz Republic.

(As amended by the Resolution of the Board of the National Bank of the Kyrgyz Republic dated September 24, 2026 No. 2026-P-12/47-4)

Chapter 2.3

Murabaha Contract

2.3.1. A Murabaha contract is a contract providing for the sale to the client of goods purchased by the bank at the client's request, or belonging to the bank at the time of the client's application, on an installment basis. The sale price of the subject of the Murabaha contract to the client consists of the sum of the purchase price of the goods, the bank's markup, payments to a third party (transportation costs, insurance, mandatory state payments and other mandatory payments to third parties). The markup may be set as:

a fixed lump-sum payment;
a share of the cost of the goods.

When selling goods to the client under a Murabaha contract, the bank must be the owner of the goods.

A Murabaha contract is concluded in written form or in the form of an electronic document signed by means of an electronic signature that allows verifying its belonging to the party to the contract, with all attachments to them. The contract is subject to notarization and state registration in cases provided for by the legislation of the Kyrgyz Republic. Ownership rights to the goods pass after full payment of the price (at its discretion, the bank may decide to transfer ownership rights to the goods before full payment of the price of the goods). In the event that ownership rights are subject to state registration, registration is carried out upon transfer of ownership rights (before or after full payment). If the contract on alienation of property is subject to state registration, ownership rights of the acquirer arise from the moment of its registration.

Payments for goods purchased by the client under a Murabaha contract may be made by regular contributions on a short-term or long-term basis. After concluding the contract, the bank cannot demand additional payments due to delay or extension of the payment term arising for any reason or without reason.

(As amended by the Resolutions of the Board of the National Bank of the Kyrgyz Republic dated May 31, 2017 No. 21/10, November 16, 2022 No. 2022-P-12/70-1, December 20, 2023 No. 2023-P-12/80-3)

2.3.2. An essential condition of the Murabaha contract is the mandatory indication and separation in the sale price of the amount of the markup.

(As amended by the Resolution of the Board of the National Bank of the Kyrgyz Republic dated November 16, 2022 No. 2022-P-12/70-1)

2.3.3. A Murabaha contract is carried out on the basis of an application to the bank by a potential client wishing to purchase a specific good from the bank.

In the application, the client indicates the name of the goods, the approximate price at which he is ready to purchase them, as well as the terms of purchase and, as a rule, installment payment. The client may also indicate the seller from whom the bank can purchase the goods. The bank has the right to independently choose the seller if there are more acceptable offers from other sellers.

(As amended by the Resolutions of the Board of the National Bank of the Kyrgyz Republic dated November 16, 2022 No. 2022-P-12/70-1, December 20, 2023 No. 2023-P-12/80-3)

2.3.4. The bank concludes a sales contract with a specific seller, in which it is indicated that the bank buys the goods for subsequent sale to the client under a Murabaha contract.

2.3.5. It is not allowed to conclude a sales contract if the client was bound by any prior contractual obligations regarding the goods that are the object of purchase and subsequent sale under a Murabaha contract.

The seller must be a third party with respect to the client and the bank. It is not allowed for the client or his agent to act as both the seller in the sales transaction and the client under the Murabaha contract with the bank.

In exceptional cases, the bank may purchase goods from a party who is a close relative of the client, provided there is a right of sale and repurchase.

The bank has the right, after purchasing goods from the seller, to establish the possibility of their return within a certain period. If the client does not buy out the goods from the bank, the bank may return the goods to the supplier within a certain period, by agreement of the two parties. This possibility remains in force until the goods are bought out from the bank.

(As amended by the Resolution of the Board of the National Bank of the Kyrgyz Republic dated May 31, 2017 No. 21/10)

2.3.6. In the sales contract with the supplier of goods, the following are indicated:

names of the parties;
subject of the contract;
name of the goods;
quantity of goods, price, payment terms and conditions;
delivery terms;
rights and obligations of the parties;
penalties for non-performance of obligations;
method of security;
other conditions.

The bank may conclude a sales contract independently or through an agent. As an agent, the bank may appoint the client, in which case the client acts on behalf of, in the name of, and by order of the bank, on the terms stipulated in the agency contract, which must reflect the following: subject of the contract, names of the parties and goods, terms, payment deadlines, documents confirming the purchase and sale transaction, other conditions.

In the case when the client acts as an agent, the following conditions must be observed:

a) the bank itself must pay the Seller for the goods without crediting funds to the account of the client acting as an agent. The bank may provide funds to the client acting as an agent only in the following cases:

if the seller of the goods is an individual entrepreneur operating in accordance with the current legislation of the Kyrgyz Republic;
when the goods are purchased outside the Kyrgyz Republic;

b) the bank must take documentary confirmation from the seller about the sale.

The bank is permitted to provide for cases of appointing an agent to purchase goods on behalf of the agent, but in the interests of the bank. The bank's internal documents must define the powers and responsibilities of the relevant bodies of the bank for making decisions and approving cases of appointing an agent to make a purchase in his own name, but in the interests of the bank.

All documents and contracts related to the sale-purchase of goods must be in the name of the bank, except in cases where the bank authorized the agent to make a purchase directly in the name of the agent.

The bank must receive the goods from the territory of the supplier or any other place that was indicated in the delivery conditions.

The bank bears the costs of delivering the goods. These costs are subsequently included in the cost of the goods.

The bank takes on responsibility as the owner of the goods and bears subsequent risks that can be insured. Insurance compensation that arises before the sale of goods to the client belongs entirely to the bank.

Insurance costs are included in the price of goods purchased under a Murabaha contract.

The total balance of funds issued for the acquisition of goods by clients acting as agents under agency contracts must not exceed 20% of the bank's financing portfolio for Murabaha operations.

(As amended by the Resolution of the Board of the National Bank of the Kyrgyz Republic dated December 20, 2023 No. 2023-P-12/80-3)

2.3.7. To ensure proper performance by the client of the obligation to conclude and execute a Murabaha contract, the bank must conclude a pledge agreement for monetary funds or accept another type of pledge with the client. The monetary amount transferred as a pledge cannot be invested by the bank if permission was not obtained from the client.

The bank is obliged to return the pledge after the client fulfills the Murabaha contract. The deposited pledge amount may be credited towards payment in accordance with the Murabaha contract upon the client's application.

The bank bears risks related to damage to the goods during transportation or storage until transfer to the client's possession, and they cannot be covered from the pledge.

In the event of the client's breach of obligation, the bank has the right to sell the purchased goods to third parties. If the actual sale price was lower than the price at which the bank acquired the goods, the bank has the right to deduct the specified difference from the pledge amount and return the remainder to the client.

The bank may take an advance payment after concluding a Murabaha contract for the purchaser of the goods. However, the bank is not entitled to charge an advance payment during the preparation of contracts at the stage when the client has given an undertaking to buy the goods.

If the seller of the goods was chosen by the client himself, the bank must include in the contract the following conditions:

a) on the provision by the client of security for the proper performance of the sales contract for goods by the seller;

b) on the reimbursement by the client of all losses of the bank arising from the non-performance of the contract by the seller, including possible court costs, including from security, if the seller does not perform the sales contract. This condition must apply even if the Murabaha agreement was not concluded.

When concluding a Murabaha contract, all conditions for carrying out the trade operation should be provided for, including:

markup - remuneration that the bank will receive from this transaction;
the sale price;
a condition that all expenses are included in the sale price by the bank, including payments to a third party, except for expenses on paying salaries to bank employees.

At the same time, the sale price and markup cannot be set indefinitely, for example, the sale price and markup should not depend on any indicators that will be known in the future. It is permissible if the sale price and markup are set depending on indicators at the stage of the agreement so that the bank's markup is known to the client in advance before signing the Murabaha contract. The size of the markup cannot depend on temporal factors.

The bank may include the following conditions in the Murabaha contract:

a) that the bank is not responsible for any or all defects of the goods after the goods pass into the client's possession. If necessary, the client has the right to apply directly to the supplier for compensation;

b) that the bank has the right to sell goods to a third party upon the client's refusal to accept the goods after the Murabaha contract enters into force, with reimbursement by the client of the missing amount to cover the bank's expenses.

The bank is not entitled to conclude Murabaha contracts:

a) on deferred obligations related to precious metals (gold, silver) and any currency;

b) with working capital, where the security of assets is accounts receivable;

c) in refinancing obligations.

The parties to a Murabaha contract are prohibited from participating in a Musharaka/Musharaka contract or in a contract containing an undertaking by one party to buy out the participation (share) of the other party in a Musharaka/Musharaka contract by means of a Murabaha contract for cash or deferred obligations.

(As amended by the Resolutions of the Board of the National Bank of the Kyrgyz Republic dated May 31, 2017 No. 21/10, November 16, 2022 No. 2022-P-12/70-1)

2.3.8. Payment under a Murabaha contract is made by the client in accordance with the conditions of the contract.

The bank may require the client to repay early in the event of unjustified delay of the next installment, provided that the client is notified in advance of the payment deadlines.

If the client has not made full payment of the price, the bank does not register ownership rights to the goods in the client's name until the installments are paid in full.

The bank may sell the goods if the client delays payments for more than the period specified in the contract. If the bank sells the goods to a third party, the client is reimbursed for those payments that have already been received from him.

In the event that security is provided by the client to the bank, the bank, at the client's direction, may sell the pledge to cover the debt under the Murabaha contract without going to court.

In the event of delay in payments by the due date, the client is obliged, in accordance with the Murabaha contract, to direct the amount established by the contract to charitable purposes.

2.3.9. Commission remuneration and fees for the opportunity to provide financing from the client by the bank are not charged.

Expenses for preparing documents for the contract are shared between the bank and the client, if they have not agreed that one of the parties will pay for the expenses. It must be observed that all expenses are indicated fairly and reflect the volume of work performed.

If the Murabaha contract is carried out through syndicated financing, the bank acting as the organizer of syndicated financing has the right to claim the remuneration due, which must be paid to the participants of the syndicated financing.

The bank may charge for the preparation of a technical and economic justification if it is prepared at the request of the client and for his benefit, and the client has agreed to pay the bank.

2.3.10. The bank's initial direct costs (commission to the intermediary, fee for legal services, etc.) related to the conclusion of the contract for the acquisition of the subject of the Murabaha contract from the supplier are recognized as current period expenses.

2.3.11. Subsequent costs of the bank related to the acquisition of goods, as well as transportation costs, duties and other expenses are included in the purchase price of the goods.

2.3.12. In accordance with the conditions of the concluded contract for the sale of goods to the client, the bank recognizes a loan issued to the client in the amount that the client is obliged to pay to the bank in accordance with the contract.

When carrying out this transaction, the bank must pay special attention to country and transfer risks, issues of supplier and insurer reliability, as well as the safety of delivery of goods.

Chapter 2.3.1

Commodity Murabaha Transaction

(Chapter as amended by the Resolution of the Board of the National Bank of the Kyrgyz Republic dated March 28, 2018 No. 2018-P-12/10-6)

2.3.1.1. Commodity Murabaha (Tavarrook) is a transaction concluded for the purpose of obtaining monetary funds, consisting of two contracts: purchase of goods with deferred payment on the terms of a Murabaha contract and subsequent sale of these goods to a third party who is not the original seller, for immediate payment.

(As amended by the Resolution of the Board of the National Bank of the Kyrgyz Republic dated March 28, 2018 No. 2018-P-12/10-6)

2.3.1.2. Commodity Murabaha (Tavarrook) transaction is used by the bank as a tool for attracting monetary funds, including investments. This transaction cannot be used as a tool for attracting monetary funds from bank clients.

Commodity Murabaha (Tavarrook) transaction may be considered as a tool for placing monetary funds for one of the parties to the transaction in the event that the parties to the transaction are financial and credit organizations.

A commodity Murabaha (Tawarruq) transaction may be used by a bank as a financing instrument for a legal entity or an individual entrepreneur registered in the manner prescribed by legislation (hereinafter - the legal entity), provided that one of the following conditions is met:

providing financing using types of transactions and contracts other than a commodity Murabaha (Tawarruq) transaction does not allow achieving the financing goal;
the transaction is concluded due to the inability to ensure liquidity, or to cover a deficit of liquid cash funds, or to avoid losses for its clients;
the purpose of the transaction is the refinancing of the legal entity's loans due to the fact that the bank received a reasoned decision from the legal entity about a complete transition to services provided in accordance with Islamic financing principles.

(As amended by the Resolution of the Board of the National Bank of the Kyrgyz Republic dated September 23, 2020 No. 2020-P-12/51-1)

2.3.1.3. When selling goods, the party selling the goods must be the owner of the goods.

(As amended by the Resolution of the Board of the National Bank of the Kyrgyz Republic dated March 28, 2018 No. 2018-P-12/10-6)

2.3.1.4. Funds received as a result of a commodity Murabaha transaction must be used in operations corresponding to Shariah standards.

(As amended by the Resolution of the Board of the National Bank of the Kyrgyz Republic dated March 28, 2018 No. 2018-P-12/10-6)

2.3.1.5. Contracts for a commodity Murabaha transaction are concluded in written form. Links between the obligations of the parties under two contracts (a contract for the purchase of goods with deferred payment and a contract for sale for immediate payment) are not permitted.

(As amended by the Resolution of the Board of the National Bank of the Kyrgyz Republic dated March 28, 2018 No. 2018-P-12/10-6)

2.3.1.6. The buyer of the goods (object of commodity Murabaha) must be a person who is not the seller, from whom the goods were purchased with deferred payment (the goods must be sold to a third party).

(As amended by the Resolution of the Board of the National Bank of the Kyrgyz Republic dated March 28, 2018 No. 2018-P-12/10-6)

2.3.1.7. At the time of concluding the transaction, the goods must be available to the seller, be in his ownership, and be specified. This is done either by separating the goods or by indicating the details of documents identifying the goods (certificate number, waybills, etc.). In the absence of goods at the place of concluding the transaction, it is necessary to additionally provide the buyer with data on the goods in the form of a specification or samples, as well as information on the volume of goods and their location, so that the purchase of goods by the buyer was valid, not fictitious.

(As amended by the Resolution of the Board of the National Bank of the Kyrgyz Republic dated September 23, 2020 No. 2020-P-12/51-1)

2.3.1.8. When concluding a commodity Murabaha transaction, the buyer of the goods may appoint the seller, from whom the goods were purchased with deferred payment, or his representative as an agent for the sale of goods purchased from this seller (or his representative). In such cases, the agency contract must be concluded after the buyer takes possession of the goods.

(As amended by the Resolution of the Board of the National Bank of the Kyrgyz Republic dated March 28, 2018 No. 2018-P-12/10-6)

2.3.1.9. A commodity Murabaha transaction cannot be concluded with respect to gold, silver, or various types of currency.

(As amended by the Resolution of the Board of the National Bank of the Kyrgyz Republic dated March 28, 2018 No. 2018-P-12/10-6)

2.3.1.10. A commodity Murabaha (Tawarruq) transaction may be used as a hedging instrument for currency risk in compliance with the requirements of this chapter, as well as the following:

transactions are concluded with exchange goods;
a commodity Murabaha (Tawarruq) transaction in one currency and a reverse commodity Murabaha transaction in a currency different from the first are not linked to each other. Non-performance of one transaction does not lead to the annulment of the second transaction concluded between the parties;
the terms of performance of the two transactions must coincide.

(As amended by the Resolution of the Board of the National Bank of the Kyrgyz Republic dated September 23, 2020 No. 2020-P-12/51-1)

2.3.1.11. The Shariah Council of the bank must make a decision on the cases of application and restrictions on application, as well as the conditions for applying a commodity Murabaha (Tawarruq) transaction.

(As amended by the Resolution of the Board of the National Bank of the Kyrgyz Republic dated September 23, 2020 No. 2020-P-12/51-1)

Chapter 2.4

Ijara Contract

(Name of the chapter in the edition of the Resolution of the Board of the National Bank of the Kyrgyz Republic dated November 16, 2022 No. 2022-P-12/70-1)

2.4.1. An Ijara contract is a contract according to which the lessor provides the lessee with the lease (rental) of property for an agreed period for a certain fee, which the lessor acquires in ownership upon the client's application, or which is in the ownership of the lessor at the time of the lessee's application, or property for which the lessor acquires the right to use upon the application of the lessee.

Also, an Ijara contract may imply financing of services, according to which, upon the application of the lessee, the lessor acquires the right to receive services with subsequent provision of this right to the lessee for an agreed period for a certain fee.

(As amended by the Resolution of the Board of the National Bank of the Kyrgyz Republic dated November 16, 2022 No. 2022-P-12/70-1)

2.4.2. Lessee - a physical or legal entity that, in accordance with the Ijara contract, accepts the subject of the contract for a certain fee for a certain period and under certain conditions for temporary possession and use.

Lessor - a bank that, at its own and/or borrowed funds, acquires property in ownership during the implementation of the Ijara contract and provides it as the subject of Ijara to the lessee for a certain fee, for a certain period and under certain conditions for temporary possession/use with or without the transfer of ownership rights to the subject of the contract to the lessee.

Seller - a physical or legal entity that, in accordance with the sales contract concluded with the lessor, sells him property in the established period, which is the subject of Ijara. The seller may simultaneously act as a lessee within the framework of one Ijara contract.

Rental payments - this is the fee for possession and use of the subject of the Ijara contract. These payments include compensation for the lessor's costs associated with the acquisition and transfer of the subject of Ijara to the lessee, compensation for costs associated with providing other services provided for by the contract, as well as the lessor's income.

2.4.3. An Ijara contract is concluded by the bank based on the client's application, as well as financial and legal documents necessary for making a decision to conclude the contract.

To make a decision to conclude an Ijara contract, the bank must assess the lessee's ability to pay rental payments, as well as assess the liquidity of the property to identify opportunities for re-leasing the property or its sale.

(As amended by the Resolutions of the Board of the National Bank of the Kyrgyz Republic dated December 21, 2016 No. 49/8, November 16, 2022 No. 2022-P-12/70-1)

2.4.4. With a positive decision by the bank, the lessee provides an obligation to rent the property.

The lessee pays a certain amount agreed by the parties as a guarantee of fulfilling the promise - to take the property into rent. The paid amount is used to compensate for damages in case of the lessee's breach of the promise, as well as, with the consent of the lessee, as a prepayment for the acquisition of property under a sales contract for the acquired property or as an advance payment for rental payments.

With the agreement of the lessee, the lessor may use the specified amount of funds for investment based on a Mudaraba contract. This amount may be accepted as payment for the next rental payments.

(As amended by the Resolutions of the Board of the National Bank of the Kyrgyz Republic dated November 16, 2022 No. 2022-P-12/70-1, December 20, 2023 No. 2023-P-12/80-3)

2.4.5. The subject of an Ijara contract may be movable (except for money, securities, and consumable property) and immovable property or services, which can be used provided that the extracted benefit does not contradict the legislation of the Kyrgyz Republic and Shariah standards.

(As amended by the Resolution of the Board of the National Bank of the Kyrgyz Republic dated November 16, 2022 No. 2022-P-12/70-1)

2.4.6. Rented property must be used ensuring its preservation, and the benefits received from the execution of the Ijara contract must comply with the legislation of the Kyrgyz Republic and Shariah requirements.

2.4.7. The subject of an Ijara contract may be a share in specific assets, which are held together with the lessee, regardless of whether the lessee is a partner of the lessor or not. In this case, the lessee may receive benefits from the rented share in the same way as the lessor uses it, i.e., by a time-sharing regime or by defining a certain part of the property.

2.4.8. The lessor is responsible for any defects caused to the rented property, which worsen the quality of the property, and liability for any deterioration that the rented property may undergo as a result of its own actions, or as a result of the impact of events beyond his control, but affecting the benefits that were supposed to be received under the Ijara contract.

2.4.9. If the benefit from the rented property is reduced completely or partially as a result of the lessee's wrongful actions during the lease of this property, then the lessee is obliged to eliminate the obstacles to the lessee receiving benefits. In this case, the lease term is extended for the period during which the lessee could not receive benefits from the rented property, and the lessee must not refuse the lease during the period of lost benefits.

2.4.10. The lessor carries out major technical maintenance. The lessee must perform current or periodic (ordinary) technical maintenance.

2.4.11. The lessor is responsible for the rented property during the period of the Ijara contract, if the lessee does not commit any wrongful actions or negligence regarding the rented property.

If insurance of the property is mandatory under legislation, the lessor must insure it in accordance with Shariah standards. In the event that insurance of the property in accordance with Shariah standards is impossible, the property may be insured by traditional methods with the corresponding approval of the bank's Shariah Council. Insurance costs are included in the rent. After signing the contract, the lessor cannot charge the lessee any funds exceeding the established amount of rent. The lessor may also appoint the lessee as an agent to insure the property at the expense of the lessor.

(As amended by the Resolution of the Board of the National Bank of the Kyrgyz Republic dated March 28, 2018 No. 2018-P-12/10-6)

2.4.12. To fulfill the Ijara contract, the bank acquires property in ownership. The property may be purchased from a person who will subsequently become the lessee, and then leased to this person.

2.4.13. The lessee may conclude a sublease contract on terms different from the lease contract, with notification to the lessor.

2.4.14. The lessee may lease the property to its owner at the first stage of the lease for a rent that is lower, equal to, or higher than what he pays, if both rental payments are paid based on immediate delivery and immediate payment. Counter-payments cannot be higher due to deferred payment.

2.4.15. The lessor may purchase or manufacture the property described in the specifications upon the application of the lessee.

The lessee has the right to refuse the property that does not correspond to the specifications.

2.4.16. The lessee together with the bank may acquire property that he plans to lease. Accordingly, the rent will be paid by the lessee for the share that he does not own.

2.4.17. The bank may appoint the lessee or a third party as an agent to acquire property for an agreed order and price for further transfer to lease to the lessee.

2.4.18. An Ijara contract is concluded in written form or in the form of an electronic document signed by means of an electronic signature that allows verifying its belonging to the party to the contract, with all their attachments. The contract is subject to notarization and state registration in cases provided for by the legislation of the Kyrgyz Republic.

(As amended by the Resolution of the Board of the National Bank of the Kyrgyz Republic dated December 20, 2023 No. 2023-P-12/80-3)

2.4.19. The essential components of an Ijara contract are:

a) name, as well as a sufficient for identification description of the subject of Ijara;

b) rights and obligations of the parties related to the acquisition and transfer of the subject of Ijara;

c) amount, procedure, terms and deadlines for rental payments;

d) indication of the party that selects the subject of Ijara and the seller;

e) other terms.

2.4.20. If the lessor does not provide the property to the lessee within the time specified in the Ijara contract, rent is not paid for the period between the date the contract enters into force and the actual date of providing the property to the lessee. Rent is correspondingly reduced if the parties did not agree that the lease term will be extended for a period equivalent to the period of non-provision of property, after the initial end date of the contract.

2.4.21. The customer makes an advance payment, which the lessor may retain in case of non-performance of the Ijara contract due to the lessee's fault in order to compensate for damages.

2.4.22. The lessor has the right to conclude several Ijara contracts regarding the same property leased for different periods to several lessees provided that these two contracts are not performed simultaneously regarding the same property and at the same time period.

2.4.23. An Ijara contract may be concluded with several lessees having the right to the same benefit regarding some property for the lease period, without defining a specific time period for a specific person. In this case, each lessee may receive benefits from the property during the period allocated to him, according to the rules provided between the lessees.

2.4.24. Rent may be paid in money, in kind (goods) or some benefit (services). Rent is established either as a one-time payment including the period of the Ijara contract, or as partial payments for certain periods of the contract. Rent may be defined as a fixed amount or may be reviewed by agreement of the parties.

2.4.25. Rent is mandatory according to the contract, and the lessor's right to receive rent arises from the moment when the lessee begins to receive benefits from the lease of property or when the lessor provides the lessee with the right to receive benefits from the rented property.

2.4.26. In the event that rent is subject to review, it is necessary to provide for the amount of rent for the first period of the Ijara contract. It is permissible to determine the amount of rent for subsequent periods according to a certain comparison base. The basis for such a comparison may be an exact procedure, not subject to dispute and being a determining factor for determining the amount of rent for the remaining periods. This comparison base may provide for its own specific threshold: both maximum and minimum.

2.4.27. By agreement of the parties, part of the rent may be paid to the lessor, the other part directed to cover certain expenses approved by the lessor, such as: cost of major technical maintenance, insurance, etc.

2.4.28. The two parties may agree to change the amount of rent for future lease periods, i.e., periods in which the lessee has not yet received any benefits from the lease, by reviewing the terms of the Ijara contract. Rent not paid for any previous periods becomes a debt that the lessee must pay to the lessor, therefore it cannot be increased.

2.4.29. To secure the payment of rental payments and to exclude careless attitude towards the rented property, the lessee provides a guarantee (pledge) in the form of liquid assets.

2.4.30. The bank has the right to demand early repayment of rental payments from the client in case of unjustified delay of the next rental payment installment, provided that the client is reminded of the payment deadlines.

2.4.31. Both parties may agree on immediate payment of rent. Rent may be paid in partial payments, in this case, the lessor may provide a provision according to which the lessee must immediately make payment of the remaining payments if, after receiving the corresponding notice of the need to make payment for a certain period, he delays a partial payment without a reasonable reason. Payment of the remaining payments before the agreed term related to non-performance of obligations is settled at the end of the Ijara contract period or, if the Ijara contract terminates earlier, at the moment of such termination. Any extension of the contract period by the lessor after the end of the specified period for immediate payment is considered consent to defer payment for the extended period, not the right of the lessee.

2.4.32. The lessor cannot increase the agreed rent in case of the lessee's delay in payment.

2.4.33. The Ijara contract or Ijara Muntahia Bittamlik may provide for such a provision according to which the lessee, unjustifiably delaying payment, pays a certain amount or an additional share of the due amount of rent. Payment of such an amount in excess of the due rent is directed to charitable purposes in accordance with the bank's internal policy approved by the Shariah Council.

In the event of loss of the right to receive the guarantee provided by the lessee, the lessor may deduct from such sums only the amount that is due to him as rent for previous periods, and not all sums of partial rental payments, including payments, the obligations for which have not yet arisen for periods for which the lessee has not yet received benefits from the rented property. The lessor may also deduct from the amount of the guarantee compensation that the lessee must pay for breach of contract.

(As amended by the Resolution of the Board of the National Bank of the Kyrgyz Republic dated March 28, 2018 No. 2018-P-12/10-6)

2.4.34. The lessor may sell the rented property to a third party, notifying him of the existence of the Ijara contract. At the same time, all rights and obligations under the contract will pass to the new owner.

2.4.35. In the event of destruction/death of the rented property, the Ijara contract terminates, and the remaining rental payments are not paid.

(As amended by the Resolution of the Board of the National Bank of the Kyrgyz Republic dated March 28, 2018 No. 2018-P-12/10-6)

2.4.36. The lessee is responsible for damages arising to the lessor due to the lessee's fault.

2.4.37. In the event of partial damage to the property, leading to a reduction in planned income, the lessee has the right to terminate the Ijara contract. Also, the parties may agree in this case to change the amount of rent, but in this case, rental payments are not charged for the period of lost benefits. The lessor must provide similar property for further implementation of the Ijara contract, otherwise the contract terminates.

2.4.38. If the lessee stops using the rented property or returns it to the owner without his consent, then the rent remains payable to the owner for the remaining period of the Ijara contract, and the lessor cannot lease it to another lessee during this period of the contract, but must keep the property at the disposal of the current lessee.

2.4.39. An Ijara contract may be terminated:

by mutual consent;
upon expiration of the Ijara contract term;
upon sale of the property to the lessee;
for other reasons beyond the control of the parties.

(As amended by the Resolution of the Board of the National Bank of the Kyrgyz Republic dated November 16, 2022 No. 2022-P-12/70-1)

2.4.40. An Ijara Muntahia Bittamlik contract is a contract (including the conditions of the Ijara contract), according to which the client undertakes to purchase the rented property in accordance with the terms of the contract.

(As amended by the Resolution of the Board of the National Bank of the Kyrgyz Republic dated November 16, 2022 No. 2022-P-12/70-1)

2.4.41. In an Ijara Muntahia Bittamlik contract, the transfer of ownership rights to the rented property is confirmed by a document separate from the Ijara contract, by means of the lessor's obligation:

a) to sell for a symbolic or other agreed fee or by means of progressive payment of the remaining part of the rent or by paying the market value of the rented property;

b) to gift it without specifying a reason (unconditionally);

c) to gift it after payment of the remaining payments.

In all the above cases, a separate document proving the obligation to gift the property, sell it, or gift it after the occurrence of a certain event, must be drawn up separately from the Ijara Muntahia Bittamlik contract. It cannot be considered an integral part of the Ijara contract.

2.4.42. The obligation to transfer ownership rights for the lessor under an Ijara Muntahia Bittamlik contract is mandatory, while a separate two-party contract is not concluded.

2.4.43. Transfer of ownership rights is carried out based on a gift or sales contract, which is concluded separately from the Ijara contract and the provided promise.

2.4.44. In the event of concluding a contract with a suspensive condition, upon fulfillment of the conditions, a new contract for the transfer of ownership rights is not concluded.

If even one payment is not paid, ownership of the property is not transferred.

2.4.45. The rules governing the Ijara contract must also apply to the Ijara Muntahia Bittamlik contract, i.e., the lessor has given an obligation to transfer ownership of the rented property to the lessee.

2.4.46. Transfer of ownership rights to the rented property cannot be carried out by implementing a sales contract in parallel with the Ijara contract, since the sales contract comes into force on a specific date in the future.

2.4.47. If the rented property is destroyed or if continuing the lease becomes impossible before the end of its term for a reason to which the lessee has no relation, then in both these cases, the rent is adjusted based on the prevailing market value.

2.4.48. An Ijara contract may be terminated unilaterally:

in case of violation of the terms of the Ijara contract;
in case of violation of deadlines or termination of rental payments;
for other reasons specified in the contract.

(As amended by the Resolution of the Board of the National Bank of the Kyrgyz Republic dated November 16, 2022 No. 2022-P-12/70-1)

Chapter 2.4.1. Ijara Service Contract

(Chapter in the edition of the Resolution of the Board of the National Bank of the Kyrgyz Republic dated February 24, 2022 No. 2022-P-12/9-4, name of the chapter in the edition of the Resolution of the Board of the National Bank of the Kyrgyz Republic dated November 16, 2022 No. 2022-P-12/70-1)

2.4.1.1. Ijara Service - a transaction to provide the client with the right to use a service for an agreed period and for a certain fee, consisting of two contracts: 1) a contract on the right to use a service provided by the service provider to the bank; 2) a contract between the bank and the hirer on the provision of the service to the hirer on the terms of sequential payment.

(As amended by the Board of the National Bank of the Kyrgyz Republic resolutions dated February 24, 2022 No. 2022-P-12/9-4, November 16, 2022 No. 2022-P-12/70-1)

2.4.1.2. The Ijara Service contract considers the relationship between the bank and the lessee regarding short-term financing, where a service is leased, and this service must be intangible. The bank will have agreements with various service providers, according to which the bank will lease the services needed by the client directly from the provider and sublease them to the client based on Ijara.

(As amended by the Board of the National Bank of the Kyrgyz Republic resolutions dated February 24, 2022 No. 2022-P-12/9-4, November 16, 2022 No. 2022-P-12/70-1)

2.4.1.3. The Ijara Service contract may be used by financial and credit organizations to provide individuals or legal entities with such services as repair of movable and immovable property, travel, celebration, business development services, education and healthcare services, consulting services, etc.

(As amended by the Board of the National Bank of the Kyrgyz Republic resolutions dated February 24, 2022 No. 2022-P-12/9-4, November 16, 2022 No. 2022-P-12/70-1)

2.4.1.4. The parties to the contract are the lessor and the lessee. The bank acts as the lessor.

(As amended by the Board of the National Bank of the Kyrgyz Republic resolution dated February 24, 2022 No. 2022-P-12/9-4)

2.4.1.5. The subject matter of the Ijara Service contract is the benefit (service or work).

(As amended by the Board of the National Bank of the Kyrgyz Republic resolution dated February 24, 2022 No. 2022-P-12/9-4)

2.4.1.6. The service/work must be clearly defined and clear, objectively feasible, and compliant with Sharia standards.

(As amended by the Board of the National Bank of the Kyrgyz Republic resolution dated February 24, 2022 No. 2022-P-12/9-4)

2.4.1.7. Payment for the service must be established in such a way as to avoid disputes and be in the form of monetary funds. The amount for service payment may be paid in full or in installments.

(As amended by the Board of the National Bank of the Kyrgyz Republic resolution dated February 24, 2022 No. 2022-P-12/9-4)

2.4.1.8. The bank's obligation to pay for the service arises from the moment of signing the contract. The lessee's obligation to pay the bank arises from the moment of receiving the benefit.

(As amended by the Board of the National Bank of the Kyrgyz Republic resolution dated February 24, 2022 No. 2022-P-12/9-4)

2.4.1.9. The bank has the right to demand that the lessee deposit a certain amount as a guarantee of seriousness of intent to fulfill the obligations under the contract. The deposited amount may be used to settle obligations under the contract. In case of the lessee's refusal to fulfill obligations, only the amount of actual expenses is deducted from the deposit.

(As amended by the Board of the National Bank of the Kyrgyz Republic resolution dated February 24, 2022 No. 2022-P-12/9-4)

2.4.1.10. Funds received by the bank as a result of the Ijara Service contract must be used in operations corresponding to Sharia standards.

(As amended by the Board of the National Bank of the Kyrgyz Republic resolutions dated February 24, 2022 No. 2022-P-12/9-4, November 16, 2022 No. 2022-P-12/70-1)

2.4.1.11. Ijara Service transaction contracts are concluded in written form or in the form of an electronic document signed by means of an electronic signature that allows verifying its belonging to the party to the contract, with all attachments to them. At the same time, the contract is concluded only between parties possessing full legal capacity/capacity to act.

(As amended by the Board of the National Bank of the Kyrgyz Republic resolution dated December 20, 2023 No. 2023-P-12/80-3)

2.4.1.12. The parties conclude an Ijara Service contract for a specific term according to the agreement of the parties.

(As amended by the Board of the National Bank of the Kyrgyz Republic resolutions dated February 24, 2022 No. 2022-P-12/9-4, November 16, 2022 No. 2022-P-12/70-1)

2.4.1.13. The Ijara Service contract may be terminated:

by mutual consent of the parties;
upon expiration of the contract term;
in case of violation of agreed conditions and/or cessation of payments for the right to use;
early full performance by the parties of all previously accepted obligations.

(As amended by the Board of the National Bank of the Kyrgyz Republic resolutions dated February 24, 2022 No. 2022-P-12/9-4, November 16, 2022 No. 2022-P-12/70-1)

2.4.1.14. Extension of the Ijara Service contract for a new term is permitted, regardless of whether the extension occurred before or after the expiration of the original term.

(As amended by the Board of the National Bank of the Kyrgyz Republic resolutions dated February 24, 2022 No. 2022-P-12/9-4, November 16, 2022 No. 2022-P-12/70-1)

2.4.1.15. The contract cannot be terminated unilaterally, except in cases of violation of contract conditions or force majeure.

(As amended by the Board of the National Bank of the Kyrgyz Republic resolution dated February 24, 2022 No. 2022-P-12/9-4)

Chapter 2.5

Qard Contract

(Chapter name as amended by the Board of the National Bank of the Kyrgyz Republic resolution dated November 16, 2022 No. 2022-P-12/70-1)

2.5.1. The Qard contract is a transaction under the terms of which one party provides the other party with monetary funds without additional benefit for the party providing the monetary funds.

In this case, the party accepting the monetary funds guarantees the return of funds upon the first request of the other party.

The bank may be both the party accepting the monetary funds and the party providing the monetary funds.

(As amended by the Board of the National Bank of the Kyrgyz Republic resolution dated November 16, 2022 No. 2022-P-12/70-1)

2.5.2. The Qard contract is concluded in written form or in the form of an electronic document signed by means of an electronic signature that allows verifying its belonging to the party to the contract, with all attachments to them.

The Qard contract implies the absence of any profitability for one contracting party and the possibility of disposing of the received funds by the other contracting party.

The Qard contract must contain the following essential parameters and conditions:

the amount provided;
the term of the contract, the return date;
the rights and obligations of the parties;
the amount and conditions for payment for the bank's services for maintaining the current account.

(As amended by the Board of the National Bank of the Kyrgyz Republic resolutions dated November 16, 2022 No. 2022-P-12/70-1, December 20, 2023 No. 2023-P-12/80-3)

2.5.3. In banking activities, monetary funds attracted on the terms of the Qard contract form the bank's resource base and are considered as demand deposits.

Under the terms of the Qard contract, the client provides the bank with monetary funds on an interest-free basis, with the client's right to freely dispose of them, and the bank, in turn, may use part of the attracted resources in accordance with its investment policy.

For the purpose of maintaining the required level of current liquidity and the ability to fulfill obligations in a timely manner, the bank must maintain a sufficient volume of monetary funds in the cash register or on the correspondent account.

Under the terms of the Qard contract, the bank may provide the account holder with service using a checkbook or a plastic card. In this case, the bank may charge the account holder a fee for providing services for maintaining and servicing the current account.

In individual cases, the bank may consider the possibility of issuing a loan to the client on the terms of the Qard contract.

(As amended by the Board of the National Bank of the Kyrgyz Republic resolution dated November 16, 2022 No. 2022-P-12/70-1)

2.5.4. When opening an account for a client under the Qard contract, the bank must fulfill all necessary requirements related to the identification of the client's identity, in accordance with the regulatory acts of the National Bank of the Kyrgyz Republic.

(As amended by the Board of the National Bank of the Kyrgyz Republic resolutions dated May 31, 2017 No. 21/10, November 16, 2022 No. 2022-P-12/70-1)

Chapter 2.6

Istisna'a Contract and Parallel Istisna'a Contract

(Chapter name as amended by the Board of the National Bank of the Kyrgyz Republic resolution dated November 16, 2022 No. 2022-P-12/70-1)

2.6.1. The Istisna'a contract is a contract under the terms of which one party (the contractor) undertakes to perform a certain work according to the order of the other party (the customer) and hand over the result of the work to the customer within a specified period, and the customer undertakes to accept the result of the work and pay the pre-agreed cost.

(As amended by the Board of the National Bank of the Kyrgyz Republic resolution dated November 16, 2022 No. 2022-P-12/70-1)

2.6.2. The subject matter of the Istisna'a contract is the result of the contractor's activity with the mandatory use of raw materials (raw materials) for the manufacture of the object, processing (improving qualities or changing the properties of the object) or recycling of the object (creation of a new object as a result of the destruction of the existing one) or performing other work and handing over its results according to certain specifications.

(As amended by the Board of the National Bank of the Kyrgyz Republic resolution dated November 16, 2022 No. 2022-P-12/70-1)

2.6.3. The Parallel Istisna'a contract operates on the basis of two separate Istisna'a contracts, according to which the same person may act in the first case as a supplier and conclude a contract with the customer for payment and supply, and in the second case as a buyer and conclude another contract with the manufacturer, construction contractor to fulfill its specific obligations to the customer that it has within the framework of the first Istisna'a contract.

In the process of executing such transactions, the bank receives profit from the price difference between the two contracts. One of the contracts is concluded immediately (i.e., the Istisna'a contract that the bank concludes with the manufacturer, construction contractor, or supplier), while the second contract (i.e., the contract with the customer) is concluded later.

Manufacturer, construction contractor - a legal or physical entity engaged in entrepreneurial activity.

Client - a legal or physical entity that orders the manufacture of the subject of the Istisna'a contract according to a certain specification.

(As amended by the Board of the National Bank of the Kyrgyz Republic resolution dated November 16, 2022 No. 2022-P-12/70-1)

2.6.4. When concluding an Istisna'a contract, the client applies to the bank for the provision of a finished product after its manufacture within the framework of a contractual obligation, on condition that the corresponding materials and work will be provided by the manufacturer. The parties to the contract determine the specifications of the goods for a certain price, which is paid immediately or after a certain period.

The bank must assess the solvency of the property owner based on the provided financial documents.

2.6.5. The bank and the client conclude an Istisna'a contract before the bank acquires the right of ownership to the subject of the contract, which must be sold to the client or the right of ownership to the materials from which the subject of the contract is produced (or built).

2.6.6. The Istisna'a contract is binding on the contracting parties provided that certain conditions are met, which include the presence of specifications, indicating the type, quality, and quantity of the subject of the contract that must be produced.

2.6.7. The Istisna'a contract is concluded in written form or in the form of an electronic document signed by means of an electronic signature that allows verifying its belonging to the party to the contract, with all attachments to them, and is legally binding. The parties to the contract are bound by all obligations and consequences arising from their agreement.

(As amended by the Board of the National Bank of the Kyrgyz Republic resolution dated December 20, 2023 No. 2023-P-12/80-3)

2.6.8. The manufacturer is obliged to manufacture the goods that are the subject of the contract according to the specifications within the agreed period of time.

2.6.9. The contract specifies the price of the subject of the contract, the delivery date, the resources used (own or with the involvement of goods produced by other persons, existing before the conclusion of the contract, unless otherwise provided by the contract).

2.6.10. Before concluding the contract, all proposals for determining the price are considered.

2.6.11. The price of the subject of the contract is determined at the time of concluding the contract and may be paid in the form of monetary or material funds. The price may be paid on a deferred basis or in installments over a certain period of time, or, if the delivery of the subject of the contract is staged, part of the price may be paid immediately, and the rest is paid in installments according to the stages of delivery or performance of work.

2.6.12. The price for Istisna'a contract operations may vary according to changes in the delivery date. The price of the Istisna'a contract subject cannot be determined based on "cost plus fixed profit". The bank uses information from other dealers and suppliers to assess costs and determine prospective profit.

2.6.13. The Istisna'a contract should not be a means for simple interest financing.

(As amended by the Board of the National Bank of the Kyrgyz Republic resolution dated November 16, 2022 No. 2022-P-12/70-1)

2.6.14. The Istisna'a contract may be concluded for the construction of immovable property objects on a certain land plot that belongs to the final buyer or the contractor or on land from the use of which each of them derives benefit.

2.6.15. In the event of the manufacturer's bankruptcy, the client has a priority right to unfinished production, on condition of the client's payment of part of the cost of the raw materials.

2.6.16. The parties establish a term during which the manufacturer is responsible for any defects or for the maintenance of structures that are the subject of the contract.

2.6.17. After concluding the Istisna'a contract, it is allowed to make changes to the previously agreed specifications for production or construction by mutual agreement of the parties, as well as to make additional requirements, on condition that the price will be adjusted accordingly and a corresponding justified period will be provided to fulfill the new requirements.

2.6.18. No additional fee is charged for extending the payment term. A discount is allowed for prepayment, on condition that it was not provided for when concluding the contract.

(As amended by the Board of the National Bank of the Kyrgyz Republic resolution dated May 31, 2017 No. 21/10)

2.6.19. In the event of force majeure, changes may be made to the price by agreement of the parties or by court order.

2.6.20. The bank may replace the contractor and conclude an Istisna'a contract with the customer to complete the project that was started with the previous contractor. In this case, the assessment of the project should be made based on the existing status of the project, at the expense of the customer. Also, the customer bears personal responsibility for all unpaid debts, if any, arising as a result of the unfinished Istisna'a contract. Subsequently, a new Istisna'a contract is concluded to perform the remaining work.

2.6.21. In the case of construction of buildings or communal facilities on land belonging to the customer, the Istisna'a contract may be carried out at the expense of the manufacturer, if the latter does not fulfill the contract or cannot complete the work within the specified period of time, and this provision comes into force from the moment of the manufacturer's cessation of work.

2.6.22. If the contractor is unable to continue fulfilling its obligation, the customer (land owner) has no right to acquire ownership of unfinished construction or communal facilities that are already ready, without providing compensation to the contractor. This condition depends on the reason why the contractor cannot continue work.

If the contract is not fulfilled due to the contractor's fault, the client can only receive the paid cost of the built structure, and the construction contractor must compensate the final buyer for the amount of actual losses incurred.

If the non-fulfillment of the contract is related to the wrongful actions of the customer, the contractor has the right to receive an amount equal to the cost of the completed work and compensation for any losses or damages.

If the non-fulfillment of the contract is related to reasons to which neither party to the contract has any relation, then the final buyer has the right only to the built structure that is already in place, and neither party bears responsibility for compensation for losses or damages incurred by the other party.

2.6.23. In the event of a change in legislation leading to an increase in the cost of the subject of the contract, the additional costs are borne by the customer.

2.6.24. The bank, acting as the manufacturer or final buyer, may, as a guarantee, respectively, make advance payments or demand their payment, constituting part of the price, if the contract conditions are fulfilled, or a penalty is charged if the contract is terminated. It is preferable that this amount equals the actual damage incurred.

2.6.25. In the Istisna'a contract, the bank may demand, regardless of whether it acts as a manufacturer or customer, such guarantees as it deems sufficient to ensure the realization of its rights in relations with the customer or manufacturer. The bank, acting as the customer, may provide guarantees requested by the manufacturer, which may be in the form of a pledge, personal guarantee, assignment of rights, current account, or consent to block the withdrawal of funds from the account.

2.6.26. The bank, acting as the customer, may appoint, with the consent of the manufacturer, a consulting firm with technical experience, providing a qualified assessment of the fulfillment of the contract and recommendations for payment, supply, etc.

2.6.27. The bank, acting as the manufacturer, may conclude a separate agency agreement, according to which the customer is appointed as the bank's agent for supervising the manufacture or production of construction works for the purpose of ensuring the manufacture (construction) of the subject of the contract in accordance with the specifics of the order (project).

2.6.28. Additional expenses for supervising the fulfillment of the Istisna'a contract are paid by mutual agreement of the parties.

2.6.29. The manufacturer is released from the obligation if the subject of the contract is transferred to the final buyer, or to a person appointed by him, if the final buyer is able to exercise full control over the subject of the contract.

2.6.30. If the condition of the subject of the contract does not correspond to the agreed specifications of the order (project) on the delivery date, then the customer has the right to refuse or accept it, which will mean satisfactory fulfillment of the contract, with the possibility of changing the price.

2.6.31. The customer is obliged to accept the delivered subject of the contract if there is no sufficient reason for its rejection. For refusal to accept the subject of the contract, there must be a clear justification for the reason for this refusal.

2.6.32. In the case of unjustified refusal, the subject of the contract remains in the possession of the manufacturer. In this case, the manufacturer does not bear any responsibility for losses and damages that may occur with the subject of the contract, if such losses and damages are not the result of negligence or wrongful actions of the manufacturer. The customer bears the costs for the preservation of the subject of the contract.

2.6.33. Delivery of the subject of the contract is considered carried out from the moment of transfer to the actual possession of the final buyer, which allows him to gain control over the subject of the contract after the completion of the production process. At this stage, the manufacturer's obligation regarding the subject of the contract ends and the final buyer's obligation begins. If after the final buyer has had the opportunity to take control of the subject of the contract, then responsibility for any losses or damages that subsequently occur with the subject of the contract, without proof of negligence or wrongful actions on the part of the manufacturer, is borne by the final buyer.

2.6.34. The manufacturer may act as the customer's agent in the sale of the subject of the contract if there is a delay on the part of the customer in accepting the subject of the contract within the established period of time. In this case, the manufacturer sells the subject of the contract on behalf of the customer and after deducting the agreed contract cost returns the remaining funds, if any, to the customer. If the received price is less than the contractually agreed price, then the manufacturer has the right to appeal to the customer for reimbursement of the remaining part.

2.6.35. The customer bears the expenses for the sale of the subject of the contract.

2.6.36. Penalties for violation of the conditions for delivery of the subject of the contract are applied as appropriate compensation for the incurred losses. Such compensation is allowed only if the delay was not caused by force majeure.

At the same time, it is not allowed to provide for a penalty clause aimed against the final customer for non-payment.

2.6.37. It is not allowed to sell the subject of the contract before it passes into the actual possession of the bank.

2.6.38. The bank, acting as the customer, after taking possession of the subject of the contract may appoint the manufacturer as an agent for the sale of the customer's subject of the contract to the bank's customers. In this case, the agency contract is concluded separately from the Istisna'a contract.

2.6.39. The bank may order goods that have their own specifics. Subsequently, the bank may, on the basis of a parallel Istisna'a contract, conclude a contract with another party for the purpose of sale, already as a manufacturer or supplier of goods, the specifics of which correspond to the requirements of the other party, and accordingly fulfill its contractual obligations.

2.6.40. The bank, acting as a manufacturer and supplier, is allowed to conclude an Istisna'a contract for the purpose of selling such goods to the customer in installments and conclude a parallel Istisna'a contract based on immediate payment with the manufacturer and construction contractor for the acquisition of goods provided for in the first contract and their sale to the customer. This is permissible on condition that the Istisna'a and parallel Istisna'a contracts are concluded separately and that the delivery date provided for in the parallel contract (parallel Istisna) should not precede the date provided for in the original purchase contract (Istisna).

2.6.41. In the event of concluding an Istisna'a contract as a manufacturer or supplier, the bank assumes the obligation for property risk, for costs of technical maintenance and insurance for the period until the transfer of the subject of the contract to the customer. The bank cannot, in a parallel Istisna'a contract concluded with the manufacturer, transfer to the latter the responsibility for the risk arising from its obligations to the customer.

2.6.42. Contractual links between the obligations under two contracts (Istisna'a contracts and parallel Istisna'a contracts) are not allowed when concluding them. Thus, it is not allowed for the party participating in the ordinary Istisna'a contract to refuse its obligations or delay the transfer of the subject of the contract because its obligation under the parallel Istisna'a contract is not fulfilled or to increase the price of the supplied goods due to an increase in the cost of goods under the parallel Istisna'a contract.

At the same time, the bank's right to provide conditions and requirements when concluding a parallel Istisna'a contract when it acts as a buyer is not limited, including a clause regarding penalties, different or similar to the clause that the customer provided for in the first Istisna'a contract, in which the bank acts as a supplier.

Chapter 2.7

Guarantee Contract

(Chapter name as amended by the Board of the National Bank of the Kyrgyz Republic resolution dated November 16, 2022 No. 2022-P-12/70-1)

2.7.1. Timely fulfillment of obligations under contracts for sale, exchange, lease, rights, and other contracts may be secured by pledge, guarantee, and other methods provided for in this chapter.

Under a guarantee agreement (transaction to secure the performance of obligations), one party acts as a guarantor to the other party regarding the obligations of a third party. The performance of an obligation may be secured by several methods simultaneously.

Any natural or legal person with an impeccable reputation and whose solvency is not in doubt may act as a guarantor.

(As amended by the Resolution of the Board of the National Bank of the Kyrgyz Republic dated November 16, 2022 No. 2022-P-12/70-1)

2.7.2. The performance of an obligation may be secured by several methods simultaneously, for example, a personal guarantee and a pledge.

2.7.3. Transactions to secure the performance of obligations are concluded in writing and, in cases established by legislation or by agreement of the parties, are notarized.

2.7.4. The invalidity of an agreement to secure an obligation does not entail the invalidity of that obligation (the main obligation). The invalidity of the main obligation entails the invalidity of the obligation securing it.

2.7.5. The lessee provides security for compensation of damage caused to the leased property due to the fault of the lessee.

2.7.6. Personal guarantees are divided into two types:

the debtor has the right to ask for help from the guarantor, and this guarantee is offered at the request and with the consent of the debtor;
a guarantee without assistance, which is offered voluntarily by a third party without the request or consent of the debtor (volunteer guarantee).

2.7.7. The bank provides guarantees for the client's financial obligations in the amount of the principal debt with the condition that the client compensates the bank for the amount of the principal debt.

(As amended by the Resolution of the Board of the National Bank of the Kyrgyz Republic dated December 21, 2016 No. 49/8)

2.7.8. The guarantee specifies the term of validity and the amount for which the guarantee is provided.

2.7.9. The creditor has the right to demand the debt amount from both the debtor and the guarantor.

2.7.10. If the creditor releases the debtor from paying the debt, the guarantor also becomes free from the obligation to pay the debt. However, if the creditor has released the guarantor from financial liability, the debtor's indebtedness remains.

In the event of the guarantor paying off the debtor's indebtedness, the debtor compensates him only for the paid-off amount.

2.7.11. If the bank conducts transactions based on Mudaraba or Musharaka, it is not allowed to guarantee currency exchange rate fluctuations.

2.7.12. If the contract stipulates that the debtor must provide security in the form of a guarantee from a third party, and the debtor has not provided a guarantor, the bank in this case has the right not to perform the obligation until the security is provided or to terminate the contract.

2.7.13. The performance of a pledge agreement is mandatory for the pledgor, even if the pledged asset is not in the possession of the creditor, and accordingly, the debtor cannot terminate the pledge agreement. However, acceptance of the pledge is not mandatory for the creditor, as he has the right to refuse his pledge right. The death of the pledgor or pledgee, or the liquidation of a legal entity, does not affect the validity of the pledge agreement, and successors will replace both the pledgor and the pledgee in repayment and receiving benefits from the pledge.

2.7.14. The pledgor must be the owner of the pledged property or a person authorized to dispose of this property. The pledge must be identified in the contract. It is permitted to provide the same property under more than one pledge, provided that the subsequent pledgee is duly notified of previous pledges. If the pledges were registered on different days, the order of their repayment will be determined in accordance with the date of their registration.

2.7.15. The pledgor has the right to redeem the pledged property and may also consent to the creditor selling the property if an agreement has been reached regarding the repayment of the debt.

2.7.16. The seller may obtain from the buyer the right to store the sold property as a pledge to ensure the payment of remaining installment payments. The buyer is also allowed to keep the property in his possession, sold on the basis of a lump-sum payment, until he receives payment for the property.

2.7.17. The creditor also has the right to stipulate that the debtor must transfer to him the rights to sell the pledged property so that the creditor can obtain the necessary amount (if the debtor is unable to repay the debt or refuses to repay the debt) from the amount received from the sale of the pledged property, without going to court.

2.7.18. The pledgor (debtor) bears full responsibility for paying all expenses related to the documentation, storage, and sale of the pledged property.

2.7.19. The creditor (pledgee) has the right to the pledge until the debt is fully repaid, except in cases where he has agreed to partial repayment. However, the creditor does not have the right after the debt is paid to retain the pledge as security for other unsecured debts, unless this was agreed upon in advance. The creditor and the debtor may agree, after the debt is paid, to recognize the released pledge as security for any other debt that may arise between them during a certain subsequent period.

2.7.20. The pledgor is allowed to use the pledged property with the consent of the pledgee. However, the pledgee does not have the right to use the pledged property, even if the pledgor has given permission for this.

2.7.21. Commission fees for providing a letter of guarantee are not charged. The bank has the right to ask the applicant to bear administrative expenses related to the issuance of the letter of guarantee, provided that these expenses do not exceed the commissions usually charged for such services. At the same time, the structure of administrative expenses approved in the bank's internal documents must be disclosed to the client.

(As amended by the Resolution of the Board of the National Bank of the Kyrgyz Republic dated December 21, 2016 No. 49/8)

2.7.22. It is not allowed to issue letters of guarantee in favor of the applicant, who will use them to obtain an interest-bearing loan or to conclude prohibited transactions.

2.7.23. Expenses for providing a documentary letter of credit are paid by the client; the bank may also charge a fee for services rendered, whether it is a fixed rate or a certain part of the letter of credit amount, provided that the duration of the letter of credit is not taken into account when calculating commissions. This rule on services rendered applies to import and export letters of credit. It is permitted to charge only for incurred costs (not taking into account the extension of the term) that occurred as a result of a contract amendment, and such a fee must be in the form of a fixed rate, not a percentage of the amount.

2.7.24. When charging a fee for a documentary letter of credit, the bank must take into the following:

a) the possibility of guarantee when confirming this letter of credit. Accordingly, the bank is allowed to charge an additional amount to the incurred costs if it confirms a letter of credit issued by another bank;

b) the issuance of a letter of credit must not include interest or an operation that could potentially include interest.

2.7.25. It is permitted to subscribe to an Islamic insurance policy as security for debt obligations and insurance of these debts by traditional insurance is not permitted.

2.7.26. A third party (except for the Mudarib or investment agent) is allowed to take a voluntary obligation to compensate the investment losses of the party to whom the obligation was given, provided that the guarantee is in no way related to the financial contract of Mudaraba or the investment agency contract.

2.7.27. The bank has the right to provide guarantees for participation in tenders.

2.7.28. The bank, to ensure the proper performance by the client of the obligation to conclude and perform a unilateral obligation, may take monetary funds in pledge, which guarantee the bank compensation for losses in case of the client's breach of his obligation.

2.7.29. The bank has the right to recover its material assets that were sold to the client, but for which it has not yet received payment.

2.7.30. The bank has the right to protect the integrity of the subject of the pledge or other security, including in court, in cases of its improper use, which may lead to its loss or destruction.

2.7.31. The rights of parties holding pledged property as security for a debt will be prior to the rights of parties who have unsecured debts.

Chapter 2.8

Salam Contract

2.8.1. Under a Salam contract, one party (the seller) undertakes to transfer to the other party (the buyer) goods within an agreed future term, and the buyer undertakes to pay for these goods at the moment of concluding the Salam contract.

(As amended by the Resolution of the Board of the National Bank of the Kyrgyz Republic dated November 16, 2022 No. 2022-P-12/70-1)

2.8.2. A parallel Salam contract is a contract that includes two separate contracts. In the first contract, one party acts as a buyer and concludes a contract with the customer for the purchase of certain goods with subsequent delivery and payment upon signing the contract. According to the second contract, this party sells the same goods, in the same quantity and on the date specified in the first contract, to another customer, who pays for the goods at the moment of signing the second contract.

(As amended by the Resolution of the Board of the National Bank of the Kyrgyz Republic dated November 16, 2022 No. 2022-P-12/70-1)

2.8.3. According to the second contract, the bank sells the same goods, in the same quantity and on the date specified in the first contract, to another customer, who pays for the goods at the moment of signing the second contract.

(As amended by the Resolution of the Board of the National Bank of the Kyrgyz Republic dated November 16, 2022 No. 2022-P-12/70-1)

2.8.4. Within the framework of Salam and parallel Salam contracts, the bank may act as both a buyer and a seller.

2.8.5. The bank carries out the acquisition of goods under Salam and parallel Salam contracts and their sale upon the application of a solvent client.

2.8.6. The bank is the entity carrying out both the acquisition of the goods and their sale.

2.8.7. The seller is a legal or natural person from whom the bank acquires the goods.

2.8.8. Interchangeable goods are goods that have common characteristics and do not differ significantly from each other. Any interchangeable goods can be replaced by other goods in case of their destruction, when there is no need to assess the cost of the damaged or replaced goods in their evaluation.

2.8.9. To carry out Salam transactions, separate contracts or a general cooperation agreement may be concluded, within the framework of which separate contracts may be concluded specifying their term of validity.

2.8.10. In the general agreement, the parties define the framework of the contract and the intention of the parties to carry out the purchase and sale, as well as define the quantity and specifics of the goods, the method of delivery, the basis for determining the price, and the payment method. In addition, guarantees and other conditions are provided for.

2.8.11. A Salam contract is concluded in writing or in the form of an electronic document signed by means of an electronic signature that allows verifying its belonging to the party to the contract, with all attachments to them. The contract is subject to notarization and state registration in cases provided for by the legislation of the Kyrgyz Republic. The essential conditions of the contract are:

a) the sale of specific goods with deferred delivery;

b) payment for the goods at the moment of concluding the contract.

(As amended by the Resolution of the Board of the National Bank of the Kyrgyz Republic dated December 20, 2023 No. 2023-P-12/80-3)

2.8.12. The price under Salam contracts may be established both in the form of money and in the form of interchangeable goods (goods defined by generic characteristics).

2.8.13. If the price is determined in money, the currency, amount, and method of payment must be determined. If the price is determined in the form of interchangeable goods, their grade, type, specification, and quantity must be clearly established.

2.8.14. The price under a Salam contract is paid immediately at the moment of its conclusion. In exceptional cases, payment may be deferred for a period of no more than three days, which should not affect the performance of the Salam contract, provided that the delay period is not equal to or does not exceed the delivery period of interchangeable goods.

2.8.15. It is not allowed to use indebtedness as capital under a Salam contract.

2.8.16. A Salam contract is concluded for goods that can be weighed, measured, or counted.

2.8.17. The subject of the contract cannot be precious metals (gold, silver).

(As amended by the Resolution of the Board of the National Bank of the Kyrgyz Republic dated November 16, 2022 No. 2022-P-12/70-1)

2.8.18. Goods must be in such a form that allows describing the specifics, excluding any uncertainty, for the compliance of which the seller is responsible.

2.8.19. Goods must be specifically defined in accordance with accepted practice and expert opinion.

2.8.20. The quantity of each unit of goods is determined depending on its condition and nature, i.e., its weight, size, volume, and number of places are indicated.

2.8.21. Goods must be available under normal circumstances in the place where they should be at the time of delivery and be accessible to the seller so that he can fulfill his obligation to deliver the goods to the buyer.

2.8.22. The parties establish a specific delivery date, but may establish different dates for the delivery of goods, delivery of goods in batches, provided that their cost was paid at the moment of the initial conclusion of the contract.

2.8.23. The parties may determine the place for the delivery of goods. If the parties to the contract do not determine the place for the delivery of goods, then such a place is the place of conclusion of the contract, unless it turns out that it is impossible to deliver the goods to this place. In this case, the place for the delivery of goods is determined based on usual practice.

2.8.24. The delivery of goods may be secured by any type of security for the performance of payment obligations.

2.8.25. The buyer is not allowed to sell the goods until he receives ownership rights to them.

2.8.26. By mutual agreement of the parties, the Salam contract may be fully terminated and obligations terminated in exchange for full compensation of the contract cost. Partial cancellation is also permitted, i.e., cancellation of the delivery of part of the goods in exchange for the corresponding part of the compensation of the contract cost.

2.8.27. The seller is obliged to deliver the goods to the buyer on the established day, according to the conditions of the contract, in accordance with the agreed specifications and in the agreed quantity. The buyer, on the other hand, must accept the goods if they meet the requirements provided for by the specifications in the contract.

2.8.28. If the seller offers goods of higher quality than those required in accordance with the contractual specifications, the buyer must accept the goods if the seller does not request a higher price for the higher quality. This applies only when the description (with lower quality specifications) provided for in the contract is not considered an essential condition.

2.8.29. If the quality of the delivered goods is lower than that required in accordance with the contractual specifications, the buyer has the right to either reject or accept the goods in such a state. In case of acceptance, the parties may agree to accept such goods with a price reduction.

2.8.30. The seller must deliver the goods in the form of products agreed upon in the contract.

2.8.31. Goods may be delivered in advance provided that the goods meet the agreed specifications and are delivered in the required quantity.

2.8.32. If the seller cannot fulfill his obligation or if the seller does not have all or part of the goods available on the established date, the buyer may:

a) wait for the goods to be available or provide a longer period of time for the delivery of goods;

b) terminate the contract and recover the paid funds.

The parties are also allowed to agree on the replacement of goods with other goods.

2.8.33. It is not allowed to include a clause providing for penalty sanctions for delay in the delivery of goods.

2.8.34. The seller is allowed to conclude a separate independent Salam contract with a third party to acquire goods of the same specification as those provided for in the first Salam contract, in order to fulfill the obligation under the first contract and deliver these goods. Consequently, the bank, acting as the seller in the first Salam contract, becomes the buyer in the second Salam contract.

2.8.35. The buyer is allowed to conclude a separate parallel Salam contract with a third party for the purpose of selling goods acquired on the basis of a Salam contract, the description of which coincides with the description of the goods that are planned to be acquired using the first Salam contract. In this situation, the bank, acting as the buyer in the first Salam contract, becomes the seller in the second Salam contract.

2.8.36. In both cases, the parties are not allowed to link the obligations under the two Salam contracts.

Obligations and rights under two contracts must be separate in all aspects. In case of breach of obligations under the first Salam contract, the other party (the aggrieved party) has no right to link this damage or loss with the party with whom the first party concluded the parallel Salam contract. Consequently, she has no right on the basis of her losses or damage incurred under the first Salam contract to terminate the second Salam contract or delay its performance.

2.8.37. All rules governing the Salam contract also apply to the parallel Salam contract.

2.8.38. It is not allowed to issue commodity bonds on debt obligations arising from a Salam contract.

2.8.39. In Salam contracts, the bank carries out the purchase of a specific good ordered by the customer-client with its subsequent sale to the client at a price including the bank's markup.

(As amended by the Resolutions of the Board of the National Bank of the Kyrgyz Republic dated December 21, 2016 No. 49/8, November 16, 2022 No. 2022-P-12/70-1)

2.8.40 (Lost force in accordance with the Resolution of the Board of the National Bank of the Kyrgyz Republic dated December 21, 2016 No. 49/8)

Chapter 2.9

Documentary Letter of Credit

2.9.1. The bank is allowed to claim actual expenses incurred in connection with the issuance of a documentary letter of credit. It is also permissible for the bank to charge fees for providing necessary services, regardless of whether such fees are in the form of a lump sum or represent a certain share of the letter of credit amount, provided that the term of the letter of credit is not taken into account when determining commissions. This rule applies to services rendered under import and export credit, except in cases where changes in conditions entail changes in the term schedule of the letter of credit. Thus, it is permissible for the bank to charge fees only in the form of a specific amount for actually incurred expenses, and not in percentage terms.

When charging a fee for a documentary letter of credit, the bank must take into account the following conditions:

a) that the documentary letter of credit has the property of a guarantee, accordingly, the bank should not charge an additional amount to the incurred costs if it confirms a letter of credit issued by another bank;

b) the issuance of a letter of credit does not imply interest profit and is not a means of obtaining such profit;

c) it is unacceptable to use a combination of contracts in a documentary letter of credit as justification for including prohibited operations, such as commission fees for providing a guarantee or issuing a loan.

2.9.2. The bank may open all types of documentary letters of credit. The bank is also allowed to participate or act as an intermediary in such transactions according to existing forms of executable documentary letters of credit.

2.9.3. It is unacceptable for the bank to carry out transactions under a documentary letter of credit either for itself or on behalf of another client or organization, or by joint work, when such a letter of credit relates to goods prohibited by Sharia or based on a contract that is invalid, incorrect (according to Sharia).

2.9.4. The bank is obliged to execute the letter of credit if it corresponds to the instructions, except in cases of document forgery.

2.9.5. The bank has the right to demand security for the obligation arising in connection with a documentary letter of credit or to provide a documentary letter of credit as security for payment in favor of companies and banks. The bank may act as an intermediary to secure a documentary letter of credit using permissible and available forms of security, including in the form of funds in settlement accounts or funds deposited by the client under a Mudaraba agreement.

2.9.6. The bank is not allowed to use interest-bearing bonds, shares of companies engaged in activities prohibited by Sharia, and interest-bearing receivables as security.

2.9.7. If the client intends to purchase imported goods from the bank using financing under a documentary letter of credit under a Murabaha contract, the following conditions must be observed:

a) the opening of the documentary letter of credit must not precede the conclusion of the sale contract between the customer and the seller.

b) the bank must be the party that purchases goods from the supplier and then sells them to the client under a Murabaha contract in accordance with the rules of Sharia regarding the Murabaha contract for the customer for delivery.

2.9.8. If the documentary letter of credit includes a provision that is subject to prevailing principles and practices that unify documentary letters of credit, it is necessary to qualify such a statement by including a clause that it does not violate the rules and principles of Sharia.

2.9.9. The bank is not allowed to discount accepted bills of exchange, i.e., to acquire these bills at a cost less than their nominal value.

2.9.10. It is unacceptable for the bank to negotiate a reduction in the nominal value of documents on the basis of which payment is to be made upon presentation or payment upon presentation of bills of exchange.

Chapter 2.10

Foreign Exchange Operations

2.10.1. The bank has the right to carry out transactions for the purchase and sale of foreign currency provided they comply with the following Sharia rules:

a) both parties must have the currency to be exchanged for another type of currency available;

b) the units of currency exchange must be of the same amount, even if one of them is a banknote and the other is a coin of the same country;

c) the contract will not include any conditional alternatives or clauses on the delay in the delivery of one or both units of exchange;

d) foreign exchange operations must not be aimed at establishing a monopoly and must not lead to consequences entailing harm and damage to the parties to the transaction and society as a whole;

e) foreign exchange operations must not be carried out on futures and forward operations.

2.10.2. It is prohibited to conclude foreign exchange contracts for future sales. This rule must be observed regardless of whether these contracts are exchanges of deferred money transfers for debt repayment or the execution of a deferred contract in which there is no joint ownership by the parties of both units of exchange.

2.10.3. It is prohibited to conclude any transactions on the forward foreign exchange market, even if the purpose is an insurance transaction (concluding transactions for the sale or purchase of foreign currency for a term), to avoid losses in certain operations depending on the currency, the price of which may fall in the near future.

2.10.4. The Bank has the right to conclude insurance transactions for future currency devaluation in cases where the Bank must fulfill obligations or conditions of a murabaha contract in the corresponding currency.

(In the edition of the Resolution of the Board of the National Bank of the Kyrgyz Republic dated November 16, 2022 No. 2022-P-12/70-1)

2.10.5. The Bank and the client are permitted to agree that loan repayments and other credit operations may be carried out in another currency in accordance with the exchange rate acting on the day of payment in the domestic currency market of the republic.

2.10.6. Money transfers in a currency different from the currency provided by the applicant for transfer are permitted. The transfer is carried out through actual or constructive possession, by delivering the amount of currency confirmed by a bank account, after which a transfer of the amount using the currency purchased by the applicant for the money transfer must follow. The Bank may charge a fee for such money transfers.

2.10.7. When concluding a contract for the sale of a certain amount of currency, the right to ownership of the entire amount must be recognized on the day of completion of the transaction term.

2.10.8. Possession may be actual and constructive. The form of ownership of assets depends on their type and the rules used in conducting activities.

2.10.9. Physical (actual) possession of cash money is transferred at the moment of personal handover of money.

2.10.10. Constructive possession of an asset is recognized in cases where the seller has allowed another person to receive and sell this asset on his behalf, even if there was no physical transfer of possession of the asset, including:

a) when the Bank credits funds to the client's account;

b) when the Bank concludes a contract with the client to exchange cash currency for non-cash and vice versa;

c) when the Bank (with the client's consent) withdraws a sum of money from the client's account and credits it to another account in another currency, or in the same or another bank for the benefit of the client or another person receiving the payment;

d) receipt of a check signifies constructive possession only if the amount to be paid is available in the check issuer's account in the currency indicated on the check and if the Bank has blocked this amount for payment.

2.10.11. A bilateral obligation to sell and buy currency is prohibited if this obligation is mandatory, even for the purpose of insurance against losses possible due to currency devaluation. However, a unilateral obligation is permitted.

2.10.12. Parallel purchase and sale of currency is not permitted, as it involves one of the following factors depriving it of legal force:

a) absence of delivery and receipt of two bought and sold currencies, which leads the contract to a deferred sale of currency;

b) the contract for the sale of currency becomes dependent on another contract for the sale of currency;

c) it leads to a bilateral mandatory obligation of both parties to exchange currency, which itself is not permitted.

2.10.13. One of the partners in a diminishing musharaka or mudaraba contract is not permitted to be a guarantor for the other partner if the transaction is related to currency exchange. However, a third party may voluntarily act as a guarantor if this guarantee is not specified in the contract.

(In the edition of the Resolution of the Board of the National Bank of the Kyrgyz Republic dated November 16, 2022 No. 2022-P-12/70-1)

2.10.14. Exchange of currency sums that are established debts of the debtor is permitted if it leads to the repayment of two debts in the case of bilateral currency exchange, as well as to the full repayment of existing debt.

2.10.15. One of the prohibited ways of conducting currency trading is when a bank client enters into currency trading without owning a sufficient amount, uses loans issued by the Bank, which operates in the field of currency trading, thereby providing the client with the opportunity to enter into a transaction for an amount exceeding the sum he could pay.

2.10.16. The Bank is not permitted to lend to the client on the condition that currency transactions must be conducted only with this Bank and no other. If such a condition is absent, then Sharia does not prohibit the issuance of loans.

Chapter 2.11

Bank Payment Cards

(Chapter

in the edition of the Resolution of the Board of the National Bank of the Kyrgyz Republic dated June 14, 2023 No. 2023-P-12/38-3)

2.11.1. This Chapter establishes requirements for the issuance and servicing by banks of debit and credit cards (financing cards) of clients.

(In the edition of the Resolution of the Board of the National Bank of the Kyrgyz Republic dated June 14, 2023 No. 2023-P-12/38-3)

2.11.2. The Bank is permitted to issue bank cards subject to the following conditions in the contract:

a) the Bank will not charge interest payments in case of untimely payment of the required amount for the received financing;

b) the Bank has no right to charge interest on funds in the bank account when clients use these types of cards;

c) the Bank must stipulate that the client cannot use the card for purposes prohibited by Sharia standards, and that the Bank may block the card, cancel the action of the card in case of violation of this condition.

(In the edition of the Resolution of the Board of the National Bank of the Kyrgyz Republic dated June 14, 2023 No. 2023-P-12/38-3)

2.11.3. The Bank, when opening an account using a bank card for the client, must in mandatory order explain the procedure for calculating income/expenses on the card.

(In the edition of the Resolution of the Board of the National Bank of the Kyrgyz Republic dated June 14, 2023 No. 2023-P-12/38-3)

2.11.4. The Bank has the right to provide the cardholder with benefits not prohibited by Sharia standards, such as priority rights to discounts in hotels, airlines, restaurant reservations, etc.

The Bank has no right to grant the card owner privileges that are prohibited by Sharia standards, such as life insurance, entry to prohibited places, or prohibited gifts.

In case of return of goods according to the current legislation of the Kyrgyz Republic, by agreement between the client and the Bank, the Bank has the right to cover its costs arising from such a return, among which may be the difference in exchange rates, etc.

(In the edition of the Resolution of the Board of the National Bank of the Kyrgyz Republic dated June 14, 2023 No. 2023-P-12/38-3)

2.11.5. Debit Cards

A debit bank card is intended for making transactions within the limit of available funds in the client's bank account.

The client is permitted to withdraw cash not exceeding the limit of available funds in the bank account to which the card is linked.

The Bank may provide short-term financing/loan (overdraft) to the client on the condition of not charging interest on the provided amount of financing/loan.

(In the edition of the Resolution of the Board of the National Bank of the Kyrgyz Republic dated June 14, 2023 No. 2023-P-12/38-3)

2.11.6. Credit Cards

A credit card is intended for making transactions with funds provided to the client as financing.

The Bank must inform the cardholder about the main characteristics of the credit card and indicate in the bank account contract that the Bank will apply fines in case of untimely return of funds to the card with prior disclosure of all amounts.

Fines and penalties accrued for late repayment of debt are directed to charity.

The Bank may accept a deposit from the client as a guarantee; the deposit cannot be used by the cardholder. The Bank must give the client the right to choose the contribution of guarantee funds to a demand deposit under a card or wadi'ah daman contract, or a term deposit under an unlimited mudaraba contract, including the choice of a specific deposit product. In case of the client's choice of a term deposit under an unlimited mudaraba contract, the Bank has the right to invest this amount for the purpose of obtaining benefit for the client. Any income received from this amount will be shared between the Bank and the client in accordance with the conditions of the unlimited mudaraba contract.

The Bank must ensure that advertising and promotional materials for credit card products are extremely clear and accessible for perception and understanding and do not mislead clients.

In advertising, publishing, and disseminating information, banks must disclose exhaustive information about the main conditions of the credit card product, indicating the full cost of the product, as well as the size of the commission.

(In the edition of the Resolution of the Board of the National Bank of the Kyrgyz Republic dated June 14, 2023 No. 2023-P-12/38-3)

2.11.7. The Bank is permitted to join international payment systems on condition that the Bank does not violate Sharia rules.

The Bank is permitted to pay membership fees, services, and other fees to the international payment system in case they do not include interest.

(In the edition of the Resolution of the Board of the National Bank of the Kyrgyz Republic dated June 14, 2023 No. 2023-P-12/38-3)

Chapter 2.12

Contracts of Trust (Wadi'ah Amanat) and Guaranteed (Wadi'ah Daman) Storage

(Name of the chapter

in the edition of the Resolution of the Board of the National Bank of the Kyrgyz Republic dated November 16, 2022 No. 2022-P-12/70-1)

Wadi'ah Amanat Contract

(In the edition of the Resolution of the Board of the National Bank of the Kyrgyz Republic dated November 16, 2022 No. 2022-P-12/70-1)

2.12.1.1. Wadi'ah Amanat contract is a contract for providing a safe deposit box to the client by the Bank for storing documents, valuables, cash, etc. Access is carried out via 2 keys, belonging one to each of the parties.

The Bank may receive a pre-agreed amount of remuneration for providing this service.

(In the edition of the Resolution of the Board of the National Bank of the Kyrgyz Republic dated November 16, 2022 No. 2022-P-12/70-1)

Wadi'ah Daman Contract

(In the edition of the Resolution of the Board of the National Bank of the Kyrgyz Republic dated November 16, 2022 No. 2022-P-12/70-1)

2.12.2.1. Wadi'ah Daman contract is a contract for guaranteed storage, under the conditions of which the Bank has the right to dispose of entrusted funds and receive profit from their placement.

(In the edition of the Resolution of the Board of the National Bank of the Kyrgyz Republic dated November 16, 2022 No. 2022-P-12/70-1)

2.12.2.2. Services under the Wadi'ah Daman contract are provided by the Bank through the opening and servicing of demand deposit accounts.

(In the edition of the Resolution of the Board of the National Bank of the Kyrgyz Republic dated August 14, 2019 No. 2019-P-12/42-2)

2.12.2.3. From the profit received from the placement of funds attracted under the Wadi'ah Daman contract, the Bank at its own discretion may pay remuneration to the owners of these accounts. The Bank has the right to establish the procedure, sizes, and rules for the payment of remuneration due to clients. The amount of remuneration paid to clients is recognized as period expenses.

2.12.2.4. The Bank, for the purpose of maintaining the required level of current liquidity and the ability to timely fulfill obligations under the Wadi'ah Daman contract, must maintain a sufficient volume of funds in the cash register or on the correspondent account in the National Bank of the Kyrgyz Republic.

2.12.2.5. Under the conditions of the Wadi'ah Daman contract, the Bank may provide the account owner with servicing using a checkbook or a bank card. In this case, the Bank may charge the account owner a fee for providing services for maintaining and servicing the current account.

(In the edition of the Resolution of the Board of the National Bank of the Kyrgyz Republic dated June 14, 2023 No. 2023-P-12/38-3)

Chapter 2.13. Wakala Bil-Istismar Contract

(Chapter

in the edition of the Resolution of the Board of the National Bank of the Kyrgyz Republic dated October 8, 2025 No. 2025-P-12/50-3-(NPA))

2.13.1. Wakala Bil-Istismar contract is an agreement under which the agent is entrusted with the management of the principal's funds for the purpose of obtaining profit on a paid or gratuitous basis.

Within the framework of the Wakala Bil-Istismar contract, the Bank may act as both an agent and a principal.