Resolution of the Board of the National Bank of the Kyrgyz Republic No. 9/12 of March 27, 2013 on Amendments and Additions to Resolution No. 4/1

NATIONAL BANK OF THE KYRGYZ REPUBLIC

RESOLUTION

of March 27, 2013 No. 9/12

On Amendments and Additions to the Resolution of the Board of the National Bank of the Kyrgyz Republic of March 2, 2005 No. 4/1 "On Approval of the Policy and Basic Principles of Antimonopoly Regulation, Development of Competition and Protection of Consumer Rights in the Market of Banking Services of the Kyrgyz Republic Provided by Commercial Banks and Other Financial and Credit Institutions Licensed and Regulated by the NBKR", registered in the Ministry of Justice of the Kyrgyz Republic on 01.04.2005, registration number 44-05

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. To make amendments and additions to the Policy and Basic Principles of Antimonopoly Regulation, Development of Competition and Protection of Consumer Rights in the Market of Banking Services of the Kyrgyz Republic Provided by Commercial Banks and Other Financial and Credit Institutions Licensed and Regulated by the NBKR, approved by the Resolution of the Board of the National Bank of the Kyrgyz Republic of March 2, 2005 No. 4/1, registered in the Ministry of Justice of the Kyrgyz Republic on 01.04.2005, registration number 44-05 (attached).

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

3. The Legal Department:

• publish this Resolution on the official website of the National Bank of the Kyrgyz Republic and in the journal "Regulatory Acts 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.

4. The Supervision and Licensing Methodology Department to bring this Resolution to the attention of commercial banks, the Association of Microfinance Organizations, the National Union of Credit Unions and Cooperatives of Kyrgyzstan, the Association of Credit Unions and Cooperatives of Kyrgyzstan, and JSC "Financial Company of Credit Unions".

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. Asankhozhayeva

	Appendix to the Resolution of the Board of the National Bank of the Kyrgyz Republic of March 27, 2013 No. 9/12

AMENDMENTS AND ADDITIONS to the Policy and Basic Principles of Antimonopoly Regulation, Development of Competition and Protection of Consumer Rights in the Market of Banking Services of the Kyrgyz Republic Provided by Commercial Banks and Other Financial and Credit Institutions Licensed and Regulated by the NBKR, approved by the Resolution of the Board of the National Bank of the Kyrgyz Republic of March 2, 2005 No. 4/1, registered in the Ministry of Justice of the Kyrgyz Republic on April 1, 2005, registration number 44-05

To make the following amendments and additions to the Policy and Basic Principles of Antimonopoly Regulation, Development of Competition and Protection of Consumer Rights in the Market of Banking Services of the Kyrgyz Republic Provided by Commercial Banks and Other Financial and Credit Institutions Licensed and Regulated by the NBKR, approved by the Resolution of the Board of the National Bank of the Kyrgyz Republic of March 2, 2005 No. 4/1, registered in the Ministry of Justice of the Kyrgyz Republic on April 1, 2005, registration number 44-05:

1. In the title, replace the word "NBKR" with the words "National Bank of the Kyrgyz Republic".

2. Throughout the text, replace the word "NBKR" with the words "National Bank" in various grammatical cases, and replace the word "bank" with the word "FKI" (Financial and Credit Institution).

3. In paragraph 1.1 of Section 1, after the words "On Banks and Banking Activity in the Kyrgyz Republic", add the words "On Microfinance Organizations in the Kyrgyz Republic", "On Credit Unions", "On Competition".

4. In paragraph 2.2 of Section 2:

• rewrite paragraph 4 in the following edition:

"competition in the market of banking services is free competition between FCI, the independent actions of which limit the ability of each of them to unilaterally influence the general conditions of conducting business in the market of banking services;";

• rewrite paragraph 5 in the following edition:

"monopolistic activity in the market of banking services is abuse by FCI, a group of persons of their dominant position, agreements or coordinated actions contrary to antimonopoly legislation, actions (inaction) of FCI (group of persons) aimed at preventing, limiting or eliminating competition;";

• delete paragraph 9;

• add paragraph 9 of the following content:

"anti-competitive agreements (coordinated actions) - an agreement in written form contained in a document or several documents, as well as an oral agreement, the proof of which may be an analysis of changes in the situation in the market of banking services.".

5. In Section 3:

• rewrite the title of the section in the following edition: "Dominant Position of FCI";

• rewrite paragraph 3.1 in the following edition:

"The dominant position is determined for any type of banking services provided by FCI on the territory of the Kyrgyz Republic.";

• rewrite sub-item c) of paragraph 3.3 in the following edition:

"establishment of monopolistically high (low) prices for provided services, which are determined in accordance with the legislation of the Kyrgyz Republic;".

6. Rewrite the title of Section 5 in the following edition:

"Anti-competitive Agreements (Coordinated Actions) of FCI Limiting Competition in the Market of Banking Services".

7. In paragraph 6.1 of Section 6:

• rewrite sub-item 6.1.2 in the following edition:

"Control over compliance with antimonopoly legislation in the market of banking services, including when concluding agreements and conducting coordinated actions of FCI, when creating, reorganizing (merger, accession, transformation) of FCI and acquisition of shares of FCI.";

• in sub-item 6.2.1, replace the words "Law of the KR 'On Banks and Banking Activity in the Kyrgyz Republic'" with the words "legislation of the Kyrgyz Republic".

8. Rewrite Section 8 "Mechanism of Antimonopoly Regulation by the National Bank" in the following edition:

"8.1. In the process of supervisory activity on antimonopoly regulation, development of competition and protection of consumer rights in the market of banking services, the National Bank uses methods combining the licensing regime, conducting external supervision and on-site inspections.

8.2. The dominant position of FCI in the market of banking services is determined in accordance with the Regulation on Determining the Dominant Position in the Market of Banking Services, approved by the Resolution of the Board of the National Bank of March 28, 2007 No. 16/5.

8.3. During on-site inspections conducted by the National Bank, an analysis of the pricing of banking services, the procedure for developing and approving tariffs for compliance with the internal pricing policy of FCI is carried out, and the corresponding information is reflected in the general report on the results of the FCI inspection.

8.4. The National Bank considers cases of non-compliance by FCI with antimonopoly legislation or violation of other regulatory legal acts on the development of competition and protection of consumer rights based on information contained both in inspection reports and discovered in the process of carrying out external supervision and licensing in part:

• actions in making transactions contrary to antimonopoly legislation;

• violation of the pricing procedure, including the establishment and maintenance of monopolistically high (low) prices;

• establishment of collusion for the purpose of limiting competition, the proof of which may be an analysis of changes in the situation in the market of banking services;

• written statements from consumers of banking services with attached documents confirming the existence of violation facts.

8.5. Upon detection of violations by FCI of antimonopoly legislation, as well as upon consideration of received statements, the National Bank may decide to conduct an unscheduled (complex or targeted) inspection in accordance with the established procedure and/or to apply an impact measure in accordance with the legislation of the Kyrgyz Republic.".