Regulation on Sale of Business Tool

Pursuant to Article 35, paragraph 1, subparagraph 1.1 and Article 65, paragraph 1 and 2 of the Law No. 03/L-209 on Central Bank of the Republic of Kosovo (Official Gazette of the Republic of Kosovo, No. 77/16 August 2010), amended by Law No. 05/L-150 (Official Gazette of the Republic of Kosovo No. 10/03 April 2017), and Article 8 and Article 108, paragraph 5 of the Law No. 08/L-304 on Banks (Official Gazette of the Republic of Kosovo, No. 2 /27 January 2026), the Board of the Central Bank of Republic of Kosovo at the meeting held on 29 June 2026, approved the following:
REGULATION ON SALE OF BUSINESS TOOL
Article 1
Purpose and Scope

1. The purpose of this Regulation is to establish the conditions, requirements and procedures related to
   the application of sale of business tool for bank resolution purposes.
2. This Regulation shall apply to all banks in the Republic of Kosovo that are licensed by the CBK,
   excluding branches of foreign banks.
   Article 2
   Definitions
3. All terms used in this Regulation shall have the definition ascribed to them in Article 3 of Law No.
   08/L-304 on Banks and/or as further defined herein for the purpose of this Regulation:
   1.1. Law on Banks – Law No. 08/L-304 on Banks.
   1.2. CBK as supervisory authority: means CBK acting as supervisory authority or licencing
   authority.
   1.3. Sale of business tool - the mechanism for effecting a transfer by the CBK of shares or other
   instruments of ownership issued by a bank under resolution, or assets, rights or liabilities, of a

bank under resolution to a purchaser that is not a bridge institution, in accordance with Article 108 of the Law on Banks.
1.4. Resolution tool - a resolution tool referred to in paragraph 2. of Article 107 of the Law on Banks.
2. Unless otherwise indicated, references to the CBK in this regulation shall be construed as to the CBK
acting in its capacity as resolution authority.
Article 3
General conditions for the application of sale of business tool

1. The CBK may apply the sale of business tool referred to banks that meet the applicable conditions for
   resolution, as specified in Article 106 of the Law on Banks. This tool may be applied individually or in any combination with other resolution tools as specified in the Law on Banks.

2. The CBK may transfer to the purchaser that is not a bridge institution:
   2.1. shares or other instruments of ownership issued by a bank under resolution;
   2.2. all or any assets, rights or liabilities of a bank under resolution.

3. If CBK, by a decision, decides to initiate resolution proceedings and specifies that resolution is to be
   carried out by means of the sale of assets, rights or liabilities of the bank under resolution in whole or in part, the Executive Board of CBK shall reach a decision and shall empower the resolution function to effect the sale.

4. Where the decision on the resolution specifies that resolution is to be carried out by means of the sale
   of shares or other instruments of ownership issued by the bank under resolution, the Executive Board of CBK shall reach a decision to sell these instruments of ownership to a particular purchaser.

5. Any transfer effected under this Regulation shall be carried out in accordance with the Law on Banks
   and without obtaining the consent of the shareholders of the bank under resolution, its creditors or any third party.

6. The bank under resolution shall notify, without any delay / as soon as possible, the persons the decision
   pertains in the part relevant to them of the decision of sale referred to in paragraphs 3 and 4 of this
   Article.

7. CBK may carry out the sale referred to in paragraph 3 and 4 of this Article in whole or in parts.

8. The acquirer who acquired instruments of ownership of the bank under resolution in accordance with
   this Article shall have all property rights arising from such instruments of ownership.

9. Where the CBK decides to apply a resolution tool to a bank, and that resolution action would result in
   losses being borne by shareholders or creditors or their claims being written down or converted, including through the application of the bail-in tool, the CBK shall exercise the power to write down and convert capital instruments in accordance with Article 112 of the Law on Banks immediately before or together with the application of the sale of business tool. The power to write down or convert in relation to liabilities of a bank under resolution, in accordance with Article 111 of the Law on Banks, may also be applied in combination with the Sale of Business tool.

10. Where CBK applies of sale of business tool to transfer only part of the assets, rights or liabilities of
    the bank under resolution, the residual bank or from which the assets, rights or liabilities have been transferred, shall be wound up under normal insolvency proceedings.

11. In accordance with paragraph 8 of Article 102 of the Law on Banks, the CBK and the National
    Resolution Fund may recover any reasonable expenses properly incurred in connection with the use of the resolution tools or powers or government financial stabilisation tools in one or more of the following ways:
    11.1. as a deduction from any consideration paid by a recipient to the bank under resolution or, as the
    case may be, to the owners of the shares or other instruments of ownership;
    11.2. from the bank under resolution, as a preferred creditor; or
    11.3. from any proceeds generated as a result of the termination of the operation of the bridge
    institution or the asset management vehicle, as a preferred creditor.
    Article 4
    Terms of sale

12. The sale referred to in paragraphs 3 and 4 of Article 3 of this regulation, shall be carried out at market
    terms, and the CBK shall take all reasonable steps to obtain the best possible terms of the sale, starting from the valuation conducted in accordance with the Law on Banks and the CBK regulation on the valuation for resolution purposes.

13. The amount obtained through the sale, reduced by the considerations specified under paragraph 11 of
    Article 3 of this regulation, shall be paid out to:
    2.1. the owners of shares or other instruments of ownership, where the sale of shares or instruments
    of ownership has been effected by transferring those instruments from the holder of those instruments to the purchaser; and

2.2. the bank under resolution, where the sale of assets, rights or liabilities of the bank under resolution
has been effected in full or partially by transferring from the bank under resolution to the purchaser.
3. Following the application of the sale referred to in Article 3 paragraphs 3 and 4 of this regulation, the
CBK may with the consent of the purchaser, including where such consent is provided in the sale agreement or transfer instrument, transfer back to the bank under resolution or to the original holders any assets, rights, liabilities, shares or other instruments of ownership that had been transferred to the purchaser.
4. Where the sale of business tool is envisaged, the valuation conducted under Article 102 of the Law on
Banks and the relevant regulation for resolution purposes shall determine, as appropriate, the disposal values of the assets, rights, liabilities, shares or other instruments of ownership to be transferred, taking into account the expected marketing period, disposal costs and, where relevant, the expected value of guarantees, credit enhancement or franchise value.
5. Where, due to the urgency of the circumstances, it is not possible to complete a fully compliant
valuation before the application of the sale of business tool, a provisional valuation shall be sufficient, provided that it is fair, prudent and realistic and includes an appropriate buffer for additional losses.
6. Where the sale of business tool has been applied, the provisional valuation, as referred in paragraph 5
of this Article, may serve as the basis for the transfer and for determining the commercial terms of the transfer, and no ex post definitive valuation for the purposes of this Regulation shall be required solely on the ground that the initial valuation was provisional. This is without prejudice to any separate valuation required under the Law on Banks to assess whether shareholders and creditors would have received better treatment under normal insolvency proceedings.
Article 5
Obligations of purchasers

1. In the case of the sale of assets, rights or liabilities of the bank under resolution, the purchaser shall
   have all appropriate authorisations to carry out the business that is the subject of the sale. In the case when the purchaser does not possess such authorisation, CBK as supervisory authority, shall review the request for this authorisation within the reasonable timeframe.

2. In the case of the sale of shares or other instruments of ownership of the bank under resolution, the
   purchaser acquiring the qualifying holding in the bank under resolution shall, as a rule and without prejudice of paragraph 5 of this Article, at the moment of sale has obtained the authorisation to acquire qualifying holding in accordance with the Law on Banks and relevant CBK regulations.

3. The CBK as supervisory authority, shall decide on the application to acquire a qualifying holding
   referred to paragraph 2 of this Article within a reasonable time after the request has been submitted.

4. By way of derogation from paragraph 2 and 3 of this Article, if the delay in the sale would prevent the
   achievement of resolution objectives as defined in Article 100 of the Law on Banks, the sale may be effected before the expiry of the time limit for deciding on the application referred to in paragraph 3 of this Article, and the CBK shall decide on the application to acquire a qualifying holding at a later time.

5. Where the purchaser has acquired a qualifying holding in accordance with paragraph 4 of this Article,
   the sales contract shall produce legal effect and the transfer of ownership may be carried out before acquiring approval by CBK as supervisory authority under this Article, but voting and other management rights in relation to the instruments of ownership shall be transferred to the CBK which shall have no obligation to exercise any such voting rights and which shall have no liability whatsoever for exercising or refraining from exercising any such voting rights.

6. In case referred to in paragraph 5 of this Article, upon obtaining the authorisation to acquire a
   qualifying holding, the voting rights arising from these instruments of ownership shall be transferred from the CBK to the acquirer.
   Article 6
   Consequences of the refusal of application for granting authorisation to acquire qualifying holding

7. Where the CBK, as supervisory authority, in accordance with the Law on Banks, refuses the
   application for granting the authorisation to acquire a qualifying holding in the bank under resolution, the voting rights and other management rights arising from these shares shall continue to be held by the CBK, which may order the sale of the shares by the buyer within the set time limit.

8. The transfers arising from the sale of business tools shall be subject to the safeguard measures referred
   to in Article 117 of the Law on Banks and relevant CBK regulations.
   Article 7
   Safeguards

9. When determining the perimeter of a transfer under the sale of business tool, the CBK shall ensure
   compliance with the safeguard provisions of the Law on Banks and relevant CBK regulation for this purpose.

10. In particular, the CBK shall ensure that a transfer does not split, sever or otherwise adversely affect
    protected arrangements except to the extent expressly permitted by the Law on Banks or the relevant regulation.

11. For the purposes of paragraph 2 of this Article, protected arrangements shall include, at a minimum,
    security arrangements, title transfer financial collateral arrangements, set-off arrangements, netting arrangements, covered bond arrangements and structured finance arrangements.
    Article 8
    Rights of purchasers, shareholders and creditors

12. The purchaser referred to in paragraph 1 of article 5 of this regulation may continue to exercise the
    rights of membership and access to payment, clearing and settlement systems, stock exchange, and deposit guarantee scheme of the bank under resolution, provided that it meets the criteria for participation in such systems, whereby the access to those systems cannot be denied on the ground that the purchaser does not possess a rating from a credit rating agency or that rating is not commensurate to the rating level required to be granted access to such systems.

13. Where the purchaser does not meet the membership or participation criteria for access to the systems
    referred to in paragraph 1 of this Article, the CBK and/or authorities competent for approving the membership and access to those systems may grant that the rights are exercised for such a period of time as specified, not exceeding 24 months from the sale of assets, rights and liabilities of the bank under resolution and the time limit may be extended for another 12 months at the request of the purchaser.

14. The shareholders or creditors of the bank under resolution and other third parties whose assets, rights
    or liabilities are not sold by means of the sale of business tool shall not have any rights over or in relation to the assets, rights or liabilities sold, except the right to safeguard measures referred to in
    Article 117 of the Law on Banks and relevant CBK regulation.

15. The purchaser shall be considered the legal successor of the bank under resolution and may continue
    to exercise any right that was exercised by the bank under resolution in relation to transferred assets, rights or liabilities.
    Article 9
    Sale of business tool: procedural requirements

16. The process of selling the assets, rights or liabilities, shares and other instruments of ownership of a
    bank under resolution is carried out by CBK. CBK shall make necessary arrangements for the sale and marketing according to market terms in accordance with Article 102 of the Law on Banks and relevant CBK regulation. The marketing costs are covered by the bank under resolution.

17. The sale referred to in paragraph 1 of this Article shall be carried out in accordance with the following
    criteria:
    2.1. Transparency and, to the extent possible, accurate representation of the assets, rights, liabilities,
    shares or other instruments of ownership of the credit institution under resolution, having regard to the need to maintain financial stability.
    2.2. Equality between potential buyers with a view to fair competition among potential purchasers.
    2.3. Avoidance of any conflict of interest.
    2.4. Urgency of the resolution proceedings.
    2.5. It shall aim at maximising, as far as possible and taking into consideration the circumstances of
    the case, the sale price for the shares or other instruments of ownership, assets, rights or liabilities involved.

18. By way of derogation from paragraph 2 of this Article, the CBK may limit the circle of potential
    purchasers, conduct a targeted sale process, delay disclosure of the sale process or arrange the sale directly with a particular purchaser, and such a sale shall not constitute a breach of the principle of equality between the potential purchasers referred to in subparagraph 2.2 of paragraph 2 of this Article. only where the CBK determines that:
    3.1. there is a material threat to financial stability arising from or aggravated by the failure or likely
    failure of the bank under resolution; and
    3.2. compliance with the requirements of paragraph 2, including broader marketing or public
    disclosure, would be likely to undermine the effectiveness of the sale of business tool or the achievement of the resolution objective of avoiding significant adverse effects on financial stability.

19. Before applying paragraph 3 of this Article, the CBK shall record in writing the reasons for such
    determination, including the factors considered in relation to urgency, confidentiality, market confidence, contagion risk, operational feasibility and the suitability of potential purchasers.
    Article 10
    Entry into Force

This Regulation shall enter into force fifteen (15) days after its approval by the Board of the Central Bank of the Republic of Kosovo. Dr. Sc. Bashkim Nurboja Chairman of the Board of the Central Bank of the Republic of Kosovo