Resolution of the Board of the National Bank of the Kyrgyz Republic No. 2017-P-07/25-15-(NPA) of June 15, 2017 on Amendments and Additions to Certain Regulatory Legal Acts of the National Bank of the Kyrgyz Republic

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Creation date: 2017-06-20

Resolution of the Board

National Bank

of the

Kyrgyz Republic of June 15, 2017

No. 2017-P-07/25-15-(NPA)

On Amendments and Additions to Certain Regulatory Legal Acts of the National Bank of the Kyrgyz Republic

In accordance with Articles 7, 22, 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:

Make amendments and additions to the following regulatory legal acts of the National Bank of the Kyrgyz Republic (attached):

Resolution of the Board of the National Bank of the Kyrgyz Republic "On Approval of the Regulation "On Mandatory Reserve Requirements for Microfinance Companies Accepting Deposits" dated January 30, 2010 No. 1/1";
Resolution of the Board of the National Bank of the Kyrgyz Republic "On the Entry into Force of the Regulation "On Mandatory Reserve Requirements for Microfinance Companies Accepting Deposits" approved by Resolution of the Board of the National Bank of the Kyrgyz Republic No. 1/1 dated January 30, 2010" dated September 29, 2011 No. 55/15.

To the Legal Department:

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

This resolution enters into force on June 22, 2017.
To the Economic Department jointly with the Financial Statistics and Review Department to bring this resolution to the attention of microfinance companies accepting deposits.
Control over the implementation of this resolution is entrusted to the Deputy Chairman of the National Bank of the Kyrgyz Republic Zhenish N.

Chairman T. Abdygulov

Appendix
to the Resolution of the Board of the National Bank of the Kyrgyz Republic

of June 15, 2017

No. 2017-P-07/25-15-(NPA)

Amendments and Additions

to Certain Regulatory Legal Acts

of the National Bank of the Kyrgyz Republic

Make the following amendments and additions to the Resolution of the Board of the National Bank of the Kyrgyz Republic "On Approval of the Regulation "On Mandatory Reserve Requirements for Microfinance Companies Accepting Deposits" dated January 30, 2010 No. 1/1:

in the title and in paragraphs 1 and 2, replace the words "reserve requirements" with the word "reserves";

in the Regulation "On Mandatory Reserve Requirements for Microfinance Companies Accepting Deposits" approved by the aforementioned resolution:

in the title, replace the words "reserve requirements" with the word "reserves";
paragraph 1 is hereby worded as follows:

"1.

This Regulation establishes requirements for microfinance companies accepting deposits (hereinafter - MFCs) regarding the depositing of mandatory reserves with the National Bank of the Kyrgyz Republic (hereinafter - the National Bank), the procedure for complying with mandatory reserve requirements, and the calculation and collection of penalties for non-compliance."

the third sentence of paragraph 2 is hereby worded as follows:

"The calculation base is the som and foreign currency liabilities of the MFC accounted for in its deposit accounts. The list and currency structure of liabilities included in the calculation base are approved by the Board of the National Bank."

the third sentence of paragraph 3 is hereby worded as follows:

"The size of mandatory reserves may be changed by the Board of the National Bank for the purposes of monetary policy."

paragraph 5 is hereby worded as follows:

"5. MFCs are obliged to fulfill the MRR during the period of validity of the license for carrying out operations for the acceptance of term deposits, except for cases provided for in paragraph 15 of this Regulation."

paragraph 6 is hereby worded as follows:

"6. Mandatory reserves are calculated once for a four-week period, on the first working day of the current base period, and are determined based on the average daily calculation base for the previous base period and the size of mandatory reserves established by the Board of the National Bank. The established value of mandatory reserves is valid for the duration of the four-week base period. The som equivalent of foreign currency liabilities included in the calculation base is calculated at the official exchange rate of foreign currency against the som established by the National Bank."

the Regulation is supplemented with paragraph 6-1 of the following content:

"6-1. The calculation of mandatory reserves is performed using the following formula:

where ORt – mandatory reserves for the current base period;

OBt-1 – MFC liabilities included in the calculation base for each day of the previous base period;

R – the size of mandatory reserves established by the Board of the National Bank;

Dt-1 – the number of calendar days of the previous base period taken into account for mandatory reserves, i.e., 28 days."

the first and second sentences of paragraph 7 are hereby worded as follows:

"The calculation performed in accordance with paragraph 6-1 of this Regulation, certified by the signature of the head of the MFC, is submitted in the form according to Appendix 1 to the National Bank on the first working day of the new base period by 12:00."

paragraph 8 is hereby worded as follows:

"8. Control over the fulfillment of MRR is carried out at the end of the four-week base period. Reserve requirements are considered fulfilled if, overall for the base period, the difference between the sum of MFC funds in the deposit account at the National Bank and the amount of mandatory reserves is positive or equal to zero. Otherwise, it is considered that the MFC violated the MRR and a penalty for non-compliance is levied from it in accordance with the conditions defined in Section 3 of this Regulation."

paragraph 10 is recognized as having lost its force;
in the title of Section 3 of the Regulation, replace the word "payment" with the word "penalty";
paragraph 11 is hereby worded as follows:

"11. The amount of the penalty for non-compliance with MRR is calculated based on the size of the penalty for non-compliance with MRR established by the Board of the National Bank and the average daily negative deviation of funds in the MFC's deposit account at the National Bank from mandatory reserves for the base period."

the Regulation is supplemented with paragraph 11-1 of the following content:

"11-1. The calculation of the penalty for non-compliance with MRR is performed using the following formula:

where Shn – penalty for non-compliance with mandatory reserves;

Os – average daily deviation of the deposit account at the National Bank from mandatory reserves;

Rsh – the size of the penalty for non-compliance with MRR established by the Board of the National Bank;

D – the number of calendar days of the base period, i.e., 28 days.

An example of the calculation of the penalty amount for non-compliance with MRR is provided in Appendix 2."

in paragraph 12, replace the word "payment" with the word "penalty";
the second sentence of paragraph 13 is deleted;
in paragraph 15, replace the word "fee" with the word "penalty";
Appendix 1 to the Regulation is hereby worded as follows:

Appendix 2 to the Regulation is hereby worded as follows:

Make the following amendments to the Resolution of the Board of the National Bank of the Kyrgyz Republic "On the Entry into Force of the Regulation "On Mandatory Reserve Requirements for Microfinance Companies Accepting Deposits" approved by Resolution of the Board of the National Bank of the Kyrgyz Republic No. 1/1 dated January 30, 2010" dated September 29, 2011 No. 55/15: