Resolution of the Board of the National Bank of the Kyrgyz Republic No. 43/5 of October 28, 2009 on Amendments to Certain Regulatory Legal Acts

NATIONAL BANK OF THE KYRGYZ REPUBLIC

RESOLUTION

of October 28, 2009 No. 43/5

On Amendments and Additions to Certain Regulatory Legal Acts 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" and Articles 4, 26, 30, and 33 of the Law of the Kyrgyz Republic "On Credit Unions," the Board of the National Bank of the Kyrgyz Republic

RESOLVES:

1. To make amendments and additions to the Resolution of the Board of the National Bank of the Kyrgyz Republic dated May 4, 2005 No. 14/2 "On the New Edition of the Rules for Regulating the Activities of Credit Unions in the Kyrgyz Republic," registered in the Ministry of Justice of the Kyrgyz Republic on June 6, 2005, registration number 73-05, and to the Resolution of the Board of the National Bank of the Kyrgyz Republic dated March 23, 2006 No. 7/5 "On Approval of the Regulation 'On Enforcement Measures Applied to Credit Unions,'" registered in the Ministry of Justice of the Kyrgyz Republic on April 21, 2006, registration number 45-06, according to the appendix to this Resolution.

2. This Resolution shall enter into force upon the expiration of one month after its official publication.

3. The Legal Department is instructed 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.

4. Control over the implementation of this Resolution is entrusted to the Deputy Chairman of the National Bank of the Kyrgyz Republic, K.K. Bokonbaev.

Chairman	M. Alapaev

	Appendix to the Resolution of the Board of the National Bank of the Kyrgyz Republic dated October 28, 2009 No. 43/5

AMENDMENTS AND ADDITIONS

to Certain Regulatory Legal Acts of the National Bank of the Kyrgyz Republic

1. To make the following amendments and additions to the Rules for Regulating the Activities of Credit Unions in the Kyrgyz Republic, approved by the Resolution of the Board of the National Bank of the Kyrgyz Republic dated May 4, 2005 No. 14/2 "On the New Edition of the Rules for Regulating the Activities of Credit Unions in the Kyrgyz Republic," registered in the Ministry of Justice of the Kyrgyz Republic on June 6, 2005, registration number 73-05:

• rephrase the second paragraph of Section II as follows:

"Institutional capital is the part of total capital that consists of reserves for future needs, undistributed profit/losses of previous years minus current year losses.";

• rephrase the second paragraph of point 5.1 as follows:

"When calculating the maximum size of external borrowing ratio for a credit union, the sum of external borrowing includes the credit union's borrowing provided for by the Law of the Kyrgyz Republic 'On Credit Unions.'";

• add the words ", having debts on loans to the credit union." at the end of the sentence in sub-item 5.2.1 of point 5.2;

• insert a comma after the words "for lending" in sub-item 5.4.1 of point 5.4;

• rephrase point 7.1 as follows:

"Supervision of the activities of credit unions is carried out by the UNNU, regional departments of the NBKR, and the Representation of the NBKR in the Batken Region.";

• in Appendix No. 1, remove the symbol "No." after the word "Appendix";

• rephrase the note to the table in Appendix 1 as follows:

"When filling out the table 'Information on Compliance with Economic Ratios and Restrictions,' credit unions must proceed from the requirements established by these Rules.".

2. To make the following amendments and additions to the Regulation "On Enforcement Measures Applied to Credit Unions," approved by the Resolution of the Board of the National Bank of the Kyrgyz Republic dated March 23, 2006 No. 7/5 "On Approval of the Regulation 'On Enforcement Measures Applied to Credit Unions,'" registered in the Ministry of Justice of the Kyrgyz Republic on April 21, 2006, registration number 45-06:

• throughout the text of the Regulation, replace the words "temporary administration" in various cases with the words "temporary management" in the corresponding cases;

• throughout the text of the Regulation, after the words "head of the regional department of the NBKR" in various cases, add the words "and director of the NBKR Representation in the Batken Region" in the corresponding cases;

• rephrase the third paragraph of point 3.8 as follows:

"- insolvency of the credit union.";

• supplement Chapter 3 of the Regulation with points 3.9-3.13 of the following content:

"3.9. A credit union is subject to liquidation with the revocation of its license by the NBKR in the following cases:

• if the number of physical persons - participants of the credit union, having voting rights, has become less than ten;

• if the credit union does not fulfill the conditions for compliance with the minimum size of the total amount of savings shares in accordance with legislation;

• if the credit union systematically (i.e., two or more times within 12 consecutive calendar months) violates the provisions of legislation, regulatory legal acts, directives of the NBKR and/or the charter of the credit union, as a result of which the activities of the credit union have become or may become unsafe or financially unreliable;

• if the credit union is declared insolvent in accordance with legislation.

3.10. A credit union, within three days after receiving the decision of the NBKR Supervision Committee on license revocation, submits the original license (including the additional license) to the NBKR, and within one month initiates the liquidation procedure in an out-of-court order.

3.11. Obligations for the liquidation of a credit union are imposed on its participants or on the governing body authorized to liquidate by the charter of the credit union.

3.12. In the case of insolvency, a credit union is subject to liquidation in accordance with legislation on bankruptcy. At the same time, the features of conducting the bankruptcy process for cooperatives do not apply to credit unions.

3.13. In the case of insolvency, a credit union having a license to attract deposits from its participants is subject to liquidation in accordance with regulatory legal acts on conservation, liquidation, and bankruptcy of banks.".

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