Resolution of the Board of the National Bank of the Kyrgyz Republic No. 62/3 of 14 October 2015 on 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" No. 51/6 of 28 December 2009

NATIONAL BANK OF THE KYRGYZ REPUBLIC

RESOLUTION

of 14 October 2015 No. 62/3

On 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" No. 51/6 of 28 December 2009

In accordance with 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. To introduce into 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" No. 51/6 of 28 December 2009 the amendments and additions (attached).

2. This Resolution applies to newly issued and restructured loans after the entry into force of this Resolution.

3. This Resolution enters into force upon the expiry of fifteen days from the day of its official publication.

4. To 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.

5. To the Supervision Methodology and Licensing Department to bring this Resolution to the attention of commercial banks.

6. To assign control over the execution of this Resolution to the Deputy Chairman of the National Bank, L.J. Orozbaeva.

Chairman		T. Abdygulov
	Annex to the Resolution of the Board of the National Bank of the Kyrgyz Republic of 14 October 2015 No. 62/3

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" No. 51/6 of 28 December 2009

To introduce into 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" No. 51/6 of 28 December 2009 the following amendments and additions:

in the Regulation "On Classification of Assets and Corresponding Allocations to the Reserve for Potential Losses and Depreciation in Carrying Out Operations in Accordance with Islamic Principles of Banking and Financing", approved by the above-mentioned Resolution:

• the second sentence of paragraph 16, after the words "classification category", shall be supplemented with the words ", unless otherwise established by this Regulation.";

• paragraph 21 shall be supplemented with a paragraph of the following content:

"Banks may classify assets carrying credit risk in national currency as "normal assets" if they meet the requirements specified in paragraph 22 of this Regulation.";

• paragraph 22 shall be supplemented with a paragraph of the following content:

"- initial restructuring of an asset carrying credit risk by converting the currency of that asset from foreign currency to national currency, if that asset was not previously included in the category of "classified assets".";

• to supplement with paragraph 22-1 of the following content:

"22-1. A bank must classify an asset in foreign currency at least as a "satisfactory" asset if the client that received that asset has a share of income (revenue) in foreign currency in the total volume of its aggregate income (revenue) of more than 75 percent.";

• the twelfth paragraph of paragraph 23, after the word "asset", shall be supplemented with words of the following content ", with the exception of the restructuring specified in paragraph 22 of this Regulation.";

• to supplement with paragraphs 23-1 and 23-2 of the following content:

"23-1. A bank must classify an asset carrying credit risk in foreign currency at least as an "asset under observation" if the client that received that asset has a share of income (revenue) in foreign currency in the total volume of its aggregate income (revenue) of from 50 to 75 percent.

23-2. A bank must classify an asset carrying credit risk in foreign currency at least as an "asset under observation" if the client that received that asset has a share of income (revenue) in foreign currency in the total volume of its aggregate income (revenue) of less than 50 percent.";

• paragraph 26 shall be supplemented with a paragraph of the following content:

"In the event of overdue payment of debt on an asset for 180 days or more, that asset must be classified as "losses".";

• paragraph 43-1, after the word "classified", shall be supplemented with the words "at least";

• paragraph 43-2 shall be set out in the following wording:

"43-2. If the collateral for an asset located outside the Kyrgyz Republic constitutes more than 50 percent of the total value of the collateral, that asset is classified at least as an "asset under observation".";

• paragraph 47 shall be set out in the following wording:

"47. The National Bank establishes the following amounts of allocations to the RPPU for assets placed in accordance with Islamic principles of banking and financing:

General reserves:		Special reserves:
Normal - 0%;		Substandard - 25%;
Satisfactory - 2/2.5%;		Doubtful - 50%;
Assets under observation - 5/7.5%;		Losses - 100%.

For "satisfactory" assets, the bank must form the RPPU in the amount of 2 percent, with the exception of the assets specified in paragraph 22-1 of this Regulation, for which the RPPU amount must be 2.5 percent.

For "assets under observation", the bank must form the RPPU in the amount of 5 percent, with the exception of the assets specified in paragraph 23-2 of this Regulation, for which the RPPU amount must be 7.5 percent.".