Resolution of the Board of the National Bank of the Kyrgyz Republic No. 32/5 of July 29, 2009 on Amendments and Additions to the Resolution of the Board of the National Bank of the Kyrgyz Republic No. 14/3 of May 4, 2005

LOST FORCE

in accordance with resolution of the Board of the National Bank of the Kyrgyz Republic

dated December 23, 2015 No. 78/25

NATIONAL BANK OF THE KYRGYZ REPUBLIC

RESOLUTION

dated July 29, 2009 No. 32/5

On Amendments and Additions to the Resolution of the Board of the National Bank of the Kyrgyz Republic of May 4, 2005 No. 14/3 "On the New Edition of the Regulation "On Licensing of Credit Unions", registered in the Ministry of Justice of the Kyrgyz Republic on June 10, 2005, registration number 75-05"

In accordance with Articles 7 and 43 of the Law of the Kyrgyz Republic "On the National Bank of the Kyrgyz Republic" and Article 4 of the Law of the Kyrgyz Republic "On Banks and Banking Activity in the Kyrgyz Republic", the Board of the National Bank of the Kyrgyz Republic

RESOLVES:

1. Make amendments and additions to the resolution of the Board of the National Bank of the Kyrgyz Republic of May 4, 2005 No. 14/3, "On the New Edition of the Regulation "On Licensing of Credit Unions", registered in the Ministry of Justice of the Kyrgyz Republic on June 10, 2005, registration number 75-05, according to the appendix to this resolution.

2. This resolution enters into force after official publication.

3. After the publication of the registered normative legal act, the Legal Department shall inform the Ministry of Justice of the Kyrgyz Republic about the source of publication (name of the edition, its number and date).

4. Control over the implementation of this resolution is assigned to the Deputy Chairman of the National Bank of the Kyrgyz Republic Bokontaev K.K.

Chairman	M. Alapaev

	Appendix to the Resolution of the Board of the National Bank of the Kyrgyz Republic of July 29, 2009 No. 32/5

AMENDMENTS AND ADDITIONS to the Resolution of the Board of the National Bank of the Kyrgyz Republic of May 4, 2005 No. 14/3 "On the New Edition of the Regulation on Licensing of Credit Unions", registered in the Ministry of Justice of the Kyrgyz Republic on June 10, 2005, registration number 75-05

Make the following amendments and additions to the Regulation "On Licensing of Credit Unions", approved by the resolution of the Board of the National Bank of the Kyrgyz Republic of May 4, 2005 No. 14/3, "On the New Edition of the Regulation on Licensing of Credit Unions", registered in the Ministry of Justice of the Kyrgyz Republic on June 10, 2005, registration number 75-05:

1. Supplement Section 1 with paragraph 1.2 of the following content:

"1.2. A credit union is a financial and credit organization created in the form of a cooperative for the purpose of assisting its participants (members) by merging the personal savings of the participants of the credit union and using them for mutual lending, as well as providing other financial services."

2. Supplement Section 1 with paragraph 1.3 of the following content:

"1.3. For the purposes of this Regulation, when assessing compliance with economic standards, limitations and requirements of the NBKR, the capital of a credit union includes: undistributed profit/loss of previous years, losses of the current year, reserves for future needs, the amount of savings shares contributed by participants of the credit union for a period of 1 year or more and having a special withdrawal period."

3. Redraft sub-item 2) of paragraph 1.2 of Section 1 as follows:

"2) an additional license for the provision of the following financial services (operations):

• attracting deposits (deposits) from participants of the credit union;

• carrying out leasing operations with participants of the credit union;

• carrying out settlements on behalf of participants of the credit union under a contract with a bank or other authorized financial and credit institution without opening an account in the credit union.

An additional license is issued to a credit union upon compliance with the requirements of the NBKR. A credit union may additionally carry out only those financial services (operations) that are specified in its additional license."

4. Exclude sub-item 3) of paragraph 1.2 of Section 1.

5. Redraft paragraph 1.4 of Section 1 as follows:

"1.4. A credit union may provide only those financial services that are specified in the license."

6. Consider paragraph 1.2 as paragraph 1.4 and paragraphs 1.3-1.6 as paragraphs 1.5-1.8, respectively.

7. Supplement Section 3 with paragraph 3.12 of the following content:

"A credit union may carry out the operations specified in Section 1 only if its cash rooms meet the minimum requirements of the NBKR to the cash room of a credit union (Appendix 7)."

8. Redraft the title of Section 4 as follows:

"Procedure for granting a credit union the right to carry out leasing operations with participants of the credit union (within the framework of an additional license)".

9. Throughout the text of Section 4 of the Regulation:

• replace the word "license" with the word "right" in various cases;

• replace the words "operations on financial leasing (leasing)" with the words "leasing operations" in various cases.

10. In sub-item 1) of paragraph 4.2 of Section 4, exclude the words "for obtaining a license".

11. Exclude paragraphs 4.4-4.5 of Section 4.

12. Redraft the title of Section 5 as follows:

"Procedure for granting a credit union the right to attract deposits (deposits) from participants of the credit union (within the framework of an additional license)".

13. Throughout the text of Section 5 of the Regulation, replace the words "license for the right to attract" with the words "right to attract..." in various cases.

14. In paragraph 5.1 of Section 5, exclude the words "for obtaining a license".

15. In sub-item 1) of paragraph 5.3 of Section 5, exclude the words "for obtaining a license".

16. Exclude paragraphs 5.6-5.7 of Section 5.

17. Consider paragraphs 5.8-5.9 as paragraphs 5.6-5.7, respectively.

18. In paragraph 5 of Section 6, exclude the words "for accepting deposits (deposits) from participants".

19. Supplement the Regulation with Section 6 of the following content:

"6. Procedure for granting a credit union the right to carry out settlements

on behalf of participants of the credit union

(within the framework of an additional license)

6.1. The right to carry out settlements on behalf of participants of the credit union under a contract with a bank or other authorized financial and credit institution without opening an account in the credit union is granted to a credit union upon compliance by the credit union at the time of submitting the application with the following minimum requirements of the NBKR:

1) capital in the amount of not less than 500 thousand som;

2) presence of internal regulatory documents (policy, procedures) for carrying out settlements on behalf of participants of the credit union under a contract with a bank or other authorized financial and credit institution without opening an account in the credit union.

6.2. To obtain the right to carry out settlements on behalf of participants, a credit union must submit to the authorized structural subdivision of the NBKR the following documents, in two copies:

1) application of the credit union (Appendix 1);

2) extract from the protocol of the general meeting of participants of the credit union on the expansion of the range of operations carried out by the credit union;

3) economic justification with a forecast calculation of the volume and number of operations of the credit union for settlements on behalf of participants of the credit union;

4) financial reporting of the credit union for the last reporting year and for the last reporting date of the current year;

5) regulatory documents (policy, procedures) of the credit union for carrying out settlements on behalf of participants of the credit union with an attached copy of the decisions of the management bodies of the credit union on the approval of these documents.

6.3. In the event of amendments to the constituent documents related to the expansion of the range of operations of the credit union, in addition to the documents listed in p.6.2. of this Regulation, the following documents are submitted in two copies:

1) extract from the protocol of the general meeting of participants of the credit union on the expansion of the range of operations carried out;

2) notarized copy of the charter of the credit union;

3) copy of the certificate of state re-registration of the credit union (in case of passing re-registration)."

20. Supplement the Regulation with Section 7 of the following content:

"7. Procedure for issuing an additional

license to a credit union

7.1. An additional license of a credit union is issued in two copies in accordance with the attached form (Appendix 5) after checking the completeness and compliance of the documents submitted by the credit union. One copy of the license, issued on a strict accountability form, is issued to the credit union, the second copy of the license is issued on A4 paper and remains with the NBKR.

7.2. An additional license of a credit union is signed by an official authorized by the order of the Chairman of the NBKR.

7.3. An additional license of a credit union is issued within 30 days from the date of receipt of the corresponding documents in the NBKR.

The term for issuing a license may be extended by 10 days by the Deputy Chairman/Member of the Board of the NBKR, supervising supervision and licensing issues, for additional study, consideration and assessment of compliance of the credit union with the minimum requirements of the NBKR for obtaining a license.

7.4. In the event of providing documents in incomplete volume or in case of non-compliance of documents with established requirements, the NBKR returns the documents for revision with a written explanation of the reasons within the time limits allocated for consideration of documents. The counting of the term for consideration of the application and documents starts again from the day of receipt of all documents meeting the requirements.

7.5. Upon condition of fulfillment by the credit union of the requirements of the NBKR, in connection with the expansion of the range of operations carried out, the additional license is replaced. Upon replacement, the previous license must be submitted to the NBKR."

21. Supplement the Regulation with Section 8 of the following content:

"8. Amendments and additions to the Charter

and state re-registration

of a credit union

8.1. Amendments and/or additions made to the Charter of a credit union are subject to coordination with the NBKR in the following cases:

• change in the procedure for contribution or withdrawal of savings shares and deposits;

• establishment of a supervisory board;

• change of the corporate name;

• change of the legal address of the credit union (in cases provided for by legislation). At the same time, the actual location of the credit union must correspond to its legal address;

• establishment of a branch of the credit union and/or change of information about branches of the credit union;

• change of competence, quantitative composition of management bodies and procedure for their decision-making;

• in other cases provided for by legislation.

8.2. For coordination with the NBKR of amendments and/or additions to the Charter, a credit union provides to the authorized structural subdivision of the NBKR the following documents in two copies:

• application for amendments and/or additions to the Charter;

• decision of the general meeting of participants of the credit union on amendments and/or additions to the Charter, certified by the seal of the credit union;

• copy of the new edition of the Charter with amendments and/or additions, or text of amendments and/or additions in the form of an appendix to the Charter, notarized.

8.3. Documents necessary for coordination are provided by the credit union to the authorized structural subdivision of the NBKR within 20 days from the day of adoption by the general meeting of participants of the decision on amendments and/or additions to the Charter of the credit union.

8.4. The authorized structural subdivision of the NBKR considers documents for the issuance of a letter of consent for amendments and/or additions to the Charter within 30 calendar days from the day of submission by the credit union of properly formatted documents, in compliance with all established legislative requirements.

8.5. The authorized structural subdivision of the NBKR considers the submitted documents for compliance with current legislation and NBKR requirements, and in cases established by legislation, conducts their antimonopoly expertise in accordance with normative legal acts of the NBKR.

8.6. A credit union is obliged to obtain prior consent of the NBKR before the procedure of state re-registration in cases provided for by legislation.

8.7. A credit union is obliged within 10 days after passing the procedure of state re-registration in the justice authorities to submit to the authorized structural subdivision of the NBKR a letter-notification of re-registration with an attached one copy:

1) copy of the Charter of the credit union, notarized;

2) copy of the certificate of state re-registration.

8.8. In the event of changes in information in the license, a credit union is obliged to reissue the license. Within 10 calendar days from the day of adoption of the corresponding decision by the authorized body of the credit union, the credit union sends an application to the authorized structural subdivision of the NBKR for reissuance of the license with the following documents attached:

• copy of the Charter of the credit union, notarized;

• copy of the certificate of state re-registration of the credit union;

• decision of the authorized body of the credit union on the need for corresponding changes in the license;

• copy of the lease agreement, certified in the established order, or a document establishing the right of ownership of the credit union to the occupied premises (in case of change of location);

• confirmation of notification of the justice authorities (in case of change of location);

• original license of the credit union;

• document confirming the payment of the fee for reissuance of the license, in the amount established by the legislation of the Kyrgyz Republic.

8.9. The authorized structural subdivision of the NBKR within 10 working days from the date of receipt of all necessary documents carries out the reissuance of the license."

22. In sub-item 2) of paragraph 2.2., in the first paragraph of paragraph 2.6., in sub-item 1) of paragraph 2.6., in paragraph 2.7. of Section 2, in sub-item 3) of paragraph 3.1. of Section 3, in sub-item 1) of paragraph 5.8. of Section 5, after the word "Board", add the words ", Supervisory Board".

23. In sub-items 6) and 7) of paragraph 2.2., in sub-items 2) and 3) of paragraph 2.6. of Section 2, in paragraphs 3.4. and 3.7. of Section 3, in paragraph 5.8. of Section 5, in sub-item 7) of paragraph 6.1. of Section 6, after the words "Chairman of the Board", add the words ", Chairman of the Supervisory Board".

24. Throughout the text of Appendix 3 of the Regulation, after the words "Chairman of the Board", add the words ", Chairman of the Supervisory Board" in the appropriate cases.

25. Throughout the text of the Regulation, except for sub-item 3) of paragraph 2.2. and paragraph 3.9., exclude the words "original and".

26. Consider Sections 6 and 7 as Sections 9 and 10, respectively.

27. Supplement the Regulation with Section 11 of the following content:

"11. Procedure for opening a branch

by a credit union

on the territory of the Kyrgyz Republic

11.1. A credit union has the right to open branches on the territory of the Kyrgyz Republic, the activities of which are carried out in accordance with the legislation of the Kyrgyz Republic. The decision to open a branch of a credit union is made by the general meeting of participants of the credit union.

11.2. A branch of a credit union is its separate subdivision, which is not a legal entity, located outside the location of the credit union, carrying out all or part of the operations based on the Regulation on the branch, operating within the powers granted to it by the credit union. Information about the branch of the credit union (including its location) must be contained in the charter of the credit union.

11.3. A branch has a single capital, balance sheet with the credit union, as well as a name that completely coincides with the name of the credit union, with the addition of the word "branch".

11.4. The head of the branch is appointed by the authorized body of the credit union and acts on the basis of a power of attorney issued in the established order. The power of attorney must specify the list of operations and other actions for which the head of the branch is authorized to act on behalf of the credit union.

11.5. A credit union opens its branches on the territory of the Kyrgyz Republic after 30 days from the moment of notification to the NBKR, upon fulfillment of the following requirements:

1) the credit union is not under special supervision of the National Bank as a result of deterioration of the state of the credit union;

2) restrictions on the growth of the credit union, by prohibiting the opening of a branch, are not imposed by the National Bank;

3) the credit union meets the requirements of the National Bank on capital;

4) recommendations and requirements of the National Bank following the inspection check and current supervision of the activities of the credit union are fulfilled;

5) the premises for the placement of the branch meet the minimum requirements of the National Bank of the Kyrgyz Republic (Appendix 7).

11.6. For the opening of a branch by a credit union, the following documents are provided to the authorized structural subdivision of the NBKR:

1) notification of the opening of a branch (Appendix 6);

2) decision of the general meeting of participants of the credit union on the opening of a branch;

3) notarized copy of the Regulation on the branch, which must specify:

• name of the branch, completely coinciding with the name of the credit union-applicant;

• name and location of the credit union creating the branch;

• legal address of the branch;

• purposes of creating the branch;

• list of operations delegated to the branch;

• scale and nature of planned operations;

• term of activity of the branch;

• powers and functions of the head of the branch, his rights and duties, which must provide for effective control by the head credit union;

• conditions for termination of the branch activity;

• other information provided for by legislation;

4) questionnaires for the head and chief accountant of the branch in accordance with Appendix 2;

5) certified copy of the power of attorney issued to the head of the branch, indicating operations and transactions for which he is authorized;

6) assessment of future activities of the branch, in terms of impact on the activities of the credit union and forecast calculation of profitability of the credit union;

7) copy of the lease agreement for the premises or a document confirming the right of ownership to the occupied premises.

11.7. Within 10 working days from the moment of receipt of the notification of the opening of a branch, the authorized structural subdivision of the NBKR presents a written conclusion on the possibility of opening a branch upon compliance with the conditions specified in paragraph 11.5. of this Regulation to the person authorized by the order of the Chairman of the NBKR.

11.8. In the event of non-fulfillment of the requirements specified in paragraphs 11.5. and 11.6. of this Regulation, the authorized structural subdivision of the NBKR sends a letter to the credit union and justice authorities (if necessary) about the non-fulfillment by the credit union of the requirements established by the NBKR for opening a branch.

11.9. In the event of non-notification by the credit union of the opening/closing of a branch or notification with a violation of the term established by this Regulation, the NBKR has the right to apply measures and sanctions against it provided for by normative acts of the NBKR.

11.10. A credit union within 5 working days from the moment of state registration of the branch in the justice authorities submits to the authorized structural subdivision of the NBKR the following documents in one copy:

1) copy of the regulation on the branch with a mark on the implementation of registration, notarized;

2) copy of the certificate of state registration of the branch, certified by the seal of the credit union.

11.11. Within 3 working days from the day of providing the documents specified in paragraph 11.10. of this Regulation and the corresponding letter-notification of the credit union, the authorized structural subdivision of the NBKR:

1) enters a record in the register of branches of credit unions;

2) sends a letter to the credit union about the entry of a record in the register of branches of credit unions;

3) sends a letter to the regional institutions of the NBKR about the opening of a branch of the credit union with the indication of the surname of the head and chief accountant of the branch.

11.12. The decision to close a branch of a credit union is made by the general meeting of participants of the credit union. Within 5 working days from the day of adoption of the decision to close the branch, the credit union is obliged to submit to the authorized structural subdivision of the NBKR:

1) notification of the closing of the branch (Appendix 6);

2) decision of the general meeting of participants of the credit union on the closing of the branch;

3) copy of the order of the Ministry of Justice of the Kyrgyz Republic (its territorial bodies) on the entry into the register of branches of information on the termination of the activities of the branch.

11.13. The authorized structural subdivision of the NBKR, based on the documents specified in p.11.12. of this Regulation, enters a record in the register of branches of credit unions about the closing of the branch."

28. Supplement paragraph 4 of Appendix 3 with sub-item g) of the following content:

"the candidate does not meet the requirements of paragraphs 1 and 2 of Article 18.1. of the Law "On Credit Unions"."

29. Redraft Appendix 5 as follows:

"Appendix 5

to the Regulation on Licensing

of Credit Unions

NATIONAL BANK OF THE KYRGYZ REPUBLIC

LICENSE No. ______

dated "_" ______ 20 year

Issued to the credit union ______

(full name of the credit union)

legal address of the credit union ______ ______

(name of the city, district, settlement, street, house)

This license permits the provision of the following additional services (operations):

• attracting deposits (deposits) from participants of the credit union;

• carrying out leasing operations with participants of the credit union;

• carrying out settlements on behalf of participants of the credit union under a contract with a bank or other authorized financial and credit institution without opening an account in the credit union.

The license of the credit union is non-transferable (named). Rights arising from this license are not subject to transfer to third parties. Such transfer leads to the withdrawal of the license with a ban on the activities of the credit union.

The term of validity of the license is unlimited.

Copies of the license are invalid.

Seal

Person authorized by the order of the Chairman of the NBKR".

30. Redraft Appendix 6 as follows:

"Appendix 6

to the Regulation on Licensing

of Credit Unions

NATIONAL BANK OF THE KYRGYZ REPUBLIC

NOTIFICATION

(on the letterhead of the institution)

Hereby ______ notifies about

(name of the credit union)

the intention to open (close) a branch in ______ ______

(name of the settlement, location)

according to ______

(name of the management body of the credit union,

---

adopted in accordance with the charter a decision on the opening of the branch)

This branch is endowed with powers for the right to conduct the following operations and transactions(*):

-

-

(all operations and transactions, the right to commit which is delegated to the branch in accordance with the regulation on the branch within the framework of the license issued to the credit union by the NBKR, are indicated)."

Appointed head and chief accountant: ______ ______

(Full Name)

Appendix: questionnaires for the head and chief accountant of the branch, power of attorney, total ______ pages.

The credit union has no obligations:

• to clients and creditors serviced in this branch;
• to the budget.

Assets and liabilities have been transferred to the balance sheet of the credit union.

The credit union is fully responsible for the accuracy of the information provided.

Head of the executive body of the credit union (signature) Full Name

(*) These data are provided when opening a branch.
() These data are provided when closing a branch.

31. The Regulation is supplemented with Appendix 7 of the following content:

"Appendix 7 to the Regulation on Licensing of Credit Unions

MINIMUM REQUIREMENTS

of the National Bank of the Kyrgyz Republic to the cash office of a credit union (branches)

1. The cash office of a credit union must be isolated from staff and clients (participants), and the service of clients (participants) of the credit union must be carried out only through the cash window of the credit union.

2. The doors of the cash office must be locked from the inside during cash operations.

3. The cash office of a credit union must have a fireproof metal cabinet (safe) for storing money and documents of the credit union.

4. The cashiers' own money, outer clothing, and other items must be stored in a specially designated room or cabinets located outside the cash office.

5. At the end of the working day, the doors to the cash office of the credit union must be locked with a key and sealed with the seal of the credit union. Access to this room for persons not related to the work of the cash office is prohibited."