Resolution of the Board of the National Bank of the Kyrgyz Republic No. 43/4 of September 25, 2007 on Amendments and Additions to Resolution No. 34/10 of December 10, 2003 on Requirements for Operations with Insiders and Affiliated Persons of Commercial Banks and Other Financial and Credit Institutions Licensed by the NBKR

Registered in the Ministry of Justice of the Kyrgyz Republic

November 2, 2007. Registration number 105-07

Bishkek

of September 25, 2007 No. 43/4

RESOLUTION OF THE BOARD OF THE NATIONAL BANK

OF THE KYRGYZ REPUBLIC

On Amendments and Additions to the Resolution

of the Board of the National Bank of the Kyrgyz Republic

"On Requirements for Operations with Insiders and

Affiliated Persons of Commercial Banks and Other

Financial and Credit Institutions Licensed by the NBKR"

No. 34/10 of December 10, 2003"

Having considered the proposed draft amendments and additions to the Resolution of the Board of the National Bank of the Kyrgyz Republic "On Requirements for Operations with Insiders and Affiliated Persons of Commercial Banks and Other Financial and Credit Institutions Licensed by the NBKR" No. 34/10 of December 10, 2003, registered in the Ministry of Justice of the Kyrgyz Republic on January 5, 2004, registration number 2-04, guided by the Laws of the Kyrgyz Republic "On the National Bank of the Kyrgyz Republic" (Article 7) and "On Banks and Banking Activities in the Kyrgyz Republic", the Board of the National Bank of the Kyrgyz Republic resolves:

1. To approve the amendments and additions to the Resolution of the Board of the National Bank of the Kyrgyz Republic "On Requirements for Operations with Insiders and Affiliated Persons of Commercial Banks and Other Financial and Credit Institutions Licensed by the NBKR" No. 34/10 of December 10, 2003, registered in the Ministry of Justice of the Kyrgyz Republic on January 5, 2004, registration number 2-04 (attached).

2. The Supervision and Licensing Methodology Department, together with the Legal Department, shall in the established procedure carry out state registration of this resolution with the Ministry of Justice of the Kyrgyz Republic.

3. This resolution shall enter into force from the moment of official publication after state registration with the Ministry of Justice of the Kyrgyz Republic.

Published in the journal "Normative Acts of the National Bank of the Kyrgyz Republic", No. 12/2007

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

5. Control over the execution of this resolution shall be assigned to the Deputy Chairman of the NBKR Bokontaev K.K.

Chairman of the Board of the National

Bank of the Kyrgyz Republic M. Alapaev

Approved

by resolution of the Board

of the National Bank

of the Kyrgyz Republic

of September 25, 2007 No. 43/4

AMENDMENTS AND ADDITIONS

to the Resolution of the Board of the National Bank

of the Kyrgyz Republic of December 10, 2003 No. 34/10

"On Requirements for Operations with Insiders and

Affiliated Persons of Commercial Banks and Other

Financial and Credit Institutions Licensed by the NBKR",

registered in the Ministry of Justice

of the Kyrgyz Republic on January 5, 2004,

registration number 2-04

1. To introduce into the Resolution of the Board of the National Bank of the Kyrgyz Republic of December 10, 2003 No. 34/10 "On Requirements for Operations with Insiders and Affiliated Persons of Commercial Banks and Other Financial and Credit Institutions Licensed by the NBKR", registered in the Ministry of Justice of the Kyrgyz Republic on January 5, 2004, registration number 2-04, the following amendment:

1.1. Clause 1 of the above-mentioned resolution shall be set forth in the following wording:

"1. To approve the Instruction "On Requirements for Operations of Banks with Insiders and Affiliated Persons (attached)".

2. To introduce into the Instruction on requirements for operations with insiders and affiliated persons of commercial banks and other financial and credit institutions licensed by the National Bank of the Kyrgyz Republic (hereinafter - the Instruction), approved by the above-mentioned resolution, the following amendments and additions:

2.1. The title of the Instruction shall be set forth in the following wording:

"Instruction "On Requirements for Operations of Banks with Insiders and Affiliated Persons".

2.2. The preamble shall be set forth in the following wording:

"This Instruction "On Requirements for Operations of Banks with Insiders and Affiliated Persons" (hereinafter referred to as the Instruction) has been developed in accordance with the laws of the Kyrgyz Republic "On Banks and Banking Activities in the Kyrgyz Republic", "On the National Bank of the Kyrgyz Republic", for the purpose of establishing requirements for the activities of banks, OJSC "Settlement-Savings Company", the Financial Company for Support and Development of Credit Unions (hereinafter referred to as banks), licensed by the National Bank of the Kyrgyz Republic (hereinafter referred to as the NBKR), when carrying out operations with insiders and affiliated persons.".

2.3. In Section 1, the definition "Insiders (internal persons)" shall be set forth in the following wording:

"Insiders (internal persons) of a bank - members of the Board, members of the Board of Directors, other officials, significant participants and any other individuals connected with the specified persons by common interests".

2.4. Section 1, after the definition "Insiders (internal persons) of a bank", shall be supplemented with a paragraph of the following content:

"In cases where the internal auditor, risk manager and the person appointed for the purpose of organizing internal control on countering the financing of terrorism and the legalization (laundering) of proceeds obtained by criminal means do not fall under the definition of "officials of the bank" in accordance with this Instruction, the requirements of this Instruction shall not apply to them.".

2.5. In Section 1, the definition "Official of the bank" shall be set forth in the following wording:

"Officials of the bank - the chairman and other members of the Board of Directors of the bank, the chairman of the Board, members of the Board of the bank, chief officers of the bank for finance, for credit. "Officials of the bank" also means persons who determine the policy of the bank or have the authority to participate or actually participate in the main operations of the bank that shape the bank's policy, regardless of whether these persons work on a gratuitous basis or receive remuneration".

2.6. In Section 1, the concept "Control" shall be set forth in the following wording:

"Control - solely, or jointly with other persons:

• direct or indirect ownership or management of fifty or more percent of the voting shares of a joint-stock company or of the charter capital of a legal entity that is not a joint-stock company, or;

• the ability to elect at least half of the members of the Board of Directors (supervisory body) of a legal entity, or;

• regardless of participation in the capital of a legal entity, the ability to exercise a determining influence on the management or policy of the given legal entity on the basis of an agreement or otherwise".

2.7. In Section 1, the concept "Full control" shall be excluded.

2.8. In Section 1, the definition "Affiliated persons" shall be set forth in the following wording:

"Affiliated persons are:

• significant participants of a legal entity, including banks;

• legal entities in which other legal entities, including banks, are significant participants;

• legal entities, including banks, in which other legal entities are significant participants".

2.9. Section 1 shall be supplemented with the definitions "significant participation", "significant participant", "controlling person", "arm's length principle" in the following wording:

"Significant participation - solely or jointly with other persons:

• direct or indirect ownership or management of ten or more percent of the voting shares (of any type) of a joint-stock company, ten or more percent of the charter capital of a legal entity that is not a joint-stock company;

• or, regardless of participation in the charter capital of a legal entity, the ability to exercise a significant influence on the management and/or policy of the given legal entity on the basis of an agreement or otherwise.

Significant participant - a person exercising significant participation in a legal entity in accordance with the Law "On Banks and Banking Activities in the Kyrgyz Republic".

Controlling person - a person exercising control over a legal entity.

The arm's length principle means that the bank does not have the right to grant credits to insiders and affiliated persons, as well as significant participants, if the terms of granting such credits are more favorable than for credits granted under similar conditions to borrowers who do not have common interests with the bank, and to significant participants of the bank.".

2.10. Clause 2.1 of Section 2 shall be set forth in the following wording:

"2.1. The bank does not have the right to lend to its insiders or affiliated persons if the requirements of the arm's length principle are violated and any of the following requirements exists:

A) The size of the maximum risk per borrower connected with the bank (ratio K1.2) exceeds 15% of the net aggregate capital (NAC) of the bank;

B) The bank does not comply with the capital adequacy and own funds requirements established by the NBKR;

C) In the presence of current losses as of the latest reporting date".

2.11. In the eighth paragraph of subparagraph A of clause 2.7 of Section 2, the word "adopted" (принятой) shall be replaced by the word "adopted" (принята).

2.12. In subparagraph B of clause 2.7 of Section 2, the words "credit, leasing" shall be excluded.

2.13. In subparagraph V of clause 2.7 of Section 2, the last sentence shall be excluded.

2.14. The first paragraph of subparagraph G of clause 2.7 of Section 2 shall be set forth in the following wording:

"The bank must keep a written protocol of approval of such an operation, which must include a written analysis of all merits of the operation, including justification that the operation is carried out not to the detriment of the bank and in its interests. The analysis must include:".

2.15. In clause 2.10 of Section 2, the words "of 01.09.1995 No. 21/6" shall be replaced by the words "of September 15, 2004 No. 24/4 (registration number of the Ministry of Justice of the Kyrgyz Republic No. 109-04 of October 7, 2004)".

2.16. Clause 2.13 of Section 2 shall be excluded.

2.17. Clauses 2.14., 2.15. and 2.16. of Section 2 shall be considered respectively as clauses 2.13., 2.14. and 2.15.

2.18. In clause 2.14 of Section 2, the figure "2.8" shall be replaced by the figure "2.7".

2.19. In the first paragraph of clause 2.15 of Section 2, the word "or" shall be excluded.

2.20. Clause 4.1 of Section 4 shall be set forth in the following wording:

"Operations carried out by the bank with insiders and affiliated persons must not be carried out to the detriment of the bank, the interests of depositors or other creditors of the bank".

2.21. Clause 4.2 of Section 4 shall be excluded, clauses 4.3., 4.4. and 4.5. shall be considered respectively as clauses 4.2., 4.3., 4.4.