Resolution of the Board of the National Bank of the Kyrgyz Republic No. 2021-P-12/25-2-(NPA) of May 19, 2021 on Amendments to the Resolution on Temporary Rules for Asset Classification and Reserve Provisions

NATIONAL BANK OF THE KYRGYZ REPUBLIC

RESOLUTION

of May 19, 2021 No. 2021-P-12/25-2-(NPA)

On Amendments to the Resolution of the Board of the National Bank of the Kyrgyz Republic "On Temporary Rules for Asset Classification and Making Corresponding Provisions to Cover Potential Losses and Deficits by Commercial Banks and Certain Non-Bank Financial Credit Organizations" dated April 29, 2020 No. 2020-P-12/25-7-(NPA)

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 the following amendments to the Resolution of the Board of the National Bank of the Kyrgyz Republic "On Temporary Rules for Asset Classification and Making Corresponding Provisions to Cover Potential Losses and Deficits by Commercial Banks and Certain Non-Bank Financial Credit Organizations" dated April 29, 2020 No. 2020-P-12/25-7-(NPA):

in the Temporary Rules for Asset Classification and Making Corresponding Provisions to Cover Potential Losses and Deficits by Commercial Banks and Certain Non-Bank Financial Credit Organizations, approved by the aforementioned Resolution:

• point 12 is worded as follows:

"12. Banks have the right not to worsen the classification category of an asset when restructuring it due to changes in cash flows and the borrower's financial position, caused by restrictions aimed at containing the spread of the coronavirus infection, provided that such asset was restructured no more than 3 (three) times since March 1, 2020, subject to the following conditions:

• the overdue debt on the principal amount and/or interest on the restructured asset did not exceed 180 days;

• the bank conducted a thorough analysis of the borrower's financial condition (with corresponding calculations, financial indicators), which confirms the borrower's ability to make payments under the proposed restructuring plan.";

• point 13 is worded as follows:

"13. In the event of overdue debt arising on restructured assets (regardless of the number of restructurings) during the period from March 1, 2020, such assets are classified according to the classification category criteria established by these Temporary Rules.";

• point 14 is worded as follows:

"14. Upon conducting the fourth and subsequent restructurings of assets, the bank must downgrade the classification category by at least 1 category.".

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

3. Establish the validity period of points 12 and 14 of the Temporary Rules for Asset Classification and Making Corresponding Provisions to Cover Potential Losses and Deficits by Commercial Banks and Certain Non-Bank Financial Credit Organizations until September 1, 2021.

4. 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.

5. The Supervision and Licensing Methodology Department shall bring this Resolution to the attention of the Limited Liability Partnership "Union of Banks of Kyrgyzstan," commercial banks, the Development Bank of the Kyrgyz Republic, the Limited Liability Partnership "Association of Microfinance Organizations," microfinance companies attracting term deposits, JSC "Financial Company of Credit Unions," JSC "Guarantee Fund," relevant structural subdivisions, regional departments, and the representation 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 Supervision and Licensing Methodology Department.

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