Resolution of the Board of the National Bank of the Kyrgyz Republic of 19 March 2025 No. 2025-P-12/11-7-(NFKU)

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 Approval of the Regulation "On Classification of Assets and Corresponding Allocations to the Reserve for Covering Potential Losses and Damages" of 21 July 2004 No. 18/3;

• "On Approval of the "Procedure for Applying Special Classification of Loans Meeting Certain Criteria" of 2 March 2006 No. 5/6;

• "On Approval of the Regulation "On Minimum Requirements for Organizing Internal Control in Commercial Banks for the Purpose of Countering the Financing of Terrorist Activities and Legalization (Laundering) of Criminal Proceeds", the Regulation "On the Procedure for Conducting Exchange Operations with Cash Foreign Currency in the Kyrgyz Republic" and Introducing Amendments and Additions to Certain Regulatory Legal Acts of the National Bank of the Kyrgyz Republic on Issues of Countering the Financing of Terrorist Activities and Legalization (Laundering) of Criminal Proceeds" of 14 August 2019 No. 2019-P-12/42-1-(NPA);

• "On Approval of the Regulation "On Classification of Assets and Formation of Reserves for Covering Potential Losses and Damages by Non-Bank Financial and Credit Organizations" of 28 December 2020 No. 2020-P-33/75-4-(NFKU).

2. 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.

3. This resolution enters into force upon the expiration of 15 (fifteen) days from the day of official publication, except for the amendments to paragraph 15 of the Regulation "On the Procedure for Conducting Exchange Operations with Cash Foreign Currency in the Kyrgyz Republic", which enter into force on 1 May 2025.

4. To the Supervision Methodology Department, within 3 (three) working days from the day of official publication of this resolution, to bring it to the attention of the Union of Legal Entities "Union of Banks of Kyrgyzstan", the Union of Legal Entities "Association of Microfinance Organizations", the Union of Legal Entities "National Association of Credit Unions and Cooperatives of Kyrgyzstan", the Union of Legal Entities "Association of Exchange Bureaus "Alliance", commercial banks, microfinance organizations, credit unions, OJSC "Guarantee Fund" and exchange bureaus.

5. To the "Secretariat of the Board" Department, within 3 (three) working days from the day of adoption of this resolution, to bring it to the attention of structural subdivisions, 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

Appendix
to the resolution of the Board of the National Bank of the Kyrgyz Republic of 19 March 2025 No. 2024-P-12/11-7-(NFKU)

Amendments to Certain Regulatory Legal Acts

of the National Bank of the Kyrgyz Republic

1. To introduce to the resolution of the Board of the National Bank of the Kyrgyz Republic "On Approval of the Regulation "On Classification of Assets and Corresponding Allocations to the Reserve for Covering Potential Losses and Damages" of 21 July 2004 No. 18/3 the following amendment:

in the Regulation "On Classification of Assets and Corresponding Allocations to the Reserve for Covering Potential Losses and Damages", approved by the above-mentioned resolution:

• to supplement paragraph 6.3 with a sentence of the following content:

"When the interest rate on an existing loan is reduced (without deterioration of the borrower's financial position) to a level not exceeding on the day of reduction the amount of the maximum permissible interest rate established by the Law of the Kyrgyz Republic "On Limiting Usurious Activity in the Kyrgyz Republic", the classification of this loan from the day of the interest rate reduction must be carried out in accordance with the requirements of this Regulation.".

2. To introduce to the resolution of the Board of the National Bank of the Kyrgyz Republic "On Approval of the "Procedure for Applying Special Classification of Loans Meeting Certain Criteria" of 2 March 2006 No. 5/6 the following amendments:

in the Procedure for Applying Special Classification of Loans Meeting Certain Criteria, approved by the above-mentioned resolution:

• to supplement the fourth paragraph of paragraph 2.3 with a sentence of the following content:

"At the same time, when the interest rate on an existing loan is reduced (without deterioration of the borrower's financial position) to a level not exceeding on the day of reduction the amount of the maximum permissible interest rate established by the Law of the Kyrgyz Republic "On Limiting Usurious Activity in the Kyrgyz Republic", the special classification from the day of the interest rate reduction may not be applied.";

• to restate paragraph 2-1.2 in the following wording:

"2-1.2. In cases where a borrower – an individual, including an individual entrepreneur without forming a legal entity, has, in addition to a loan received from a given bank/FCO as part of a group of joint liability, any other individual loan or a loan issued as part of the same or any other group of joint liability, in any other bank/FCO, then all loans of the borrower – an individual, including an individual entrepreneur without forming a legal entity, received from the given bank/FCO and subject to special classification in accordance with this Procedure, must be classified at least as "assets under supervision".»;

• The table "Special classification of loans and corresponding deductions to RPPU" in paragraph 3.2 shall be stated in the following wording:

"Special classification of loans and corresponding deductions to RPPU

Classification category

Number of days of overdue scheduled payments

RPPU

Satisfactory

0-3

2%

Under supervision

4-29

5%

Substandard

30-59

25%

Doubtful

60-89

50%

Losses

90 and more

100%

";

• paragraph 4.5 shall be stated in the following wording:

"4.5. In cases where several loans meeting the criteria established in paragraph 2.1 of this Procedure have been issued to one person in a given bank/FCO, special classification must be applied if the aggregate amount of all loans does not exceed the quantitative limit specified in paragraph 2.1. At the same time, such loans must be classified according to the worst of the classification categories applied to them.";

• in paragraph 4.7, the figure "10" shall be replaced by the figure "5".

3. 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 the organization of internal control in commercial banks for the purposes of countering the financing of terrorist activities and the legalization (laundering) of criminal proceeds', the Regulation 'On the procedure for conducting exchange operations with cash foreign currency in the Kyrgyz Republic' and on introducing amendments and additions to certain normative legal acts of the National Bank of the Kyrgyz Republic on issues of countering the financing of terrorist activities and the legalization (laundering) of criminal proceeds" dated 14 August 2019 No. 2019-П-12/42-1-(НПА):

in the Regulation "On the procedure for conducting exchange operations with cash foreign currency in the Kyrgyz Republic", approved by the above-mentioned resolution:

• the seventh paragraph of paragraph 15 shall be stated in the following wording:

"Banks, exchange bureaus, MFIs, MCCs, CSs, SFIs shall not be entitled to establish and charge a commission fee when conducting exchange operations with foreign currency banknotes that do not raise doubts as to their authenticity, including in the presence of a seal and/or stamp, except for US dollar banknotes up to and including the 2006 year of issue that have not lost the status of a means of payment. At the same time, the amount of the commission fee must be justified taking into account the expenses associated with the export of the above-mentioned cash US dollars.".

4. To introduce the following amendment to the resolution of the Board of the National Bank of the Kyrgyz Republic "On approval of the Regulation 'On the classification of assets and formation of reserves to cover potential losses and damages by non-bank financial and credit organizations'" dated 28 December 2020 No. 2020-П-33/75-4-(НФКУ):

in the Regulation "On the classification of assets and formation of reserves to cover potential losses and damages by non-bank financial and credit organizations", approved by the above-mentioned resolution:

• paragraph 81 shall be supplemented with a sentence of the following content:

"When the interest rate on an existing loan is reduced (without deterioration of the borrower's financial position) to a level not exceeding on the day of reduction the amount of the maximum permissible interest rate established by the Law of the Kyrgyz Republic "On restricting usurious activity in the Kyrgyz Republic", classification of this loan from the day of the interest rate reduction must be carried out in accordance with the requirements of this Regulation.".