Resolution of the Board of the National Bank of the Kyrgyz Republic of 27 November 2024

No. 2024-П-12/63-1-(НПА)

On Amendments

to Certain Regulatory Legal Acts

of the National Bank of the Kyrgyz Republic

In accordance with Articles 5, 9 and 64 of the Constitutional Law of the Kyrgyz Republic "On the National Bank of the Kyrgyz Republic", the Board of the National Bank of the Kyrgyz Republic resolves:

• 1. To introduce amendments to the following resolutions of the Board of the National Bank of the Kyrgyz Republic (attached):

  • "On Certain Regulatory Legal Acts of the National Bank of the Kyrgyz Republic" of 30 June 2010 No. 52/4;

  • "On Approval of the 'Regulation on Minimum Requirements for Credit Risk Management in Conducting Operations in Accordance with Islamic Principles of Banking and Financing'" of 25 September 2013 No. 35/13;

  • "On Approval of the Regulation on Minimum Requirements for Credit Risk Management in Microfinance Organizations Not Attracting Deposits" of 25 September 2013 No. 35/14.

• 2. This resolution enters into force upon the expiry of 15 (fifteen) days from the day of official publication.

• 3. To the Legal Department:

  • from the day of receipt of the relevant documents, within 3 (three) working days, 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 Regulatory Legal Acts of the Kyrgyz Republic.

• 4. To the Supervision Methodology Department, within 3 (three) working days from the day of publication of this resolution, to bring it to the attention of commercial banks, the Legal Entity Union "Union of Banks of Kyrgyzstan", OJSC "Financial Company of Credit Unions", the Legal Entity Union "Association of Microfinance Organizations", and microfinance organizations.

• 5. To the "Secretariat of the Board" Division, within 3 (three) working days from the day of adoption of this resolution, to bring it to the attention of the Banking Supervision Department, the Non-Banking Organizations Supervision Department, the Legal Department, the Consumer Rights Protection Division, regional departments and the Representative Office of the National Bank of the Kyrgyz Republic in Batken Oblast.

• 6. To entrust control over the execution of this resolution to the member of the Board of the National Bank of the Kyrgyz Republic supervising the Supervision Methodology Department.

Chairman M. Turgunbaev

Annex
to the resolution of the Board of the National Bank of the Kyrgyz Republic of 27 November 2024 No. 2024-П-12/63-1-(НПА)

Amendments

to Certain Regulatory Legal Acts

of the National Bank of the Kyrgyz Republic

• 1. To introduce the following amendments to the resolution of the Board of the National Bank of the Kyrgyz Republic "On Certain Regulatory Legal Acts of the National Bank of the Kyrgyz Republic" of 30 June 2010 No. 52/4:

in the Regulation "On Minimum Requirements for Credit Risk Management in Commercial Banks and Other Financial and Credit Organizations Licensed by the National Bank of the Kyrgyz Republic", approved by the above-mentioned resolution:

• 1) to supplement with paragraph 3-3 with the following content:

"3-3. Cooling-off period – this is the period of time after the signing of the loan agreement during which the bank does not transfer funds to the borrower. During this period, the borrower has the right to refuse to receive the loan.";

• 2) to restate paragraph 34-3 in the following wording:

"34-3. The bank has the right to issue loans through a remote/distance service channel, subject to compliance with the requirements specified in the Regulation "On Minimum Requirements for the Provision of Remote/Distance Services in the Kyrgyz Republic", approved by the resolution of the Board of the National Bank of the Kyrgyz Republic of 15 April 2015 No. 22/3, other regulatory legal acts of the National Bank and in accordance with the internal policies and procedures of the Bank.

The amount of a loan issued through a remote/distance service channel must not exceed 200,000 soms (equivalent in foreign currency) under an agreement signed with a simple electronic signature, and 300,000 soms (equivalent in foreign currency) under an agreement signed with an enhanced electronic signature.

For loans issued through a remote/distance service channel by signing a loan agreement with an electronic signature, the following minimum cooling-off period is established, during which the bank cannot transfer funds to the borrower:

    - for loans from 15,000 soms to 50,000 soms – 3 hours;

    - for loans from 50,000 to 100,000 soms – 6 hours;

    - for loans over 100,000 soms – 24 hours.

At the same time, the bank must additionally conduct a verification call procedure during the above-mentioned cooling-off period for loans over 100,000 soms to obtain the client's confirmation for the loan issued through the remote/distance service channel, taking into account the client's risk profile in accordance with the bank's internal policy on anti-fraud systems.

The loan amounts for clients identified remotely are established in the Procedure for Identification and Verification of Clients in Remote Mode, approved by the resolution of the Board of the National Bank of the Kyrgyz Republic of 13.05.2020 No. 2020-П-12/27-1-(НПА).";

• 3) in the second paragraph of paragraph 36, replace the word "may" with the word "shall";

• 4) to supplement Annex 1 to the Regulation with paragraph 16-2 with the following content:

"16-2. In the electronic loan dossier of a borrower who received a loan through a remote/distance service channel, a recording of the verification call with the client must be stored in accordance with the requirements of paragraph 34-3 of this Regulation.".

• 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 Minimum Requirements for Credit Risk Management in Conducting Operations in Accordance with Islamic Principles of Banking and Financing'" of 25 September 2013 No. 35/13:

In the Regulation on Minimum Requirements for Credit Risk Management when Conducting Operations in Accordance with Islamic Principles of Banking and Financing, approved by the above-mentioned resolution:

• 1) supplement with paragraph 3-3 with the following content:

"3-3. Cooling-off period is the period of time after the signing of the contract during which the bank does not transfer funds to the client/partner. During this period, the client/partner has the right to refuse to receive the funds.";

• 2) restate paragraph 38-3 as follows:

"38-3. The bank has the right to issue an asset carrying credit risk through a remote/distance service channel, subject to compliance with the requirements specified in the Regulation "On Minimum Requirements for the Provision of Remote/Distance Services in the Kyrgyz Republic", approved by resolution of the Board of the National Bank of the Kyrgyz Republic of 15 April 2015 No. 22/3, other regulatory legal acts of the National Bank and in accordance with the internal policies and procedures of the Bank.

The amount of an asset carrying credit risk issued through a remote/distance service channel must not exceed 200 000 soms (equivalent in foreign currency) under a contract signed with a simple electronic signature, and 300 000 soms (equivalent in foreign currency) under a contract signed with an enhanced electronic signature.

For an asset issued remotely through a remote/distance service channel, carrying credit risk, by signing a contract with an electronic signature, the following minimum cooling-off period is established, during which the bank may not transfer funds to the client/partner:

    - for an asset carrying credit risk, from 15 000 soms to 50 000 soms – 3 hours;

    - for an asset carrying credit risk, from 50 000 to 100 000 soms – 6 hours;

    - for an asset carrying credit risk, over 100 000 soms – 24 hours.

At the same time, the bank must additionally conduct a verification call procedure during the above-mentioned cooling-off period for an asset carrying credit risk over 100 000 soms to obtain confirmation from the client/partner for the issuance of an asset carrying credit risk and issued through a remote/distance service channel, taking into account the client's risk profile in accordance with the bank's internal policy on anti-fraud systems.

The amounts of assets carrying credit risk for clients identified remotely are established in the Procedure for Identification and Verification of Clients in Remote Mode, approved by resolution of the Board of the National Bank of the Kyrgyz Republic of 13.05.2020 No. 2020-П-12/27-1-(НПА).";

• 3) in the second paragraph of paragraph 39, replace the word "may" with the word "must";

• 4) supplement Appendix 1 to the Regulation with paragraph 16-1 with the following content:

"16-1. The electronic file of a client/partner who has received an asset carrying credit risk through a remote/distance service channel must store a recording of the verification call with the client/partner in accordance with the requirements of paragraph 38-3 of this Regulation.".

• 3. To introduce into the resolution of the Board of the National Bank of the Kyrgyz Republic "On Approval of the Regulation on Minimum Requirements for Credit Risk Management in Microfinance Organizations Not Attracting Deposits" of 25 September 2013 No. 35/14 the following changes:

in the Regulation on Minimum Requirements for Credit Risk Management in Microfinance Organizations Not Attracting Deposits, approved by the above-mentioned resolution:

• 1) supplement paragraph 5 with a paragraph with the following content:

"- Cooling-off period is the period of time after the signing of the loan agreement during which the MFO does not transfer funds to the borrower. During this period, the borrower has the right to refuse to receive the loan.";

• 2) restate paragraph 10-1 as follows:

"10-1. The MFO has the right to issue loans through a remote/distance service channel subject to compliance with the requirements specified in the Regulation "On Minimum Requirements for the Provision of Remote/Distance Services in the Kyrgyz Republic", approved by resolution of the Board of the National Bank of the Kyrgyz Republic of 15 April 2015 No. 22/3, other regulatory legal acts of the National Bank and in accordance with the internal policies and procedures of the MFO.

The amounts of loans issued through a remote/distance service channel must not exceed 15 000 soms (equivalent in foreign currency) under contracts signed with a simple electronic signature, and 150 000 soms (equivalent in foreign currency) – under contracts signed with an enhanced unqualified electronic signature.

For loans issued through a remote/distance service channel by signing a loan agreement with an electronic signature, the following minimum cooling-off period is established, during which the MFO may not transfer funds to the borrower:

    - for loans from 15 000 soms to 50 000 soms – 3 hours;

    - for loans from 50 000 soms to 100 000 soms – 6 hours;

    - for loans over 100 000 soms – 24 hours.

At the same time, the MFO must additionally conduct a verification call procedure during the above-mentioned cooling-off period for loans over 100 000 soms to obtain confirmation from the client for the issuance of a loan issued through a remote/distance service channel.";

• 3) in the third paragraph of paragraph 38, replace the word "may" with the word "must";

• 4) supplement Appendix 1 to the Regulation with paragraph 13-1 with the following content:

"13-1. The electronic loan file of a borrower who has received a loan through a remote/distance service channel must store a recording of the verification call with the client in accordance with the requirements of paragraph 10-1 of this Regulation.".