Resolution of the Board of the National Bank of the Kyrgyz Republic No. 22/6 of April 15, 2015 on Amendments to Certain Board Resolutions

NATIONAL BANK OF THE KYRGYZ REPUBLIC

RESOLUTION

of April 15, 2015 No. 22/6

On Amendments and Additions to Certain Resolutions of the Board of the National Bank of the Kyrgyz Republic

In accordance with Articles 7 and 43 of the 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. Make amendments and additions to the following resolutions of the Board of the National Bank of the Kyrgyz Republic (attached):

• "On Approval of the New Edition of the Regulation "On Asset Classification and Corresponding Provisions to the Reserve for Covering Potential Losses and Losses" dated July 21, 2004 No. 18/3;

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

2. This resolution applies to newly issued and restructured loans after this resolution enters into force.

3. This resolution enters into force upon the expiration of fifteen days from the date of official publication.

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 commercial banks, the specialized financial-credit institution JSC "Financial Company of Credit Unions", the State Development Bank of the Kyrgyz Republic, regional offices, and the branch of the National Bank of the Kyrgyz Republic in the Batken region.

6. Control over the implementation of this resolution is entrusted to the Deputy Chairman of the National Bank of the Kyrgyz Republic L. Orozbaeva.

Acting Chairman of the Board	N. Zhenish

Appendix

AMENDMENTS AND ADDITIONS to certain resolutions of the Board of the National Bank of the Kyrgyz Republic

1. Make the following amendments and additions to the Resolution of the Board of the National Bank of the Kyrgyz Republic "On Approval of the New Edition of the Regulation "On Asset Classification and Corresponding Provisions to the Reserve for Covering Potential Losses and Losses" dated July 21, 2004 No. 18/3:

in the Regulation "On Asset Classification and Corresponding Provisions to the Reserve for Covering Potential Losses and Losses" approved by the aforementioned Resolution:

• in the second sentence of paragraph 3.8, after the words "classification category", add the words ", unless otherwise provided by this Regulation";

• add paragraph 4.2.3 as follows:

"4.2.3. The Bank must classify a foreign currency loan at least as a 'satisfactory' asset if the borrower who received this loan has foreign currency income accounting for more than 75 percent of the total volume of their total income;"

• in paragraph 4.3.2:

in paragraph 9, replace the semicolon ";" after the word "loan" with a period ".";

exclude paragraph 10;

• add paragraphs 4.3.3 and 4.3.4 as follows:

"4.3.3. The Bank must classify a foreign currency loan at least as an 'asset under review' if the borrower who received this loan has foreign currency income accounting for 50 to 75 percent of the total volume of their total income.

4.3.4. The Bank must classify a foreign currency loan at least as an 'asset under review' if the borrower who received this loan has foreign currency income accounting for less than 50 percent of the total volume of their total income.";

• rephrase paragraph 13.4 as follows:

"13.4. The National Bank establishes the following sizes of provisions to the Reserve for Covering Potential Losses and Losses (RPPU) for assets:

General Reserves		Special Reserves
Normal	0%	Substandard	25%;
Satisfactory	2/2.5%	Doubtful	50%;
Assets under review	5/7.5%	Loss	100%.

For 'satisfactory' assets, the Bank must form RPPU in the amount of 2%, except for assets specified in paragraph 4.2.3 of this Regulation, for which the RPPU size must be 2.5%.

For 'assets under review', the Bank must form RPPU in the amount of 5%, except for assets specified in paragraph 4.3.4 of this Regulation, for which the RPPU size must be 7.5%.

The State Development Bank of the Kyrgyz Republic forms and accrues RPPU in accordance with the Law "On the State Development Bank of the Kyrgyz Republic"."

2. Make the following addition 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" dated June 30, 2010 No. 52/4:

in the Regulation "On Minimum Requirements for Credit Risk Management in Commercial Banks and Other Financial-Credit Institutions Licensed by the National Bank of the Kyrgyz Republic" approved by the aforementioned Resolution:

add paragraph 34-1 to paragraph 34 of Section 4 as follows:

"The Bank may issue a consumer loan to a borrower only if the ratio of planned monthly loan payments (principal and interest payments) to the borrower's average monthly total income is less than 50 percent.".