Resolution of the Board of the National Bank of the Kyrgyz Republic No. 2020-P-33\24-3-(NFKU) of 22 April 2020 on Amending the Resolution of the Board of the National Bank of the Kyrgyz Republic "On Approving the Regulation 'On Operations Carried Out by Microfinance Organizations and Credit Unions in Accordance with Islamic Principles of Banking and Financing' of 26 October 2011 No. 60/8"

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Date of creation: 2020-04-23

Resolution of the Board

of the National Bank

of the Kyrgyz Republic

No. 2020-P-33\24-3-(NFKU)

dated 22 April 2020

On Amending

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

"On Approving the Regulation 'On Operations Carried Out by Microfinance Organizations and Credit Unions in Accordance with Islamic Principles of Banking and Financing' of 26 October 2011 No. 60/8"

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 Activities", the Board of the National Bank of the Kyrgyz Republic resolves:

1. To amend the Resolution of the Board of the National Bank of the Kyrgyz Republic "On Approving the Regulation 'On Operations Carried Out by Microfinance Organizations and Credit Unions in Accordance with Islamic Principles of Banking and Financing' of 26 October 2011 No. 60/8" (attached).

2. This resolution enters into force upon the expiry of fifteen days from the day of official publication.

3. 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 Normative Legal Acts of the Kyrgyz Republic.

4. To the Department for Supervision of Non-Bank Financial and Credit Organizations: bring this resolution to the attention of the Association of Legal Entities "Association of Microfinance Organizations", the Association of Legal Entities "National Association of Credit Unions and Cooperatives of Kyrgyzstan", the relevant microfinance organizations and structural subdivisions, regional departments and the representative office of the National Bank of the Kyrgyz Republic in Batken Oblast.

5. To assign control over the execution of this resolution to the member of the Board of the National Bank of the Kyrgyz Republic supervising the Department for Supervision of Non-Bank Financial and Credit Organizations.

Chairman

T. Abdygulov

Annex

to the Resolution of the Board

of the National Bank

of the Kyrgyz Republic

dated 22 April 2020

No. 2020-P-33/24-3-(NFKU)

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

"On Approving the Regulation 'On Operations Carried Out by

Microfinance Organizations and Credit Unions in Accordance

with Islamic Principles of Banking and Financing' of 26 October 2011 No. 60/8"

To introduce the following amendments to the Resolution of the Board of the National Bank of the Kyrgyz Republic "On Approving the Regulation 'On Operations Carried Out by Microfinance Organizations and Credit Unions in Accordance with Islamic Principles of Banking and Financing' of 26 October 2011 No. 60/8":

in the Regulation "On Operations Carried Out by Microfinance Organizations and Credit Unions in Accordance with Islamic Principles of Banking and Financing", approved by the above-mentioned resolution:

• supplement Chapter 2 "Sharik/Musharakah Contract/Partnership" with points 52-1 and 52-2 as follows:

"52-1. Contracts/partnerships applied in the agricultural sector:

1) Musaqat contract (irrigation partnership) – is a contract under which one party provides certain agricultural trees/plants to the other party, which tends to them, with the condition of dividing the harvest/fruit between the parties according to the shares determined upon conclusion of the contract.

2) Muzaraa contract – is a contract under which one party provides land to the other party for organizing agricultural work for a share of the harvest agreed upon conclusion of the contract.

3) Mugharasa contract – is a contract under which one party provides treeless land to the other party for planting trees on it with subsequent division of the trees and harvest/fruit in accordance with the coefficient agreed in the contract.

52-2. For the proper implementation of financing in accordance with Islamic principles of banking and financing for agricultural development, it is necessary to be guided by Sharia standards, and FCOs must have employees with relevant knowledge of Sharia standards to apply them in their work.".

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