Resolution of the Board of the National Bank of the Kyrgyz Republic No. 2019-P-14/56-4-(PS) of 15 November 2019 on Amendments to the Resolution of the Board of the National Bank of the Kyrgyz Republic "On Approval of the Regulation "On Bank Payment Cards of the Kyrgyz Republic" dated 9 December 2015 No. 76/8

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Creation date: 2019-11-19

Resolution of the Board

National Bank

of the

Kyrgyz Republic

of "15" November 2019

No. 2019-P-14/56-4-(PS)

On Amendments

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

"On Approval of the Regulation "On Bank Payment Cards of the Kyrgyz Republic"" dated 9 December 2015 No. 76/8

In accordance with Articles 20 and 68 of the Law of the Kyrgyz Republic

"On the National Bank of the Kyrgyz Republic, Banks and Banking Activity" the Board of the National Bank of the Kyrgyz Republic resolves:

1. Make amendments to the Resolution of the Board of the National Bank of the Kyrgyz Republic "On Approval of the Regulation "On Bank Payment Cards in the Kyrgyz Republic" dated 9 December 2015 No. 76/8 (attached).

2. 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.

3. This resolution enters into force after the expiration of fifteen days from the date of official publication.

4. The Payment Systems Department shall bring this resolution to the attention of commercial banks, the Non-Commercial Legal Entity "Association of Microfinance Organizations" and CJSC "Interbank Processing Center".

5. The Department for the Development of the State Language and Document Flow shall bring this resolution to the attention of the relevant structural subdivisions, regional departments, and the representative office of the National Bank in the Batken region.

6. Control over the implementation of this resolution is entrusted to the Member of the Board of the National Bank of the Kyrgyz Republic, overseeing the Payment Systems Department.

Chairman T. Abdygulov

Appendix

to the Resolution of the Board

of the National Bank

of the Kyrgyz Republic

of "15" November 2019

No. 2019-P-14/56-4-(PS)

On Amendments

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

"On Approval of the Regulation "On Bank Payment Cards

in the Kyrgyz Republic" dated 9 December 2015 No. 76/8"

1. Make the following amendments to the Resolution of the Board of the National Bank of the Kyrgyz Republic "On Approval of the Regulation "On Bank Payment Cards in the Kyrgyz Republic" dated 9 December 2015 No. 76/8":

in the Regulation "On Bank Payment Cards in the Kyrgyz Republic", approved by the aforementioned resolution:

• in the title of the Regulation, in the text in the state language, replace the words "in the Kyrgyz Republic" with "in the Kyrgyz Republic";

• in paragraph 2:

• in the text in the state language, replace the words "on bank payment cards" with "on bank payment cards in the Kyrgyz Republic";

• the words "On the Electronic Document and Electronic Digital Signature",

"On Countering the Legalization (Money Laundering) of Criminal Proceeds and Financing of Terrorist or Extremist Activity" replace with the words "On Electronic Signature", "On Countering the Financing of Terrorist Activity and Legalization (Money Laundering) of Criminal Proceeds" (hereinafter referred to as AML/CFT);

• in paragraph 5:

• in the thirty-third paragraph, replace the abbreviation "AML/CFT" with the abbreviation "AML/CFT";

• rephrase the forty-third paragraph as follows:

"Trading and Service Enterprise (TSE) – a legal entity or individual entrepreneur that, in accordance with a contract concluded with the acquirer, accepts cards for payment of goods or services, issuance of cash funds with the preparation of documents confirming the completion of card transactions. Cash funds held on a bank card may be issued only in the presence of an agency agreement with commercial banks and in accordance with limits established by regulatory legal acts of the National Bank, provided that the requirements of the legislation of the Kyrgyz Republic on AML/CFT are met regarding the agent's carrying out of corresponding measures for simplified identification and verification of the cardholder using a risk-based approach";

• in the forty-ninth paragraph, replace the word "computer networks" with the words "internet (space)";

• supplement with paragraphs of the following content:

"Credit Card or card with a credit limit of a non-bank financial-credit organization (hereinafter – NFCO credit card) –

a bank payment card issued by a bank for its clients/cardholders or for a non-bank financial-credit organization having a license/certificate of the National Bank for the right to conduct banking operations for issuing/repaying credits/financing in accordance with the terms of the credit agreement/financing agreement with the issuer for their subsequent distribution."

"User of an NFCO credit card – a client (individual/legal entity) to whom the NFCO issues cash funds (credit/financing) to NFCO credit cards and accepts repayments, in accordance with the concluded agreement and in accordance with the regulatory legal acts of the National Bank."

"Bank Kiosk

– a special structure/equipment intended for the installation of peripheral devices";

• in paragraph 7:

replace the words "debit card with overdraft (debit-credit) and credit card" with the words "debit card with overdraft (debit-credit), credit card and NFCO credit card";

• in paragraph 13:

rephrase the third paragraph as follows:

"The absence of the cardholder's surname and name is permitted if:

• the card is pre-issued and has a limited validity period (no more than 3 years), with unambiguous identification of the cardholder by the issuing bank;

• an NFCO credit card with unambiguous identification by the NFCO.

Transactions via pre-issued and NFCO credit cards through peripheral devices and mobile applications of payment system participants are carried out using a PIN code and passwords.

Users of NFCO credit cards have the right to make payments and settlements, in accordance with the intended purpose of the received credit/financing."

• supplement paragraph 14 with a second paragraph of the following content:

"Replenishment of an NFCO credit card via the money transfer system without opening an account is permitted only for the purpose of repaying credit debt in an amount that, in total, does not exceed the amount of debt, subject to compliance with customer due diligence measures in accordance with the requirements of the legislation of the Kyrgyz Republic on AML/CFT. Replenishment of an NFCO credit card for purposes other than those stipulated in the credit agreement is not permitted."

• rephrase paragraph 19 as follows:

"19. In the event that a payment is recognized as erroneous or unauthorized after final settlement, the payment system must provide a separate procedure for the mandatory return of funds to the cardholder's bank account and subsequent settlement of disputes regarding such payments, as well as a separate procedure for the return of funds to users of NFCO credit cards who do not have a bank account. During the period of dispute settlement, the disputed amount of funds may be blocked in the cardholder's bank account and in the NFCO's current (loan) account. The conditions for resolving disputes between the issuer and the cardholder, the issuer and the NFCO, and the users of NFCO credit cards, as well as penalty sanctions for such operations, must be established in the agreement between them, as well as in the regulations and procedures of the corresponding payment system. Resolution of disputes between the cardholder and the TSE is carried out on the basis of the legislation of the Kyrgyz Republic and is not part of the regulation by the rules and agreements of the system."

• rephrase paragraph 24 as follows:

"24. Payment of pensions, social benefits and other income/payments from budget funds, as well as salaries within the framework of salary projects of budget organizations and economic entities with a share of direct state participation of more than 50% must be carried out by the bank exclusively via the national "Elkart" card."

• supplement paragraph 25 with a second paragraph of the following content:

"NFCO credit cards are issued by the bank, in accordance with paragraph 35-1 of this Regulation."

• rephrase paragraph 27 as follows:

"27. The bank issuing cards is obliged to comply with the requirements of legislation on AML/CFT."

• supplement paragraph 29 with a second paragraph of the following content:

"Credit cards issued by the bank for NFCOs are the property of the issuer, which must be established in the agreement between the bank and the NFCO. The process of transferring cards to clients for their subsequent use and retrieval upon expiration of the card's validity period or in case of termination of service is carried out by the NFCO."

• in paragraph 30, replace the word "fraudulent" with the word "unauthorized";

• rephrase paragraph 31 as follows:

"31. When concluding a contract, the issuer is obliged to identify the cardholder in accordance with the rules applied when opening a bank account on the principle of "know your customer", and the legislation of the Kyrgyz Republic, with the exception of users of NFCO credit cards, whose identification is carried out by the NFCO in accordance with the legislation on AML/CFT. Identification data of the NFCO client must be linked to the NFCO credit card number."

• supplement the Regulation with paragraph 31-1 of the following content:

"31-1. The issuer, when issuing cards for NFCOs, must conclude an agreement with the NFCO on customer due diligence and reliance on third parties in accordance with the Regulation "On the Procedure for Conducting Customer Due Diligence", approved by the Resolution of the Government of the Kyrgyz Republic dated 25 December 2018 No. 606."

• rephrase paragraph 32 as follows:

"32. The issuer and the NFCO are obliged, prior to signing the card issuance application and concluding the contract, to familiarize the cardholder/user of NFCO credit cards with:

• the terms of the contract;

• the rules for safe use of the card;

• the tariffs for services provided;

• the methods of obtaining information about each completed transaction, blocking cards to prevent unauthorized access to the client's account;

• contact information for communication between the cardholder and the bank and NFCO during non-working hours and weekends (holidays);

• the terms for crediting funds to NFCO credit cards and the moment of accrual of interest (from the date of receipt of funds/from the date of withdrawal of funds from the card/from the date of transfer of funds, directed for the purchase of goods or services, etc.);

• the procedure for repaying the credit if the repayment will be carried out on weekends and holidays in non-cash form;

• the procedure for issuing cash from the NFCO or bank cash desk in case of loss of the NFCO credit card;

• and others.

The client confirms receipt of the specified information in writing or using remote banking services. The rules for safe use of the card must be included in the contract or attached to it.

The NFCO client must confirm receipt of the specified information in writing. The rules for safe use of the card must be included in the contract or attached to it."

• in sub-paragraph 8 of paragraph 33, replace the word "fraudulent" with the word "unauthorized";

• supplement the Regulation with paragraph 33-1 of the following content:

"33-1. When issuing NFCO credit cards, the contract with the NFCO card users must reflect the following mandatory conditions for providing card services:

1) personal data of the user of the NFCO credit card (surname, first name, patronymic, passport data (or data of another document confirming identity in accordance with the legislation of the Kyrgyz Republic);

2) rights, duties and responsibility of the NFCO to its clients regarding operations with the NFCO credit card;

3) types and size of commissions payable by the user of the NFCO credit card, as well as the procedure for informing about changes in tariffs, card validity period or other card usage conditions, new products, and other information;

4) main requirements for compliance with user security (use of PIN code, limits, actions in case of loss or theft of the card);

5) procedure for informing the NFCO about the fact of loss, theft or use of the card by an unauthorized person;

6) distribution of responsibility between parties in case of loss, theft or use of the card by an unauthorized person, including fraudulent operations;

7) conditions for blocking and retrieval of the NFCO card;

8) distribution of risks and responsibility between parties in case of violation of security procedures or other contract conditions;

9) procedure for consideration of disputes/complaints;

10) procedure for termination of the contract and cancellation of the NFCO credit card;

11) additional conditions in accordance with the legislation of the Kyrgyz Republic."

• supplement the Regulation with paragraph 35-1 of the following content:

"35-1. When issuing an NFCO card, cash funds (credit) are issued by debiting funds from the NFCO's current (loan) account opened in this bank by the servicing bank, in accordance with the terms of the contract on the issuance and distribution of credit cards.

Confirmation of the receipt of credit on NFCO cards without using the crediting of funds to the NFCO card user's bank account is the opening of a credit limit by the NFCO for the amount of the approved credit.

The procedure/terms for crediting the credit, opening a credit limit and repayment are carried out in accordance with the credit agreement between the NFCO and its client."

• in paragraph 36, replace the words "on countering money laundering and financing of terrorism" with the abbreviation "AML/CFT";

• in paragraph 40:

sub-paragraph 1, after the word "contract", supplement with the words ", or non-compliance by the NFCO with the terms of the contract on the issuance of cards and their subsequent distribution";

rephrase the seventh paragraph as follows:

"In the event of unilateral termination of card service, the issuer/NFCO must notify the cardholder/user of the NFCO credit card of this in the manner established by the contract."

• rephrase paragraph 42 as follows:

"42. The terms and methods of notifying the issuer/NFCO and submitting an application by the cardholder/users of NFCO credit cards regarding loss, theft or unauthorized use of the card are established by the terms of the contract. The cardholder/user of the NFCO credit card bears responsibility for the timeliness of submitting the application. From the moment of submitting this application, responsibility for all operations using the lost or stolen bank card is imposed on the issuer."

• rephrase paragraph 43 as follows:

"43. The issuer does not bear responsibility to the cardholder and the NFCO in cases:

• if the cardholder/user of the NFCO credit card violated the rules and procedures established in the contracts concluded between them regarding the use of the card and PIN code;

• in the event of illegal actions on the part of the cardholder/NFCO/user of the NFCO credit card.

In any disputed situation, the issuer, upon request of the cardholder, must provide full information, including from the payment system's processing center regarding completed transactions, to confirm the validity of debiting funds from the cardholder's account.

In the event of disputed situations with the user of NFCO credit cards, upon request of the user of the NFCO credit card, the bank-issuer, with the consent of the NFCO, must provide full information to its client, including from the payment system's processing center regarding completed transactions with the NFCO credit card.

This requirement does not apply to operations using the card's magnetic stripe and to e-commerce operations not protected by multi-factor authentication."

• in the twelfth and thirteenth paragraphs of paragraph 53, replace the word "fraudulent" with the word "unauthorized";

• rephrase Appendix 3 to the Regulation as follows:

" Appendix 3

to the Regulation "On Bank Payment Cards

in the Kyrgyz Republic"

REPORT

on the registry of peripheral devices

Name of the bank: ______

Tax Identification Number of the bank: ______

OKPO of the bank: ______

As of "_" ______ 20 year

No.

p/p

Type of peripheral device

ID of the peripheral device

Location of the peripheral device

Name of payment systems serviced by the peripheral device

Currency

Access Period

Location

Region

District

Rural District

City/urban-type settlement/village

Street

Chairman of the Board (signature, seal)

Deciphering of signature

RULES

for filling out the report on the registry of peripheral devices

1. The registry of peripheral devices reflects information about peripheral devices providing remote access to the client's bank account via payment cards, as well as without using payment cards (payment terminals), indicating their specific location and minimal information about the device itself.

2. In column 2 "Type of peripheral device", the type of device is indicated: POS-terminal-TSE, POS-terminal-PVN, cash-in-terminal, cash out ATM, cash out ATM + cash-in, virtual POS-terminal, mPOS or other peripheral device.

3. In column 3 "ID of the peripheral device", the identification numbers of the device are indicated, according to the registration numbers of the banks.

4. In column 4 "Location", the name of the place where the device is located is indicated (TSE, organization, etc.). For virtual POS-terminals (V-POS), the web address is indicated.

5. In column 5 "Region", the name of the region of the Kyrgyz Republic is indicated in accordance with the reference book of the National Statistical Committee of the Kyrgyz Republic "Classifier of Administrative-Territorial Units – COATE".

6. In column 6 "District", the name of the district of the region is indicated in accordance with the reference book of the National Statistical Committee of the Kyrgyz Republic "Classifier of Administrative-Territorial Units – COATE".

7. In column 7 "Rural District", the name of the rural district of the district is indicated in accordance with the reference book of the National Statistical Committee of the Kyrgyz Republic "Classifier of Administrative-Territorial Units – COATE".

8. In column 8 "City/urban-type settlement/village", the name of the city, district centers, urban-type settlement, village is indicated in accordance with the reference book of the National Statistical Committee of the Kyrgyz Republic "Classifier of Administrative-Territorial Units – COATE".

9. In column 7 "Street", the name of the street is indicated. In the event that peripheral devices are installed in places without a specific address (name of street, No.), more detailed information is indicated in column 4 "Location", i.e., the name of the organization, structural subdivision of this organization, etc.

10. In column 10 "Name of payment systems serviced by the peripheral device", the name of the payment systems serviced by this device is indicated (Elkart, VISA, MasterCard, UnionPay, etc.).

11. In column 11 "Currency", the codes of currencies issued or accepted by this device are indicated (KGS, USD, EUR, etc.).

12. In column 12 "Access Period", the time/period of access to this device is indicated.

A cover letter must be attached to the report, which reflects information on changes made (installation/retrieval and relocation of banking equipment).

Reports/notices must be provided in the form and timeframes established by the National Bank. Commercial banks are responsible for strict compliance with all conditions and requirements of this Regulation, including providing timely and correct information."

• Appendix 4 to the Regulation "On Bank Payment Cards in the Kyrgyz Republic" is recognized as having lost force."

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