Resolution of the Board of the National Bank of the Kyrgyz Republic No. 40/6 of September 28, 2016 on Amendments and Additions to Certain Resolutions of the Board of the National Bank of the Kyrgyz Republic — NBKR — KG

NATIONAL BANK OF THE KYRGYZ REPUBLIC

RESOLUTION

RESOLUTION OF THE BOARD OF THE NATIONAL BANK OF THE KYRGYZ REPUBLIC

of September 28, 2016 No. 40/6

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

(In the edition of the Resolution of the Board of the NB KR of August 17, 2022 No. 2022-P-33/52-2)

In accordance with Articles 7 and 43 of the Law "On the National Bank of the Kyrgyz Republic", the Board of the National Bank of the Kyrgyz Republic resolves:

Make amendments and additions 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 June 30, 2010 No. 52/4;
"On Approval of the Regulation on Minimum Requirements for Credit Risk Management in Microfinance Organizations Not Attracting Deposits" of September 25, 2013 No. 35/14;
"On Approval of the Regulation "On Minimum Requirements for Credit Risk Management in Credit Unions" of December 23, 2009 No. 50/7;
(paragraph lost force in accordance with the resolution of the Board of the NB KR of August 17, 2022 No. 2022-P-33/52-2)
"On Approval of the Regulation on Minimum Requirements for Credit Risk Management in Operations in Accordance with Islamic Principles of Banking and Finance" of September 25, 2013 No. 35/13.

(In the edition of the Resolution of the Board of the NB KR of August 17, 2022 No. 2022-P-33/52-2)

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

The Supervision and Licensing Methodology Department to bring this resolution to the attention of commercial banks, the specialized financial-credit institution JSC "Financial Company of Credit Unions", credit unions, microfinance organizations, and credit bureaus.
Control over the execution of this resolution is entrusted to the Member of the Board of the National Bank of the Kyrgyz Republic T. Jusupov.


Chairman of the Board of the National Bank of the Kyrgyz Republic	T. Abdygulov


		Appendix to the Resolution of the Board of the National Bank of the Kyrgyz Republic of September 28, 2016 No. 40/6

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

(In the edition of the Resolution of the Board of the NB KR of August 17, 2022 No. 2022-P-33/52-2)

Make the following amendments and additions 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 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:

rephrase the first sentence of paragraph 1 as follows:

"1. This Regulation is developed in accordance with the laws of the Kyrgyz Republic "On the National Bank of the Kyrgyz Republic", "On Banks and Banking Activity in the Kyrgyz Republic", "On Microfinance Organizations" and "On the Exchange of Credit Information".";

rephrase the third paragraph of paragraph 30 as follows:

"- borrower character. The Bank must establish that the borrower treats borrowed funds responsibly, gives complete answers to the Bank's questions, and will make every effort to repay the debt. In the analysis, it is also necessary to take into account whether the borrower has used loans in this Bank or other financial-credit institutions in the past, how the repayment was carried out, their discipline, willingness to fulfill their obligations. It is also necessary to take into account their reputation, both professionally and in general human terms, it is also important to consider the borrower's tenure and work experience in this industry, their successes and achievements. It makes sense to request information about the loans provided to them in other credit institutions. In addition, with the consent of the borrower, request information (credit report) about them in one or several credit bureaus.

The Bank must observe confidentiality and preserve the credit report received from the credit bureau and not disclose the credit information contained therein to third parties and use the credit report only for the purposes established by the legislation on the exchange of credit information.

The Bank is responsible for distortion of information contained in the credit report received from the credit bureau.";

supplement the Regulation with paragraph 30-1 of the following content:

"30-1. The Bank, for the purpose of organizing work on risk assessment when concluding, changing, and monitoring the execution of credit transactions, is obliged to conclude an agreement on the exchange of credit information with one or several credit bureaus, as well as provide at least one credit bureau with credit information, in accordance with established requirements.

Credit information must be reliable and updated, based on factual data, transmitted in a timely manner, and in accordance with the conditions of the contract concluded between the Bank and the client.

The Bank's internal documents on credit activity management must contain the procedure and requirements for organizing work on the exchange of credit information, as well as the main conditions, rights, and obligations of the Bank when concluding an agreement on the exchange of credit information with a credit bureau, including:

on ensuring the storage and protection of credit information from unauthorized access, destruction, alteration, use, or disclosure;
on the prohibition of disclosure of information by the Bank and its employees who have gained access to information in the process of exchanging credit information, as well as after the termination of their employment contract (contract);
on timely reporting to the credit bureau of changes and updates to credit information for which the Bank is responsible;
on making changes to the credit information transmitted to the credit bureau in case of distortion of the presented information, including at the request of the subject of credit information;
on ensuring uninterrupted operation of the data transmission system to the credit bureau in accordance with the agreement on the exchange of credit information.

The Bank is responsible for distortion of credit information transmitted to the credit bureau, for the completeness of the transmitted information, for the timeliness of transmission, including with respect to all borrowers, in accordance with the legislation of the Kyrgyz Republic and regulatory legal acts of the National Bank.".

Make the following amendments and additions 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 Microfinance Organizations Not Attracting Deposits" of September 25, 2013 No. 35/14:

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

supplement the first sentence of paragraph 1 after the words "On Microfinance Organizations in the Kyrgyz Republic" with the words "On the Exchange of Credit Information";
supplement paragraph 13 with sub-paragraph five of the following content:

"5) The MFO, for the purpose of organizing work on risk assessment when concluding, changing, and monitoring the execution of credit transactions, is obliged to conclude an agreement on the exchange of credit information with one or several credit bureaus, as well as provide at least one credit bureau with the credit information available in the MFO.

Credit information must be reliable and updated, based on factual data and in accordance with the conditions of the contract concluded between the MFO and the client.

The MFO's credit policy/internal documents on credit activity management must contain the procedure and requirements for organizing work on the exchange of credit information:

on ensuring the storage and protection of credit information from unauthorized access, destruction, alteration, use, or disclosure;
on the prohibition of disclosure of information by the MFO and its employees who have gained access to information in the process of exchanging credit information, as well as after the termination of their employment contract (contract).

In addition, the credit policy reflects the main conditions and obligations of the MFO when concluding an agreement on the exchange of credit information with a credit bureau, including:

to timely report to the credit bureau about changes and updates to credit information;
at the request of the subject of credit information, make changes to the credit information transmitted to the credit bureau;
to ensure uninterrupted operation of the data transmission system to the credit bureau in accordance with the agreement on the exchange of credit information.

The MFO is responsible for distortion of credit information transmitted to the credit bureau, as well as for the completeness of the transmitted information, including with respect to all borrowers in accordance with the legislation of the Kyrgyz Republic and regulatory legal acts of the National Bank.";

supplement paragraph 20 with sub-paragraph 2-1 of the following content:

"2-1) with the consent of the borrower, request information about them (credit report) in one or several credit bureaus;

The MFO must observe confidentiality and preserve the credit report received from the credit bureau, not disclose the credit information contained therein to third parties, and use the credit report only for the purposes established by legislation.

The MFO is responsible for distortion of information contained in the credit report.";

in sub-paragraph 7 of paragraph 34, exclude the words "(if this MFO is its participant)".

Make the following amendments and additions 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 Credit Unions" of December 23, 2009 No. 50/7:

in the Regulation on Minimum Requirements for Credit Risk Management in Credit Unions, approved by the aforementioned resolution:

supplement the first sentence of paragraph 1.1 after the words "On Credit Unions in the Kyrgyz Republic" with the words "On the Exchange of Credit Information,";
supplement paragraph 3.2.2 with paragraphs of the following content:

"The Credit Union, for the purpose of organizing work on risk assessment when concluding, changing, and monitoring the execution of credit transactions, is obliged to conclude an agreement on the exchange of credit information with one or several credit bureaus, as well as provide at least one credit bureau with the credit information available in the credit union.

Credit information must be reliable and updated, based on factual data.

The internal documents of the credit union on credit activity management must contain the procedure and requirements for organizing work on the exchange of credit information:

on ensuring the storage and protection of credit information from unauthorized access, destruction, alteration, use, or disclosure;
on the prohibition of disclosure of information by the credit union and its employees who have gained access to information in the process of exchanging credit information, as well as after the termination of their employment contract (contract).

In addition, the main conditions and obligations are reflected in the internal documents on credit activity management when concluding an agreement on the exchange of credit information with a credit bureau, including:

to timely report to the credit bureau about changes and updates to credit information;
at the request of the subject of credit information, make changes to the credit information transmitted to the credit bureau;
to ensure uninterrupted operation of the data transmission system to the credit bureau in accordance with the agreement on the exchange of credit information.

The Credit Union is responsible for distortion of credit information transmitted to the credit bureau, as well as for the completeness of the transmitted information, including with respect to all borrowers in accordance with the legislation of the Kyrgyz Republic and regulatory legal acts of the National Bank.";

rephrase the third paragraph of paragraph 5.1.3 as follows:

"- borrower character. The credit employee must establish that the borrower treats borrowed funds responsibly and will make every effort to repay the debt. In the analysis, it is also necessary to take into account whether the borrower has used loans in other financial-credit institutions in the past, how the repayment was carried out, their discipline, willingness to fulfill their obligations. It is also necessary to take into account their reputation, both professionally and in general human terms. It is also important to consider the borrower's tenure and work experience in this industry, their successes and achievements. It makes sense to request information about the loans provided to them in other credit institutions. Also, with the consent of the borrower, request information about them (credit report) in one or several credit bureaus.

The Credit Union must observe confidentiality and preserve the credit report received from the credit bureau and not disclose the credit information contained therein to third parties and use the credit report only for the purposes established by legislation.

The Credit Union is responsible for distortion of information contained in the credit report.".

(Lost force in accordance with the resolution of the Board of the NB KR of August 17, 2022 No. 2022-P-33/52-2)
Make the following amendments and additions 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 Operations in Accordance with Islamic Principles of Banking and Finance" of September 25, 2013 No. 35/13:

in the Regulation on Minimum Requirements for Credit Risk Management in Operations in Accordance with Islamic Principles of Banking and Finance, approved by the aforementioned resolution:

rephrase paragraph 1 as follows:

"1. This Regulation is developed in accordance with the Laws of the Kyrgyz Republic "On the National Bank of the Kyrgyz Republic", "On Banks and Banking Activity in the Kyrgyz Republic", "On Microfinance Organizations" and "On the Exchange of Credit Information" and applies to commercial banks and microfinance companies attracting term deposits and carrying out operations in accordance with Islamic principles of banking and finance (hereinafter - Banks).";

rephrase the third paragraph of paragraph 34 as follows:

"- character of the client/partner. The Bank must establish that the client/partner treats receiving financing responsibly, gives complete answers to the Bank's questions, and will make every effort to repay the debt. In the analysis, it is also necessary to take into account whether the client/partner has used loans (borrowings) or assets carrying credit risk in this Bank or other financial-credit institutions in the past, how the repayment was carried out, their discipline, willingness to fulfill their obligations. It is also necessary to take into account their reputation as a professional and in general human terms, and consider the borrower's tenure, work experience in this industry, their successes and achievements. It makes sense to request information about the assets carrying credit risk provided to them in other credit institutions. In addition, with the consent of the client/partner, request information (credit report) about them in one or several credit bureaus.

The Bank must observe confidentiality and preserve the credit report received from the credit bureau, not disclose the credit information contained therein to third parties, and use the credit report only for the purposes established by the legislation on the exchange of credit information.

The Bank is responsible for distortion of information contained in the credit report received from the credit bureau.";

supplement the Regulation with paragraph 34-1 of the following content:

"34-1. The Bank, for the purpose of organizing work on risk assessment when concluding, changing, and monitoring the execution of financing transactions, is obliged to conclude an agreement on the exchange of credit information with one or several credit bureaus, as well as provide at least one credit bureau with the credit information available in the Bank.

Credit information must be reliable and up-to-date, based on factual data, and in accordance with the conditions of the contract concluded between the Bank and the client.

The Bank's internal documents on credit activity management must contain the procedure and requirements for organizing work on the exchange of credit information, as well as the main conditions, rights, and obligations when concluding an agreement on the exchange of credit information with a credit bureau, including:

on ensuring the storage and protection of credit information from unauthorized access, destruction, alteration, use, or disclosure;
on the prohibition of disclosure of information by the Bank and its employees who have gained access to information in the process of exchanging credit information, as well as after the termination of their employment contract (contract);
on timely reporting to the credit bureau of changes and updates to credit information for which the Bank is responsible;
on making changes to the credit information transmitted to the credit bureau in case of distortion of the presented information, including at the request of the subject of credit information;
on ensuring uninterrupted operation of the data transmission system to the credit bureau in accordance with the agreement on the exchange of credit information.

The Bank is responsible for distortion of credit information transmitted to the credit bureau, as well as for the completeness of the transmitted information, for the timeliness of transmission, including with respect to all clients/partners, in accordance with the legislation of the Kyrgyz Republic and regulatory legal acts of the National Bank.".


Chairman of the Board of the National Bank of the Kyrgyz Republic	T. Abdygulov