Resolution of the Board of the National Bank of the Kyrgyz Republic No. 2022-P-33/37-2-(NFKU) of 15 June 2022 on Amending Certain Regulatory Legal Acts of the National Bank of the Kyrgyz Republic Regulating Credit Unions

BOARD OF THE NATIONAL BANK OF THE KYRGYZ REPUBLIC

RESOLUTION

of 15 June 2022 No. 2022-P-33/37-2-(NFKU)

On Amending Certain Regulatory Legal Acts of the National Bank of the Kyrgyz Republic Regulating Credit Unions

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 following resolutions of the Board of the National Bank of the Kyrgyz Republic (attached):

• "On the Rules for Regulating the Activities of Credit Unions in the Kyrgyz Republic" of 4 May 2005 No. 14/2;

• "On Approval of the Regulation 'On Licensing of Credit Unions'" of 23 December 2015 No. 78/25;

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 upon the expiry of fifteen days from the day of official publication.

4. To the Department for Supervision of Non-Bank Financial and Credit Organizations: bring this resolution to the attention of credit unions and the association of legal entities "National Association of Credit Unions and Cooperatives of Kyrgyzstan".

5. Control over the execution of this resolution shall be assigned 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	K. Bokontaev

	Annex to the Resolution of the Board of the National Bank of the Kyrgyz Republic of "15" June 2022 No. 2022-P-33/37-2-(NFKU)

Amendments

to Certain Regulatory Legal Acts of the National Bank of the Kyrgyz Republic Regulating Credit Unions

1. To introduce the following amendments to the Resolution of the Board of the National Bank of the Kyrgyz Republic "On the Rules for Regulating the Activities of Credit Unions in the Kyrgyz Republic" of 4 May 2005 No. 14/2:

in the Rules for Regulating the Activities of Credit Unions in the Kyrgyz Republic approved by the above-mentioned resolution:

• the fourth and fifth paragraphs of section "II. Terms and Definitions" shall be deemed to have lost force;

• clause 3.2. shall be deemed to have lost force;

in clause 5.1.:

• the second paragraph shall be restated as follows:

"When calculating the standard for the maximum amount of external borrowings of a credit union, the amount of external borrowings includes borrowings of the credit union provided for by the Law of the Kyrgyz Republic "On Credit Unions", as well as borrowings under state programs.";

• the third paragraph shall be deemed to have lost force;

• clause 5.1.1. shall be deemed to have lost force;

• clause 5.1.2. shall be restated as follows:

"5.1.2. For credit unions during the first year of activity, as well as credit unions attracting borrowings under state programs, the standard for the maximum amount of external borrowings (H1) is determined by the formula:

H1 ≤ TC x 4

The value of the standard for the maximum amount of external borrowings (H1) must not exceed four times the amount of total capital.";

• in clause 5.1.3., the figure and word "8 years" shall be replaced by the figure and word "1 year";

• clause 5.2.2. shall be deemed to have lost force;

• clause 5.2.3. shall be restated as follows:

"5.2.3. The standard for the maximum risk amount per one borrower (H2.2) is determined by the formula:

H2 = MB / TC x 100 ≤ 20%, where:

MB - the maximum amount of aggregate indebtedness on loans issued to one borrower;

TC - total capital of the credit union.

The value of the standard for the maximum risk per one borrower (H2) must not exceed 20% of total capital.";

• clause 5.3.3. shall be restated as follows:

"5.3.3. The amount of investments of a credit union in the capital of financial and credit organizations licensed by the National Bank must not exceed 15% of total capital.

The standard for the maximum amount of investments in the capital of financial and credit institutions (H3) is determined by the formula:

H3 = TI / TC x 100 ≤ 15%, where:

TI - the aggregate amount of investments in the capital of financial and credit institutions licensed by the National Bank, excluding investments in the capital of FCCU;

TC - total capital of the credit union.";

• in clause 5.3.4., the figures "10" shall be replaced by the figures "15";

• clause 5.4.2. shall be restated as follows:

"5.4.2. The standard for the maximum amount of investments in fixed assets (H4) is determined by the formula:

H4 = FA / TC x 100 ≤ 20%, where:

FA - the amount of investments in fixed assets (except fixed assets received in the form of grants and gratuitous assistance);

TC - total capital of the credit union.

The aggregate investments of a credit union in fixed assets, such as buildings, land, furniture and equipment (except fixed assets received in the form of grants and gratuitous assistance), which are necessary for the credit union to conduct its economic activity, may not exceed 20% of total capital.";

• in the second and eighth paragraphs of clause 5.5.1., the figure and sign "5%" shall be replaced by the figure and sign "2%";

• in the second paragraph of clause 5.6.2., after the figures "100", add the figures and signs "≥ 10%";

• clause 5.6.2. shall be supplemented with a paragraph of the following content: "The value of the institutional capital adequacy standard (H6-1) must be not less than 10%.";

• clause 5.6.3. shall be restated as follows:

"5.6.3. The total capital adequacy standard (H6-2) is determined by the following formula:

H6-2 = TC / TA x 100 ≥ 15%, where:

TC - total capital of the credit union;

TA - total assets of the credit union.

The value of the total capital adequacy standard (H6-2) must be not less than 15%.";

• clauses 5.6.4. and 5.6.5. shall be deemed to have lost force;

2. To introduce the following amendments to the Resolution of the Board of the National Bank of the Kyrgyz Republic "On Approval of the Regulation 'On Licensing of Credit Unions'" of 23 December 2015 No. 78/25:

in the Regulation on Licensing of Credit Unions approved by the above-mentioned resolution:

• clause 6 shall be supplemented with a second paragraph of the following content:

"In the event that all operations of the credit union are conducted in non-cash form and/or all operations are carried out through a settlement account in a commercial bank, the presence of a cash premises is not mandatory.";

• in clause 79, the second paragraph shall be restated as follows:

"- the credit union must surrender to the National Bank, within 3 (three) working days from the moment of adoption of the decision on liquidation, the licence (including the additional licence) and a notarized protocol of the general meeting on the voluntary liquidation of the credit union, signed by all participants who took part in the general meeting of the credit union;".