Regulation on the 7-Day Credit of the National Bank of the Kyrgyz Republic

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Date of creation: 2025-10-02

Approved by the Resolution of the Board of Directors of the National Bank of the Kyrgyz Republic No. 2/5 dated January 29, 2014

Regulation

"On the 7-Day Credit of the National Bank of the Kyrgyz Republic"

(In the edition of the Resolution of the Board of Directors of the National Bank of the Kyrgyz Republic dated March 19, 2014 No. 9/5, April 26, 2017 No. 17/3, October 25, 2017 No. 2017-P-09/45-9-(NPA), December 14, 2022 No. 2022-P-09/78-12-(NPA), June 27, 2025 No. 2025-P-09-31-3-(NPA), September 26, 2025 No. 2025-P-09-42/2-(NPA))

I. General Provisions

1. This Regulation "On the 7-Day Credit of the National Bank of the Kyrgyz Republic" (the Regulation) defines the procedure for the National Bank of the Kyrgyz Republic (National Bank) to provide commercial banks of the Kyrgyz Republic (Bank/Banks), licensed by the National Bank, with a 7-day loan to support short-term liquidity.

2. The 7-day credit is provided in accordance with Articles 6, 16, and 17 of the Constitutional Law of the Kyrgyz Republic "On the National Bank of the Kyrgyz Republic", this Regulation, and the General Agreement on 7-Day Credit (General Agreement), concluded between the National Bank and Banks. The standard form of the General Agreement is provided in Appendix 1 to this Regulation.

3. The 7-day credit is provided to Banks for the purpose of supporting short-term liquidity in national currency for a term of 7 (seven) calendar days at an interest rate determined through auction and/or a fixed interest rate announced by the National Bank, secured by collateral.

4. The minimum interest rate for participating in auctions and/or the fixed interest rate for the 7-day credit is set by the Monetary Policy Committee of the National Bank (MPC), based on the objectives and tasks of the monetary policy conducted by the National Bank.

5. The Bank's obligation to repay the 7-day credit is secured by collateral. The subject of collateral includes state securities of the Cabinet of Ministers of the Kyrgyz Republic, notes of the National Bank, and securities of international financial organizations issued and placed within the territory of the Kyrgyz Republic, provided that the issuer has a long-term sovereign credit rating not lower than the highest (AAA) and next highest (AA+), assigned by Moody's Investors Service (USA), Standard & Poors (USA), Fitch Ratings (UK) (hereinafter – securities). Requirements for the volume of sufficiency (in percentage), type, and other parameters of collateral in the form of securities are established by the MPC. Collateral transferred to the National Bank as pledge cannot be pledged or re-pledged to a third party.

II. Terms and Definitions Used

6. 7-day credit – a loan in som provided by the National Bank to Banks for a term of 7 (seven) calendar days at an interest rate determined through auction and/or a fixed interest rate announced by the National Bank, secured on an auction basis (by initiative of the National Bank) and/or based on a standing facility (by initiative of banks).

7. Depository – a legal entity of the Kyrgyz Republic carrying out accounting and storage of securities, registration of transfer, and confirmation of ownership rights to securities. For securities of international financial organizations, the Depository is CJSC "Central Depository".

8. Investment sub-balance of the "depot" account – a sub-balance of the Bank's "depot" account opened in the Depository for accounting and storage purposes for securities owned by the Bank.

9. Monetary Policy Committee (MPC) – a collegiate body of the National Bank, whose objective is to develop and promptly make decisions on current liquidity management.

10. General Agreement on 7-Day Credit (General Agreement) – an agreement concluded between the National Bank and Banks, defining general conditions and procedures for providing credit resources by the National Bank to Banks for liquidity support, and the procedure for regulating legal relations arising therefrom. The General Agreement is concluded in the form specified in Appendix 1 to this Regulation, provided that the Bank meets the conditions indicated in paragraph 12 of this Regulation.

III. Conditions for Providing 7-Day Credit

11. The 7-day credit is provided in compliance with general lending principles: term, cost, repayability, and security.

12. To obtain a 7-day credit, the Bank must:

• hold a license from the National Bank to conduct banking operations;
• not be in temporary administration and liquidation. A Bank under temporary administration may be granted a 7-day credit upon a corresponding resolution of the Board of Directors of the National Bank;
• have a correspondent account in national currency at the National Bank;
• have a signed General Agreement with the National Bank;
• not have overdue monetary obligations to the National Bank on previously obtained 7-day credits and interest thereon;
• not have overdue monetary obligations to the National Bank on other loans and interest thereon;
• have sufficient collateral meeting requirements established by the National Bank;
• be connected to the interbank communication network;
• provide the National Bank with a list of responsible persons of the Bank authorized to sign applications for obtaining credit resources, along with specimen signatures;
• provide the National Bank with two specimen signature cards of persons authorized to dispose of funds held in the Bank's accounts, notarized in accordance with Kyrgyz Republic legislation.

13. Issuance of the 7-day credit is carried out by the National Bank in the following ways:

• on an auction basis and/or;
• based on a standing facility.

13-1. Banks are not entitled to use credit resources obtained from the National Bank for operations in the foreign exchange market and securities market, including the state securities market. Banks must use the obtained credit resources of the National Bank exclusively for the purposes specified in paragraph 3 of this Regulation.

IV. Procedure for Processing and Submitting Applications for 7-Day Credit on an Auction Basis

14. The MPC periodically determines the parameters and conditions for conducting auctions, including volume, minimum interest rate, and minimum volume of one application.

15. Applications for participating in the auction to obtain a 7-day credit from the National Bank are submitted by banks to the National Bank in documentary form according to the template of Appendix 1 to the General Agreement. The application must be sealed in an opaque envelope. A bank may submit only one application to the auction.

16. The Bank's application must be submitted to the National Bank from 9:00 AM to 12:00 PM on the day of the auction. After the deadline for receiving applications, banks cannot submit/modify applications. In this case, applications are considered irrevocable.

17. Each page of the application must be certified by the signature of a person authorized to sign applications for obtaining credit resources on behalf of the Bank, and by the Bank's seal. The application must in mandatory contain the date of submission, name of the Bank, date of the auction, requested volume of credit funds, and proposed interest rate; at the same time, the Bank's application volume must not exceed the total volume of credit resources offered for auction.

18. The application must specify information on the loan amount, interest rate, collateral amount, with a detailed description of pledged securities according to the template of Appendix 1 to the General Agreement.

19. The documentary application must be placed in a box located on the first floor of the National Bank building, located at: Bishkek, Chui Ave., 168. The Bank must register the fact of application submission in the application registration log, indicating the date and time of submission.

20. Applications from banks with an interest rate higher than or equal to the minimum interest rate established by the National Bank are admitted to the auction.

21. Non-compliance of the Bank with the requirements of paragraph 12 of this Regulation is grounds for refusing to provide the Bank with the requested loan amount. The National Bank notifies banks in writing whose applications were not admitted to the auction, stating the reasons for non-admission within a period no later than the next working day after the auction.

22. Applications filled out or formatted incorrectly, as well as those submitted outside the time limit for receiving applications, are deemed invalid and not admitted to the auction.

23. The National Bank ensures confidentiality of information specified in the Bank's application.

24. The National Bank conducts the auction and forms the results, wherein:

• by decision of the Chairman of the MPC or his substitute, the volume of credit resources may be reduced based on the total volume of received applications. If fewer than two participants participate in the auction, it is deemed unsuccessful;
• applications are accepted starting from the application with the highest interest rate, until the total amount of proposed credit resources is fully distributed. Applications admitted to the auction are ranked by the level of the offered interest rate, starting from the maximum, until the established volume of credit resources for this auction is exhausted (up to the cutoff rate). In case multiple applications are submitted at the cutoff rate, distribution of credit resources among these applications is made on a proportional basis;
• credit resources obtained by Banks at the National Bank's auction are provided at the rates specified in the applications, but not lower than the interest rate established by the MPC decision.

25. Processing of applications admitted to the auction is carried out by the National Bank on the day of the auction from 1:00 PM to 3:00 PM.

26. Based on the auction results, a weighted average interest rate is calculated using the formula:
    where: P - weighted average interest rate at the end of the auction, Pi – interest rates of satisfied lots, qi - volumes of satisfied lots.

27. The National Bank publishes official auction results on the National Bank's website on the day of the auction by 4:00 PM, and sends participants an Notification (Appendix 3 to the General Agreement) on auction results.

28. Issuance of the 7-day credit is carried out by crediting monetary funds by the National Bank to the Bank's correspondent account at the National Bank, provided there is sufficient collateral according to paragraph 44 of this Regulation. Securities serving as collateral and specified in the Bank's application must be present on the investment sub-balance of the Bank's "depot" account.

29. The 7-day credit is issued on the next working day after the auction day by 12:00 PM. Upon issuing the credit, the National Bank preliminarily transfers the securities specified in the application from the investment to the pledge sub-balance of the Bank's "depot" account in the amount satisfied at the auction, in accordance with paragraph 44 of this Regulation.
    In case securities of international financial organizations are accepted as collateral, the transfer of securities is carried out by CJSC "Central Depository" in accordance with the general agreement between the National Bank and CJSC "Central Depository".

V. Procedure for Processing and Submitting Applications for 7-Day Credit Based on a Standing Facility

30. The MPC periodically determines the parameters and conditions for credit issuance based on a standing facility, including the fixed interest rate.

31. To obtain a 7-day credit based on a standing facility, the Bank must provide to the National Bank an Application for obtaining credit in documentary form within a working day, from 9:00 AM to 3:00 PM, filled out according to the established template (Appendix 2 to the General Agreement). After the deadline for receiving applications, banks cannot submit/modify applications. In this case, applications are considered irrevocable.

32. Each page of the application must be certified by the signature of a person authorized to sign applications for obtaining credit resources on behalf of the Bank, and by the Bank's seal. The application must in mandatory contain the date of submission, name of the Bank, requested volume of credit funds, and interest rate established by the MPC decision.

33. The application must specify information on the loan amount, interest rate, collateral amount offered as security, with a detailed description of pledged securities according to the established template (Appendix 2 to the General Agreement).

34. The documentary application must be placed in a box located on the first floor of the National Bank building, located at: Bishkek, Chui Ave., 168. The Bank must register the fact of application submission in the application registration log, indicating the date and time of submission.

35. Non-compliance of the Bank with the requirements of paragraph 12 of this Regulation is grounds for refusing to provide the Bank with the requested loan amount. The National Bank notifies Banks in writing of the reasons for refusal to provide credit within a period no later than the next working day after receiving the application.

36. Applications filled out or formatted incorrectly, as well as those submitted outside the time limit for receiving applications, are deemed invalid.

37. The National Bank ensures confidentiality of information specified in the Bank's Application.

38. Issuance of the 7-day credit is carried out by crediting monetary funds by the National Bank to the Bank's correspondent account at the National Bank, provided there is sufficient collateral according to paragraph 44. Securities specified in the Bank's application as collateral must be present on the investment sub-balance of the Bank's "depot" account.

39. The 7-day credit is issued by 12:00 PM on the next working day after the day of submission of the Bank's application. Upon issuing the credit, the National Bank preliminarily transfers the securities specified in the application from the investment to the pledge sub-balance of the Bank's "depot" account.
    In case securities of international financial organizations are accepted as collateral, the transfer of securities is carried out by CJSC "Central Depository" in accordance with the general agreement between the National Bank and CJSC "Central Depository".

VI. Calculation of Interest Amount on 7-Day Credit

40. The minimum interest rate for participating in auctions and/or the fixed interest rate for the 7-day credit is communicated to Banks via the National Bank's website.

41. Interest on the amount of the 7-day credit is calculated using a simple interest formula for the actual period of credit usage, based on 360 days in a year, according to the following formula:
    P = (C x I x T)/360/100, where:

• P – interest on the loan;
• C – amount of 7-day credit (som);
• I – interest rate for the 7-day credit (in % per annum);
• T – term of the provided loan (in days).

42. The calculation of the actual number of calendar days during which the Bank used the 7-day credit includes statutory or declared by the Cabinet of Ministers of the Kyrgyz Republic weekends and holidays.

VII. Security of 7-Day Credit

43. Collateral cannot be pledged or re-pledged to a third party.

44. The estimated (collateral) value of collateral must be not lower than the value (in percentage) established by the MPC depending on the requested loan amount.

45. Securities provided as security for