Resolution of the Board of the National Bank of the Kyrgyz Republic No. 2017-P-12/30-3-(NPA) of July 6, 2017 on Amendments to the Resolution of the Board of the National Bank of the Kyrgyz Republic "On Approval of the Regulation "On the Supervisory Committee of the National Bank of the Kyrgyz Republic" dated March 19, 2005 No. 6/2

NATIONAL BANK OF THE KYRGYZ REPUBLIC

RESOLUTION

of July 6, 2017 No. 2017-P-12/30-3-(NPA)

On Amendments to the Resolution of the Board of the National Bank of the Kyrgyz Republic "On Approval of the Regulation "On the Supervisory Committee of the National Bank of the Kyrgyz Republic" dated March 19, 2005 No. 6/2

In accordance with Articles 20, 68, and 136 of the Law "On the National Bank of the Kyrgyz Republic, Banks and Banking Activity," the Board of the National Bank of the Kyrgyz Republic resolves:

1. To make amendments (attached) to the Resolution of the Board of the National Bank of the Kyrgyz Republic "On Approval of the Regulation "On the Supervisory Committee of the National Bank of the Kyrgyz Republic" dated March 19, 2005 No. 6/2.

2. This Resolution shall enter into force upon the expiration of fifteen days from the date of its official publication.

3. The Legal Department:

• to publish this Resolution on the official website of the National Bank of the Kyrgyz Republic;

• after official publication, to send this Resolution to the Ministry of Justice of the Kyrgyz Republic for inclusion in the State Register of Legal Acts of the Kyrgyz Republic.

4. The Supervision and Licensing Methodology Department to bring this Resolution to the attention of commercial banks, the State Development Bank, JSC "Financial Company of Credit Unions," microfinance organizations, credit unions, structural subdivisions, regional departments, and the Representation of the National Bank of the Kyrgyz Republic in the Batken Region.

5. To entrust the control over the implementation of this Resolution to Board Member of the National Bank of the Kyrgyz Republic T.D. Jusupov.

Chairman of the Board of the National Bank of the Kyrgyz Republic	T. Abdygulov

		Appendix to the Resolution of the Board of the National Bank of the Kyrgyz Republic dated July 6, 2017 No. 2017-P-12/30-3-(NPA)

AMENDMENTS to the Resolution of the Board of the National Bank of the Kyrgyz Republic "On Approval of the Regulation "On the Supervisory Committee of the National Bank of the Kyrgyz Republic" dated March 19, 2005 No. 6/2

To make the following amendments to the Resolution of the Board of the National Bank of the Kyrgyz Republic "On Approval of the Regulation "On the Supervisory Committee of the National Bank of the Kyrgyz Republic" dated March 19, 2005 No. 6/2:

in the Regulation on the Supervisory Committee of the National Bank of the Kyrgyz Republic approved by the aforementioned Resolution:

• in paragraph 1.1, replace the words "financial-credit institutions" with "financial-credit organizations";

• throughout the text, replace the abbreviation "FCI" with the abbreviation "FCO";

• rephrase paragraph 2.1 as follows:

"2.1. The Committee makes decisions on the application of the following types of impact measures in relation to an individual bank and/or other FCOs and on the cessation of impact measures:

a) an order to eliminate a violation; b) an order to bring activities into compliance; c) an order to perform certain actions; d) imposition of a fine on the bank and/or other FCOs and their officials; e) a requirement to conduct measures for financial rehabilitation, restructuring, and reorganization of the bank and other FCOs; f) a requirement to conduct a repeat/special external audit of the bank and other FCOs; g) a requirement to sell shares within a period specified by the National Bank; h) a requirement to reduce the administrative expenses of the bank; i) a requirement to change the organizational structure of the bank; j) a requirement to change policies, regulations, procedures, and other internal normative documents of the bank; k) a requirement to change the corporate (official) name of the bank; l) an increase in economic standards and requirements; m) the introduction of restrictions and prohibitions established in the Law "On the National Bank of the Kyrgyz Republic, Banks and Banking Activity"; n) dismissal or release of officials, change of management bodies; o) introduction of direct bank supervision; p) introduction of a temporary administration in a credit union; r) suspension and/or revocation of the license of a credit union; t) revocation of the license of an FCO for the right to carry out certain banking operations; u) suspension and/or revocation of the certificate of registration of an MFK/MKA.

The Committee considers other questions delegated to the Committee by the Board of the National Bank.

The Committee assesses the effectiveness of the decisions it has made on the application of impact measures in relation to banks and other FCOs and once every six months reports to the Board of the National Bank on the results of the application of impact measures in relation to banks and other FCOs.

Decisions of the Committee are subject to mandatory publication on the following issues:

• on the introduction of a temporary administration in a credit union;

• on the suspension/restriction of the validity of an FCO license;

• on the revocation of an FCO license;

• on the coordination of officials of banks and other FCOs;

• coordination of the name/name change of banks and other FCOs;

• on the suspension and/or revocation of the certificate of registration of an MFK/MKA.";

• rephrase paragraph 2.1-1 as follows:

"2.1-1. The Committee considers on a monthly basis:

• a report on activities and the implementation of the supervisory strategy for banks (in each month - a report on two banks);

• information on compliance/non-compliance of FCOs with economic standards, requirements based on the results of inspectorate checks and external supervision, as well as on the results of the application of regulatory supervisory measures in relation to FCOs.";

• recognize paragraph 2.1-2 as having lost force;

• rephrase paragraph 2.2 as follows:

"2.2. The Committee considers and makes decisions on the following issues:

a) determination of banking supervision and FCO supervision policy; b) adoption of regulatory supervisory measures in relation to banks and other FCOs; c) coordination of chairmen and members of the Board of Directors; Shariah Council; Chairman of the Board; Deputy Chairmen and members of the Board responsible for credit activities and activities based on Islamic financing principles; chairman of the audit committee; head of the internal audit service; chief accountant of the bank; d) granting consent for the acquisition of 50 (fifty) and more, 67 (sixty-seven) and more percent of voting shares of the bank; e) preliminary coordination of a new name for the bank; f) determination of further supervisory actions if necessary based on the results of checks of the bank and other FCOs; g) coordination of interaction of structural subdivisions of the National Bank on issues of regulation and supervision; h) coordination and strengthening of interaction with other supervisory bodies, both within the country and abroad; i) decision to transfer relevant materials to law enforcement agencies, as well as the State Financial Intelligence Service under the Government of the Kyrgyz Republic on issues for which decisions were made by the Committee; j) informing the public about facts of violations by the bank and other FCOs of legislative requirements; k) making changes to threshold values of criteria and/or introduction of new/abolition of existing criteria of bank significance; l) consideration of draft legal acts concerning regulation, supervision, and licensing of the activities of banks and other FCOs, if necessary; m) consideration of issues regarding antimonopoly regulation, development of competition, and protection of consumers of banking services (including issues of violation of pricing procedures, including establishment, maintenance of monopolistically high (low) prices; abuse of dominant position in the banking services market); n) establishment of facts of violation of the legislation of the Kyrgyz Republic; o) other issues delegated to the Committee by the Board of the National Bank.";

• rephrase the first sentence of paragraph 2.6 as follows:

"The Secretary of the Committee is appointed as an employee of the National Bank";

• in paragraph 3.3, replace the words "four members of the Committee" with the words "2/3 of the votes of the members of the Committee".