NATIONAL BANK OF THE KYRGYZ REPUBLIC

RESOLUTION

dated 23 October 2013 No. 39/7

On Amendments and Additions to the Resolution of the Board of the National Bank of the Kyrgyz Republic No. 36/2 dated 29 August 2012 "On Approval of the Regulation "On Separate Transactions/Operations of Commercial Banks and Microfinance Companies of the Kyrgyz Republic with Real Estate""

In accordance with Articles 7 and 43 of the Law of the Kyrgyz Republic "On the National Bank of the Kyrgyz Republic", the Board of the National Bank of the Kyrgyz Republic

RESOLVES:

1. Approve the attached amendments and additions to the Regulation "On Separate Transactions/Operations of Commercial Banks and Microfinance Companies of the Kyrgyz Republic with Real Estate", approved by the Resolution of the Board of the National Bank of the Kyrgyz Republic No. 36/2 dated 29 August 2012.

2. To the Legal Department:

   • publish this resolution on the official website of the National Bank of the Kyrgyz Republic;
   • after official publication, forward this resolution to the Ministry of Justice of the Kyrgyz Republic for inclusion in the State Register of Normative Legal Acts of the Kyrgyz Republic.

3. This resolution shall enter into force after 15 days from the date of official publication.

4. The Supervision and Licensing Methodology Department shall convey this resolution to commercial banks, the State Development Bank of the Kyrgyz Republic and the Association of Microfinance Organizations.

5. Responsibility for monitoring the implementation of this resolution is assigned to the Deputy Chairman of the National Bank of the Kyrgyz Republic Z.L. Chokoev.

Chairman	Z. Asankozhoeva

	Appendix to the resolution of the Board of the National Bank of the Kyrgyz Republic dated 23 October 2013 No. 39/7

AMENDMENTS AND ADDITIONS to the Regulation "On Separate Transactions/Operations of Commercial Banks and Microfinance Companies of the Kyrgyz Republic with Real Estate", approved by the Resolution of the Board of the National Bank of the Kyrgyz Republic No. 36/2 dated 29 August 2012

Introduce into the Regulation "On Separate Transactions/Operations of Commercial Banks and Microfinance Companies of the Kyrgyz Republic with Real Estate", approved by the Resolution of the Board of the National Bank of the Kyrgyz Republic No. 36/2 dated 29 August 2012, the following amendments and additions:

1. In paragraph 20:
   • a) replace the words "estimated costs" with the words "estimated expenses";
   • b) delete the words "and without taking into account costs associated with the acceptance of real estate onto the bank's balance sheet (costs for legal registration of real estate, organization of auctions and other costs)";
   • c) add to the paragraph the following sentence:

"In this case, costs associated with the acceptance of the aforementioned real estate onto the bank's balance sheet (for legal registration of real estate, organization of auctions and other costs) are not taken into account. These costs are accounted for in accordance with paragraph 25 of this Regulation."

2. Paragraph 22 shall be worded as follows:

"An excess of the amount recorded in the "Other Property" category over the loan debt shall be recognized as the bank's obligation to return the surplus funds to the pledgee in the event of the sale of the real estate."

3. In paragraph 27:
   • a) add after the words "When accepting" the words "within the framework of an out-of-court procedure for the recovery of pledged property";
   • b) in subparagraph a) replace the word "cost" with the words "fair value";
   • c) add to the paragraph a paragraph with the following content:

"The bank's acceptance of real estate into the "Other Property" category within the framework of a judicial procedure for the recovery of pledged property shall be carried out in accordance with the legislation of the Kyrgyz Republic."

4. In subparagraph b) of paragraph 31, add the words ", including an analysis of solvency".

5. In paragraph 37, after the words "subsidiary companies of the bank" add the words ", parent companies,".

6. Add to the Regulation paragraph 37-1 with the following content:

"Banks with a one hundred percent state participation in capital may lease unused bank premises that have become their property prior to the bank's reorganization, until the controlling share of the bank's equity is transferred to other persons."