Resolution of the Board of the National Bank of the Kyrgyz Republic No. 52/8 of December 23, 2013 on Amendments and Additions to Certain Regulatory Legal Acts of the National Bank of the Kyrgyz Republic

NATIONAL BANK OF THE KYRGYZ REPUBLIC

RESOLUTION

of December 23, 2013 No. 52/8

On Amendments and Additions to Certain Regulatory Legal Acts of the National Bank of the Kyrgyz Republic

(In the edition of the Resolution of the Board of the National Bank of the Kyrgyz Republic of December 9, 2015 No. 76/9, December 23, 2015 No. 78/25)

In order to bring the regulatory legal acts of the National Bank into compliance with the Law of the Kyrgyz Republic "On Amendments and Additions to Certain Legislative Acts of the Kyrgyz Republic" No. 60 of April 26, 2013, guided by 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. Approve amendments and additions to certain regulatory legal acts of the National Bank of the Kyrgyz Republic (attached):

1) Regulation "On the Creation and Activity of Microcredit Companies of Microcredit Agencies in the Kyrgyz Republic" approved by Resolution of the Board of the National Bank of the Kyrgyz Republic No. 37/2 of September 11, 2002, registered in the Ministry of Justice of the Kyrgyz Republic, registration number No. 135-02 of October 25, 2002;

2) Regulation "On Licensing, Reorganization and Liquidation of Microfinance Companies on the Territory of the Kyrgyz Republic" approved by Resolution of the Board of the National Bank of the Kyrgyz Republic No. 5/1 of January 31, 2007, registered in the Ministry of Justice of the Kyrgyz Republic, registration number No. 27-07 of March 5, 2007;

3) (Lost force in accordance with the Resolution of the Board of the National Bank of the Kyrgyz Republic of December 23, 2015 No. 78/25)

4) Regulation "On the Procedure for Conducting Exchange Operations with Cash Foreign Currency in the Kyrgyz Republic", approved by Resolution of the Board of the National Bank of the Kyrgyz Republic No. 42/1 of November 30, 2000, registered in the Ministry of Justice of the Kyrgyz Republic, registration number No. 201 of December 15, 2000;

5) Regulation "On the Procedure for Issuing a License for the Right to Conduct Exchange Operations with Cash Foreign Currency", approved by Resolution of the Board of the National Bank of the Kyrgyz Republic No. 40/4 of July 27, 2011.

2. 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.

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

4. Existing microcredit companies must bring the minimum size of authorized capital into compliance with the requirements of paragraph 2.8 of the Regulation "On the Creation and Activity of Microcredit Companies and Microcredit Agencies", approved by Resolution of the Board of the National Bank of the Kyrgyz Republic No. 37/2 of September 11, 2002, within twelve months from the date of entry into force of this resolution.

5. Control over the implementation of this resolution is entrusted to the Deputy Chairman of the National Bank of the Kyrgyz Republic Z.L. Chokoev.

Chairman	Z. Asankozhoeva

	Appendix to the Resolution of the Board of the National Bank of the Kyrgyz Republic of December 23, 2013 No. 52/8

Amendments and additions into certain regulatory legal acts of the National Bank of the Kyrgyz Republic

(In the edition of the Resolution of the Board of the National Bank of the Kyrgyz Republic of December 9, 2015 No. 76/9)

1. (Lost force in accordance with the Resolution of the Board of the National Bank of the Kyrgyz Republic of December 9, 2015 No. 76/9)

2. Make the following amendments and additions to the Regulation "On Licensing, Reorganization and Liquidation of Microfinance Companies on the Territory of the Kyrgyz Republic" approved by Resolution of the Board of the National Bank of the Kyrgyz Republic No. 5/1 of January 31, 2007, registered in the Ministry of Justice of the Kyrgyz Republic, registration number No. 27-07 of March 5, 2007:

1) Redraft paragraph 1.1 as follows:

"1.1. A microfinance company is a specialized financial-credit institution created in the form of a joint-stock company, having received a license from the National Bank and carrying out micro-lending to legal and natural persons, and other types of operations, including attracting term deposits from natural and legal persons, provided for by the Law of the Kyrgyz Republic "On Microfinance Organizations" (hereinafter referred to as the Law "On MFOs"). Microfinance companies have the right to carry out operations in accordance with Islamic principles of banking and financing, in accordance with the regulatory legal acts of the National Bank".

2) In paragraph 1.2, replace the word "microcredit" with the words "microfinance services".

3) Add paragraph 1.4 to Section 1 as follows:

"1.4. 'Systemically important' are microfinance companies that have systemic significance for the microfinance sector. Criteria for systemic significance are determined by the regulatory legal acts of the National Bank. A special regulatory and supervisory regime established by the National Bank of the Kyrgyz Republic applies to systemically important microfinance companies".

4) Redraft paragraph 2.3 as follows:

"2.3. Founders and shareholders of a microfinance company may be natural and legal persons - residents or non-residents of the Kyrgyz Republic, provided that the share of a legal entity, together with the share of any other legal entity controlling it, controlled by it, or under common control with it, does not exceed 20 percent of the voting shares of the microfinance company. This restriction does not apply to a legal entity engaged in banking and/or financial activities, as well as to a foreign non-profit organization, provided they meet the requirements of the National Bank".

5) Redraft paragraph 2.4 as follows:

"2.4. Founder - legal entities must be registered in the manner prescribed by legislation, have a stable financial position, and fulfill their obligations to pay taxes and payments equivalent to them, at least for the last two years (for founder - legal entities working for more than three years).

The following persons are not admitted as founders or shareholders (participants) of a microfinance company if they meet one or more of the following criteria:

1) financial insolvency (bankruptcy) of the founder or shareholder (participant);

2) the presence of a criminal record in the sphere of financial or economic crimes of the founder or shareholder (participant), not expunged or not cleared in the manner prescribed by legislation;

3) the presence of a court decision prohibiting the founder or shareholder (participant) from engaging in banking activities;

4) legal entities registered in offshore zones or having as participants persons and/or affiliated persons registered in offshore zones, or natural persons residing in the territory of offshore zones, the list of which is established by the National Bank;

5) natural persons who are residents of offshore zones, residing in the territory of offshore zones, the list of which is established by the National Bank;

6) legal entities registered or having as participants persons and/or affiliated persons registered in states that do not apply the recommendations of international organizations on the development and implementation of international standards for combating money laundering and financing of terrorism and do not participate in international cooperation in the field of counteracting the financing of terrorism and legalization (money laundering) of proceeds obtained criminally, or natural persons residing in the territory of such states, the list of which is established by the state authorized body of the Kyrgyz Republic in the field of counteracting the financing of terrorism and legalization (money laundering) of proceeds obtained criminally;

7) natural persons who are residents and/or residing in the territory of states that do not apply the recommendations of international organizations on the development and implementation of international standards for combating money laundering and financing of terrorism and do not participate in international cooperation in the field of counteracting the financing of terrorism and legalization (money laundering) of proceeds obtained criminally, the list of which is established by the state authorized body of the Kyrgyz Republic in the field of counteracting the financing of terrorism and legalization (money laundering) of proceeds obtained criminally;

8) legal entities registered or having as participants persons and/or affiliated persons registered in states regarding which decisions (resolutions) of international organizations to which the Kyrgyz Republic has acceded have been adopted, providing for the prohibition and/or restrictions on cooperation with natural and legal persons from these states. The authorized state body in the field of foreign affairs and other state bodies of the Kyrgyz Republic provide, upon request of the National Bank of the Kyrgyz Republic, available information on international sanctions;

9) natural persons who are residents and/or residing in the territory of states regarding which decisions (resolutions) of international organizations to which the Kyrgyz Republic has acceded have been adopted, providing for the prohibition and/or restrictions on cooperation with natural and legal persons from these states. The authorized state body in the field of foreign affairs and other state bodies of the Kyrgyz Republic provide, upon request of the National Bank of the Kyrgyz Republic, available information on international sanctions".

6) Redraft paragraph 3.2 as follows:

"3.2. A microfinance company may carry out the following banking operations taking into account the restrictions established by the National Bank:

1) issuance of secured and unsecured microcredits;

2) acceptance of term deposits from natural and legal persons on terms of returnability for the purpose of accumulating client savings;

3) purchase and sale of debt obligations (factoring);

4) carrying out financial leasing operations, where the microfinance company acts as an intermediary between the supplier or manufacturer of property, financing the sale of the supplier's or manufacturer's property by purchasing it from them and selling it on credit terms to the buyer;

5) carrying out retail banking services under an agency agreement with a bank - without opening accounts for clients in the microfinance company;

6) purchase and sale of foreign currency on its own behalf, in accordance with the regulatory legal acts of the National Bank;

7) issuance of guarantees in an amount not exceeding in total with the microcredit (leasing) the norm of the maximum size of a loan to one borrower;

8) provision of microfinance services in accordance with Islamic principles of banking and financing. In this case, the company has the right to attract funds under "Mudaraba" and "Qard Hasan" transactions only if it has a license for accepting term deposits from natural and legal persons on terms of returnability for the purpose of accumulating client savings.

In the presence of an additional license (indication in the license) of the National Bank, the microfinance company has the right to carry out all or some of the operations listed in sub-paragraphs 1-3 and 6 of this paragraph in foreign currency.

The borrower (lessee) or group of borrowers of the microfinance company may make payments to repay the microcredit (leasing) in both foreign and national currency in the part in which the microcredit was obtained in foreign currency, including payments on the principal amount of the microcredit, interest and/or other payments related to the repayment of the microcredit. In this case, payments in national currency to repay the microcredit (leasing) by the borrower (lessee) or group of borrowers are made at the official exchange rate of foreign currency on the day of payment, determined in accordance with the legislation of the Kyrgyz Republic, unless another rate is established by the contract".

7) Add a second paragraph to paragraph 3.11 as follows:

"This prohibition does not apply to subsidiary banks or subsidiary microfinance organizations when using the names of the main banks (parent) or microfinance organizations (parent)".

8) Add to Section 3:

• paragraph 3.12 as follows:

"3.12. A microfinance company, its branches and representative offices at their location must have a signboard indicating their name";

• paragraph 3.13 as follows:

"3.13. In the event of a change in the location of a microfinance company, its branches and representative offices, the microfinance company must promptly notify the authorized state registration bodies and the National Bank of the Kyrgyz Republic about this".

9) Redraft sub-paragraph 8 of paragraph 4.2 as follows:

"8) a list of officials of the MFO, including information on the members of the Shariah Council (for a company carrying out activities in accordance with Islamic principles of banking and financing), as well as questionnaires and information confirming their compliance with the requirements in accordance with the requirements of the regulatory legal acts of the National Bank".

10) Redraft paragraph 4.6 as follows:

"4.6. To obtain an additional license for the right to issue secured and unsecured microcredits in foreign currency; acceptance of term deposits from natural and legal persons on terms of returnability for the purpose of accumulating client savings in foreign currency, including "Mudaraba" and "Qard Hasan" transactions (attracting funds) for companies carrying out activities in accordance with Islamic principles of banking and financing; purchase and sale of debt obligations (factoring) in foreign currency; issuance of guarantees in foreign currency in an amount not exceeding in total with the microcredit (leasing) the norm of the maximum size of a loan to one borrower; purchase and sale of foreign currency on its own behalf, the following documents are submitted to the UMNL in two copies:

1) an application for the issuance of a license for the right to conduct an operation requiring an additional license;

2) the original or a notarized copy of the decision of the founder or the protocol of the general meeting of shareholders containing the decision to carry out the operation requiring an additional license/license for the right to conduct several operations requiring an additional license;

3) a notarized copy of the charter of the MFO providing for the carrying out of the operation requiring an additional license/license for the right to conduct several operations requiring an additional license;

4) a business plan developed taking into account the carrying out of the operation requiring an additional license/license for the right to conduct several operations requiring an additional license;

5) information on the organizational structure of the MFO;

6) a document confirming the contribution of funds as the authorized capital of the MFO to a savings account in a commercial bank (according to paragraph 2.6 of this Regulation);

7) a conclusion of an audit organization on the financial position of the founders or other information confirming their financial well-being;

8) a document confirming the payment of the license fee in the amount and in the manner established by the legislation of the Kyrgyz Republic".

In the event of obtaining a license for the right to attract deposits on its own behalf on terms agreed with the depositor, in addition to the documents specified in paragraph 4.6 of this regulation, the MFO submits documents provided for by the Law of the Kyrgyz Republic "On Banks and Banking Activity of the Kyrgyz Republic" for obtaining a banking license, at the same time, the premises of the MFO, including the premises of branches, must meet the requirements for technical strengthening, equipment, and fire safety established by the Instruction "On Unified Requirements for Technical Strengthening of Banks, Financial-Credit Institutions and the Procedure for Their Protection in the Kyrgyz Republic", approved by the Order of the Ministry of Internal Affairs of the Kyrgyz Republic and the National Bank of the Kyrgyz Republic No. 97/24-0 of February 11, 2010, for which corresponding acts must be drawn up between the MFO and the authorized state bodies. These requirements also apply to the premises and branches of the MFO when obtaining a license for the conduct of operations for the purchase and sale of foreign currency on its own behalf".

11) In paragraph 4.11, replace the words "thirty calendar days" with the words "two months".

12) In paragraph 5.2, replace the word "thirty calendar days" with the words "two months".

13) Add a second paragraph to paragraph 7.1 as follows:

"The activity of branches and representative offices of the MFO on the territory of foreign states is carried out on the basis of the legislation of the country in which they are opened and/or international treaties that have entered into force in the manner prescribed by law, of which the Kyrgyz Republic is a participant".

14) In the first paragraph of paragraph 7.5, replace the words "notification of the National Bank" with the words "provision of documents for opening in the National Bank".

15) Add a seventh paragraph to paragraph 9.7.2 as follows:

"In the event of an increase in the size of the authorized capital, information allowing determining the sources of origin of the founders' funds is submitted".

16) In paragraph 9.8.5, replace the word "five" with the word "three".

17) In paragraph 9.8.6, replace the word "five" with the word "three".

18) Add a second paragraph to paragraph 10.2 as follows:

"Obligations for the liquidation of a microfinance company, including in the event of revocation of the license by the National Bank, are imposed on its participants (shareholders) or on the management body authorized to liquidate by the charter of the microfinance organization, except in the following cases:

• in the event of insolvency (bankruptcy) of the microfinance organization, it is liquidated in accordance with the legislation of the Kyrgyz Republic on bankruptcy;

• liquidation of microfinance companies having the right to accept term deposits is carried out in accordance with the legislation of the Kyrgyz Republic on the liquidation and bankruptcy of banks".

19) In paragraph 7 of Appendix 3, after the words "Board of Directors", add the words "Shariah Council".

20) In paragraph 13 of Appendix 4, after the words "Board of Directors", add the words "Shariah Council".

21) Redraft Appendix 7 as follows:

	"Appendix 7 to the Regulation on Licensing, Reorganization and Liquidation of MFOs on the Territory of the Kyrgyz Republic

NATIONAL BANK OF THE KYRGYZ REPUBLIC
LICENSE No. ______ for the right to conduct certain banking operations in national currency "_" ______ 200 g.

Microfinance company ______

______ (full name)

created for the purpose of providing accessible microfinance services to overcome poverty, increase employment levels, promote the development of entrepreneurship and social mobilization of the population of the Kyrgyz Republic, in accordance with the Law of the Kyrgyz Republic "On Microfinance Organizations in the Kyrgyz Republic"

legal address of the MFO ______ (abbreviated name)

1. This license permits the following separate banking operations:

1.1) issuance of secured and unsecured microcredits;

1.2) acceptance of term deposits from natural and legal persons on terms of returnability for the purpose of accumulating client savings;

1.3) purchase and sale of debt obligations (factoring);

1.4) carrying out retail banking services under an agency agreement with a bank - without opening accounts for clients in the microfinance company;

1.5) issuance of guarantees in an amount not exceeding in total with the microcredit (leasing) the norm of the maximum size of a loan to one borrower.

2. An integral part of this license is the sheet of restrictions on the conduct of certain banking operations.

This license enters into force from the moment of its signing by the Deputy Chairman of the National Bank, overseeing the UMNL.

This license provides the right to carry out operations directly specified in the license.

The license is non-transferable (named). Rights arising from this license are not subject to transfer to third parties.

Stamp

Deputy Chairman of the National Bank".

22) Redraft Appendix 8 as follows:

	Appendix 8 to the Regulation on Licensing, Reorganization and Liquidation of MFOs on the Territory of the Kyrgyz Republic

RESTRICTION SHEET No. ______
"" ______ 200 g. to license No. ______ issued on "" ______ 200 year for the right to conduct certain banking operations in national currency

Microfinance company "______"

---

(full name of the legal entity)

Serial number of the banking operation	Presence of restriction	Date from which the restriction applies	Note
1.1	No
1.2	No
1.3	No
1.4	No
1.5	No

Deputy Chairman of the National Bank".

23) Add Appendix 11 to the Regulation as follows:

	"Appendix 11 to the Regulation on Licensing, Reorganization and Liquidation of MFOs on the Territory of the Kyrgyz Republic

NATIONAL BANK OF THE KYRGYZ REPUBLIC

LICENSE No. ______ for the right to conduct certain banking operations in foreign currency "_" ______ 20 g.

Microfinance company ______ (full name)

created for the purpose of providing accessible microfinance services to overcome poverty, increase employment levels, promote the development of entrepreneurship and social mobilization of the population of the Kyrgyz Republic, in accordance with the Law of the Kyrgyz Republic "On Microfinance Organizations in the Kyrgyz Republic"

legal address of MFC ______ (short name)

1. This license permits the following separate banking operations:

1.1) issuance of secured and unsecured microloans;

1.2) acceptance of term deposits from individuals and legal entities on a repayable basis for the purpose of accumulating client savings;

1.3) purchase and sale of debt obligations (factoring);

1.4) issuance of guarantees in an amount not exceeding in total with the microloan (leasing) the norm of the maximum loan size for one borrower;

1.5) purchase and sale of foreign currency in its own name.

2. An integral part of this license is the restriction sheet for conducting separate banking operations.

This license enters into force from the moment of its signing by the Deputy Chairman of the National Bank, supervising the UMNL.

This license grants the right to carry out operations explicitly stipulated in the license.

The license is non-transferable (named). Rights arising from this license are not subject to transfer to third parties.

Stamp

Deputy Chairman of the National Bank".

24) Supplement the Regulation with Appendix 12 of the following content:

	"Appendix 12 to the Regulation on Licensing, Reorganization and Liquidation of MFCs in the territory of the Kyrgyz Republic

RESTRICTION SHEET No. ______
"" ______ 200 g. to license No. ______ issued "" ______ 200 year for the right to conduct banking operations in foreign currency

Microfinance Company "______"

---

(full name of the legal entity)

Serial number of banking operation	Presence of restriction	Date from which the restriction applies	Note
1.1	No
1.2	No
1.3	No
1.4	No
1.5	No

Deputy Chairman of the National Bank".

3. Make the following changes and additions to the Regulation "On Licensing of Credit Unions", approved by Resolution of the Board of the National Bank of the Kyrgyz Republic No. 14/3 of 04.05.05, registered in the Ministry of Justice of the Kyrgyz Republic, registration number No. 75-05 of 10.06.2005:

1) Redraft Paragraph 1.2 as follows:

"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 credit union participants and using them for mutual lending, as well as providing other financial services, including in accordance with Islamic principles of banking and financing".

2) Supplement sub-paragraph 1 of paragraph 1.4 with a fourth paragraph of the following content:

"- provision of financial services in accordance with Islamic principles of banking and financing according to the Regulation "On Operations Carried Out by Microfinance Organizations and Credit Unions in Accordance with Islamic Principles of Banking and Financing", approved by Resolution of the Board of the National Bank of 26.10.2011 No. 60/8".

3) Redraft sub-paragraph 2 of paragraph 1.4 as follows:

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

• attracting deposits (deposits) from participants of the credit union in national and foreign currency. In the presence of a license for attracting deposits (deposits) from participants of the credit union in national and foreign currency, the Credit Union also has the right to obtain the following additional licenses for:

• provision of retail banking services under an agency agreement with a bank - without opening accounts for clients in the credit union;

• settlement of instructions from participants of the credit union under an agreement with a bank or other authorized financial and credit institution without opening an account in the credit union;

• provision of loans to participants of the credit union on terms of term, repayability and cost in foreign currency;

• purchase and sale of foreign currency in its own name, in accordance with regulatory legal acts of the National Bank".

4) In paragraph 5.1, after the words "deposits (deposits)", add the words "including carrying out the 'Mudaraba' and 'Qard Hasan' (attracting funds) transaction - for a credit union carrying out activities in accordance with Islamic financing principles".

5) Redraft the title of Section 6 as follows:

"6. Procedure for granting a credit union the right to carry out operations requiring an additional license".

6) Redraft the first paragraph of paragraph 6.1 as follows:

"The right to carry out operations requiring an additional license is granted to a credit union if the credit union meets the following minimum requirements of the NBKR at the time of submitting the application";

• redraft sub-paragraph 2 of paragraph 6.1 as follows:

"2) presence of internal regulatory documents (policy, procedures) for carrying out operations requiring an additional license";

• supplement paragraph 6.1 with sub-paragraph 3 of the following content:

"3) presence of a license for attracting deposits (deposits) from participants of the credit union in national and foreign currency".

7) Redraft the first paragraph of paragraph 6.2 as follows:

"To obtain the right to carry out operations requiring an additional license, the credit union must submit to the authorized structural subdivision of the NBKR the following documents, in two copies:";

• redraft sub-paragraph 3 of paragraph 6.2 as follows:

"3) economic justification with a forecast calculation of the volume and number of operations of the credit union requiring an additional license";

• redraft sub-paragraph 5 of paragraph 6.2 as follows:

"5) regulatory documents (policy, procedures) of the credit union for carrying out operations of the credit union requiring an additional license, with a copy of the decisions of the management bodies of the credit union approving these documents";

• supplement paragraph 6.2 with sub-paragraph 6 of the following content:

"6) in the case of obtaining an additional license for carrying out operations for the purchase and sale of foreign currency in its own name, the credit union must comply with the requirements of the Regulation "On the Procedure for Conducting Exchange Operations with Cash Foreign Currency in the Kyrgyz Republic", approved by Resolution of the Board of the National Bank of the Kyrgyz Republic No. 42/1 of 30.11.2000".

8) Supplement paragraph 8.1 with a sub-paragraph of the following content:

"- creation of a Shariah Council in accordance with the regulatory legal acts of the National Bank".

9) Redraft Paragraph 1 of Appendix 3 as follows:

"1. The National Bank of the Kyrgyz Republic, in order to reduce possible risks in the activities of credit unions, establishes minimum requirements for candidates for the position of Chairman of the Board, Chairman of the Supervisory Board, members of the Shariah Council (for credit unions providing services in accordance with Islamic financing principles, while the coordination of members of the Shariah Council is carried out in accordance with the requirements of the regulatory legal acts of the National Bank) and the chief accountant (accountant with the rights of the chief accountant, in the absence of the position of chief accountant in the staff list)".

10) Redraft Appendix 5 as follows:

	"Appendix 5 to the Regulation on Licensing of Credit Unions

NATIONAL BANK OF THE KYRGYZ REPUBLIC

LICENSE No. ______ from "_" ______ 20 year

Issued to the credit union ______ (full name of the credit union)

legal address of the credit union ______

---

This license permits the following additional services (operations):

• attracting deposits (deposits) from participants of the credit union in national and foreign currency;

• provision of retail banking services under an agency agreement with a bank - without opening accounts for clients in the credit union;

• settlement of instructions from participants of the credit union under an agreement with a bank or other authorized financial and credit institution without opening an account in the credit union;

• provision of loans to participants of the credit union on terms of term, repayability and cost in foreign currency;

• purchase and sale of foreign currency in its own name.

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 and prohibition of the credit union's activities.

The license is valid indefinitely.

Copies of the license are invalid.

Stamp

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

4. Make the following changes and additions to the Regulation "On the Procedure for Conducting Exchange Operations with Cash Foreign Currency in the Kyrgyz Republic", approved by Resolution of the Board of the National Bank of the Kyrgyz Republic No. 42/1 of 30.11.2000, registered in the Ministry of Justice of the Kyrgyz Republic, registration number No. 201 of 15.12.2000:

1) In paragraph 1.1, replace the words "Physical and legal" with the word "Legal".

2) Redraft the second and third paragraphs of paragraph 1.3 as follows:

"Exchange Point" - a specially equipped place for conducting exchange operations with cash foreign currency, carried out by authorized banks, specialized financial and credit institutions and credit unions in accordance with the license of the National Bank of the Kyrgyz Republic.

"Exchange Bureau" - a specially equipped point created by a legal entity for conducting exchange operations with cash foreign currency, carried out in accordance with the license of the National Bank of the Kyrgyz Republic.

Supplement paragraph 1.3 with paragraphs of the following content:

"Microfinance Company - a specialized financial and credit institution created in the form of a joint-stock company, having received a license from the National Bank and carrying out micro-lending to legal and physical persons and other types of operations, including attracting term deposits from physical and legal persons, provided for by this Law.

Microcredit Company - a specialized financial and credit institution created in any organizational and legal form of a commercial organization, having received a certificate from the National Bank and carrying out micro-lending to physical and legal persons and other types of operations provided for by this Law.

Credit Union - 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 credit union participants and using them for mutual lending, as well as providing other financial services, including in accordance with Islamic principles of banking and financing.

3) Redraft the title of Section 2 as follows:

"2. Rights and obligations of authorized banks, exchange bureaus, microfinance and microcredit companies, credit unions".

4) Redraft paragraph 2.1 as follows:

"2.1. Authorized banks, exchange bureaus, microfinance and microcredit companies, credit unions independently organize and carry out their activities within the competence provided to them by the legislation of the Kyrgyz Republic".

5) Redraft the first paragraph of paragraph 2.5 as follows:

"Authorized banks, microfinance and microcredit companies, credit unions, exchange bureaus are obliged".

6) In paragraph 2.5:

• in sub-paragraph 1, exclude the words "Full Name";
• in sub-paragraph 13, exclude the words "or Full Name";
• in sub-paragraph 27, exclude the words "or private entrepreneur".

7) In paragraph 2.6, exclude the words "or physical".

8) Redraft the first paragraph of paragraph 3.1 as follows:

"Authorized banks, exchange bureaus, microfinance and microcredit companies, credit unions carry out operations for the purchase and sale of cash foreign currency in compliance with the following regulatory legal acts:";

9) Redraft the second paragraph of paragraph 3.2 as follows:

"Authorized banks, microfinance and microcredit companies, credit unions establish for exchange points the rates for the purchase and sale of foreign currency in accordance with the procedure established by this Regulation".

9) In the first paragraph of paragraph 3.3, after the words "or exchange bureau", add the words "microfinance company, microcredit company, credit union".

10) In paragraph 3.8, replace the words "Physical and legal" with the word "Legal".

11) In paragraph 3.9, exclude the words "or private entrepreneur".

12) In paragraph 3.13:

• in the first sentence, exclude the words "and physical";
• in the second sentence, exclude the words "or physical".

13) In paragraph 4.15, exclude the words "and physical".

14) In paragraph 4.20, exclude the words "(private entrepreneur)".

15) In the third paragraph of paragraph 5.1, exclude the words "and physical".

16) Redraft Section 7 as follows:

"7. Supervision of the activities of exchange bureaus and exchange points

7.1. The NBKR exercises supervision over the activities of exchange points of authorized banks, microfinance and microcredit companies, credit unions, exchange bureaus in order to ensure compliance of their activities with the requirements of the legislative and regulatory legal acts of the Kyrgyz Republic.

7.2. The NBKR is not responsible for risks arising from exchange operations with cash foreign currency in exchange points of authorized banks, microfinance and microcredit companies, credit unions, exchange bureaus.

7.3. The NBKR has the right to check the activities of exchange points of authorized banks, microfinance and microcredit companies, credit unions, exchange bureaus without prior notice upon presentation of a document serving as the basis for the check.

7.4. Exchange points of authorized banks, microfinance and microcredit companies, credit unions, and exchange bureaus, during inspections of their activities by the NBKR, are obliged to provide a separate room in the exchange point or exchange bureau to a group of NBKR inspectors, in which there are no audio/video devices carrying out audio/video recording, prevent any attempts by third parties to install audio/video equipment in the room provided to the NBKR inspection group, ensure the safety of storage of documents of the exchange point of an authorized bank, microfinance organization, credit union or exchange bureau and the NBKR inspection group, and also provide the NBKR inspection group with equipment and technology necessary for carrying out the inspection.

7.5. The NBKR has the right to apply preventive measures and sanctions to authorized banks, microfinance and microcredit companies, credit unions and exchange bureaus in cases provided for by legislation.

7.6. Upon detection of violations of the procedure for conducting exchange operations with cash foreign currency, as well as requirements of regulatory documents regulating the activities of authorized banks, microfinance and microcredit companies, credit unions, and exchange bureaus (points), the NBKR has the right:

• to send a warning or an order to eliminate the identified violations and give a certain period for their elimination depending on the type of violation;
• to take measures to impose fines in accordance with current legislation;
• to suspend the license for a period of up to 7 working days;
• to withdraw the license.

20) In Appendix 1, exclude the words "or Full Name of a physical person".

21) In Appendix 3:

• exclude paragraph 3 of the Notes;
• in paragraph 5 of the Notes, exclude the words "and physical";
• paragraphs 4-5 are considered paragraphs 3-4 respectively.

22) In the first column of forms 1, 2 and 3 of Appendix 6, exclude the words "Full Name of the private entrepreneur".

5. Make the following changes and additions to the Regulation "On the Procedure for Issuing a License for the Right to Conduct Exchange Operations with Cash Foreign Currency", approved by Resolution of the Board of the National Bank of the Kyrgyz Republic No. 40/4 of 27.07.2011:

1) Redraft the second paragraph of paragraph 1 as follows:

"Exchange Bureau" - a specially equipped point created by a legal entity for conducting exchange operations with cash foreign currency, carried out in accordance with the license of the National Bank of the Kyrgyz Republic.

2) Throughout the text of paragraph 4 of paragraph 1:

• exclude the words "or physical" in various cases;
• replace the number "100000" with the number "1000000".

3) In paragraph 3, exclude the words "and physical".

4) In paragraph 7, exclude the words "and physical".

5) In paragraph 9:

• in the fifth and seventh paragraphs, exclude the words "for legal entities";
• redraft the eighth paragraph as follows:

"- certificate of a commercial bank confirming the presence on the day of submitting the application of working funds of the applicant in the amount of not less than 1000000 soms in a savings account in a commercial bank (upon registration of the license). Funds located in the savings account cannot be used by the founders for any purposes and cannot be withdrawn until the license is obtained".

6) In paragraph 14, exclude the words "to a legal or physical person -".

7) In paragraph 25:

• in the first paragraph, exclude the words "for legal entities";
• in the third paragraph, exclude the words "of a legal entity".

8) In paragraph 27, exclude the words "for legal entities".

9) Redraft paragraph 30 as follows:

"30. One legal entity having a license for the right to conduct exchange operations with cash foreign currency has the right to open no more than one additional exchange bureau within each region and city of republican significance of the Kyrgyz Republic".

10) In the seventh paragraph of paragraph 32, replace the number "100000" with the number "1000000".

11) In the second and fifth paragraphs of paragraph 43, exclude the words "or physical".

12) In paragraph 44:

• in sub-paragraph 7, exclude the words "or in the certificate of state registration of a private entrepreneur";
• throughout the text of sub-paragraph 9, exclude the words "for legal entities";
• in sub-paragraph 10, exclude the words "for legal entities";
• in sub-paragraph 12, replace the words "of a legal or physical person - applicant and/or (for legal entities)" with the words "applicant and/or".

13) In paragraph 47:

• in sub-paragraph 2, exclude the words "or death of a physical person to whom the license was issued";
• in sub-paragraph 3, exclude the words "or physical".

14) In paragraph 48, exclude the words "or physical".

15) In sub-paragraph 2 of paragraph 51, exclude the words "or physical".

16) In paragraph 52, exclude the words "for legal entities".

17) In Appendix 1, exclude the words "Full Name of a physical person".

18) In Appendix 2:

• in the right column, exclude the words "Full Name, residence of a physical person";
• throughout the text of the Appendix, exclude the words "individual entrepreneur" in various cases.

19) In Appendix 3, exclude the words "Full Name of a physical person,".

20) In Appendix 4:

• exclude the words "or Full Name of a physical person";
• throughout the text of the Appendix, exclude the words "individual entrepreneur" in various cases.

21) In Appendix 5, exclude the words "or Full Name and address of a physical person".

22) In Appendix 6:

• in the right column, exclude the words "or Full Name of a physical person";
• exclude the words "or individual entrepreneur", "individual entrepreneur".

23) In Appendix 7, exclude the words "or Full Name of a physical".

24) In Appendix 8, exclude the words "or Full Name of a physical person", "or physical", "for legal entities", "physical person/", "signature of a physical person/".