Resolution of the National Bank of the Kyrgyz Republic No. 2020-P-14/12-3-(PS) of 18 March 2020 on Amending the Resolution of the Board of the National Bank of the Kyrgyz Republic on Approval of the Regulation on Basic Requirements for the Activities of Commercial Banks when Concluding an Agency Agreement for the Provision of Retail Banking Services of 26 May 2010 No. 36/7

NATIONAL BANK OF THE KYRGYZ REPUBLIC

RESOLUTION

of 18 March 2020 No. 2020-P-14/12-3-(PS)

On Amending the Resolution of the Board of the National Bank of the Kyrgyz Republic "On Approval of the Regulation "On Basic Requirements for the Activities of Commercial Banks when Concluding an Agency Agreement for the Provision of Retail Banking Services" of 26 May 2010 No. 36/7

In accordance with Articles 20 and 68 of the Law of the Kyrgyz Republic "On the National Bank of the Kyrgyz Republic, Banks and Banking Activities", the Board of the National Bank of the Kyrgyz Republic resolves:

1. To amend the Resolution of the Board of the National Bank of the Kyrgyz Republic "On Approval of the Regulation "On Basic Requirements for the Activities of Commercial Banks when Concluding an Agency Agreement for the Provision of Retail Banking Services" of 26 May 2010 No. 36/7 (attached).

2. 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 Normative Legal Acts of the Kyrgyz Republic.

3. This resolution enters into force upon the expiration of fifteen days from the day of official publication, except for the amendments to paragraphs 7-1 and 62 of the Regulation "On Basic Requirements for the Activities of Commercial Banks when Concluding an Agency Agreement for the Provision of Retail Banking Services", which enter into force on 1 October 2020.

4. To the Payment Systems Department: bring this resolution to the attention of commercial banks, JSC "Interbank Processing Center", LEA "Association of Microfinance Organizations", LEA "Association of Payment System Operators KG", LEA "Association of Exchange Bureaus "Alliance" and SE "Kyrgyz Post".

5. To the Department for the Development of the State Language and Document Management: bring this resolution to the attention of the relevant structural subdivisions, regional departments and the representative office of the National Bank in Batken region.

6. To assign control over the execution of this resolution to the member of the Board of the National Bank of the Kyrgyz Republic supervising the Payment Systems Department.

Chairman of the Board of the National Bank of the Kyrgyz Republic	T. Abdygulov

Annex to the Resolution of the Board of the National Bank of the Kyrgyz Republic of 18 March 2020 No. 2020-P-14/12-3-(PS)

AMENDMENTS to the Resolution of the Board of the National Bank of the Kyrgyz Republic "On Approval of the Regulation "On Basic Requirements for the Activities of Commercial Banks when Concluding an Agency Agreement for the Provision of Retail Banking Services" of 26 May 2010 No. 36/7

To introduce the following amendments to the Resolution of the Board of the National Bank of the Kyrgyz Republic "On Approval of the Regulation "On Basic Requirements for the Activities of Commercial Banks when Concluding an Agency Agreement for the Provision of Retail Banking Services" of 26 May 2010 No. 36/7:

In the Regulation "On Basic Requirements for the Activities of Commercial Banks when Concluding an Agency Agreement for the Provision of Retail Banking Services", approved by the above-mentioned Resolution:

• in paragraph 3, replace the words "On Combating the Legalization (Laundering) of Criminal Proceeds and the Financing of Terrorist or Extremist Activities" with the words "On Combating the Financing of Terrorist Activities and the Legalization (Laundering) of Criminal Proceeds";

• restate paragraph 5 as follows:

"5. The expanded range of retail banking services includes:

• acceptance and processing of payments and settlements for goods and services that are not the result of one's own activity, in favor of third parties through payment systems based on information technologies and electronic means and methods of making payments;

• execution of money transfers through money transfer systems;

• issuance and acceptance of forms for opening a bank account for the purpose of transferring them to the bank;

• issuance and acceptance of forms for the issuance/reissuance of bank payment cards;

• issuance and acceptance of forms for access to remote banking services, including electronic wallets, for the purpose of transferring them to the bank;

• issuance and acceptance of forms for the issuance/reissuance of access codes to remote banking services for the purpose of transferring them to the bank;

• provision of issued access codes to remote banking services, subject to the conditions of security and confidentiality of information/data about the client;

• issuance and acceptance of forms for processing loans for the purpose of transferring them to the bank;

• repayment of loans;

• replenishment of a bank account;

• distribution/redemption of electronic money;

• issuance of cash from bank cards;

• acceptance of payments to the budget (fines, taxes, customs duties), including using mobile applications and QR codes.

Transfer of information to the bank for the types of the expanded range of retail banking services in electronic form is allowed in accordance with the Law of the Kyrgyz Republic "On Electronic Signature".";

• restate paragraph 6 as follows:

"6. The limited range of retail banking services includes:

• acceptance and processing of payments and settlements for goods and services that are not the result of one's own activity, in favor of third parties through payment systems based on information technologies and electronic means and methods of making payments;

• repayment of loans;

• distribution/redemption of electronic money;

• issuance of cash from bank cards;

• acceptance of payments to the budget (fines, taxes, customs duties), including using mobile applications and QR codes.";

• restate paragraph 6-1 as follows:

"6-1. When engaging a retail agent for the distribution/redemption of electronic money, the bank must comply with the requirements of the National Bank established in the Regulation "On Electronic Money in the Kyrgyz Republic", approved by Resolution of the Board of the National Bank of 30 March 2016 No. 15/6. In case of non-compliance with the requirements of normative legal acts, the National Bank has the right to apply enforcement measures in accordance with the legislation of the Kyrgyz Republic.";

• supplement paragraph 7-1 with a fourth paragraph as follows:

"- redemption of electronic money from unverified electronic wallets.";

• supplement the Regulation with paragraph 9-2 as follows:

"9-2. Form - a sheet of paper/or an electronic form (formulary) with the printed name of the bank with partially printed text, intended for drawing up a document in a certain form, where handwritten entries are made in the designated places (for opening a bank account/electronic wallets, issuing bank payment cards, obtaining remote banking services, etc.) and certified by the client's signature.";

• in paragraph 12, after the word "Guarantee" add the word "(insurance)";

• in paragraph 20:

subparagraph 5, after the words "security" add the words "and technical fortification";

• supplement the paragraph with subparagraphs 11 and 12 as follows:

"11) requirements for proper customer due diligence and data storage in accordance with the legislation of the Kyrgyz Republic in the field of combating the financing of terrorist activities and the legalization (laundering) of criminal proceeds (hereinafter - CFT/AML), if the bank transfers customer due diligence functions to a retail agent;

12) deadlines for providing necessary information about the client and beneficial owner, copies of questionnaires of the client and beneficial owner, as well as copies of other documents obtained as a result of proper customer due diligence, if the bank transfers these customer due diligence functions to a retail agent in accordance with the Regulation "On the Procedure for Conducting Proper Customer Due Diligence", approved by Resolution of the Government of the Kyrgyz Republic of 25 December 2018 No. 606.

Subparagraphs 11 and 12 of paragraph 20 of this Regulation do not apply to agents of the limited range of retail banking services.";

• supplement paragraph 25 with subparagraph 2-1 as follows:

"2-1) State Enterprise "Kyrgyz Post", in addition to providing the limited range of retail banking services specified in paragraph 6, subject to banks' compliance with customer due diligence requirements, may additionally provide the following services:

• issuance and acceptance of forms for opening a bank account for the purpose of transferring them to the bank;

• issuance and acceptance of forms for the issuance/reissuance of bank payment cards;

• issuance and acceptance of forms for access to remote banking services, including electronic wallets, for the purpose of transferring them to the bank;

• issuance and acceptance of forms for the issuance/reissuance of access codes to remote banking services for the purpose of transferring them to the bank;

• issuance and acceptance of forms for processing loans for the purpose of transferring them to the bank.";

• in paragraph 31, replace the word "(reserve)" with the word "(insurance)";

• restate paragraph 32 as follows:

"32. The bank is responsible for the performance by its retail agent of activities in accordance with the requirements of the legislation on CFT/AML.";

• restate the second, third, fourth and fifth paragraphs of paragraph 34-1 as follows:

"- availability of a patent (including electronic) for carrying out entrepreneurial activity;

• mandatory training of the agent for the provision of retail banking services and issuance of a confirming document (letter on conducting/completion of training/certificate, etc.) to the agent;

• depending on the limits established for agents in trade and service enterprises, provide for appropriate measures of physical security and technical fortification depending on the type of services provided and associated risks;

• if the agent provides services only in non-cash form, technical equipment and other measures of ensuring physical security are not required.";

• in paragraph 39, after the word "guarantee" add the word "(insurance)";

• restate paragraph 46 as follows:

"46. The methods, techniques, conditions for accepting payments, compliance with the deadlines for processing payments, as well as requirements for identification and verification of the payer are established in the Agreement between the bank and the retail agent in accordance with the legislation of the Kyrgyz Republic.";

• in paragraph 59, after the words "payment cards" add the words "and confidentiality in the provision of personal data for their subsequent transfer to the bank";

• supplement paragraph 62 with subparagraph 8 as follows:

"8) take measures in accordance with the risk-oriented approach established in the internal control procedures/programs for the identification and verification of the client-sender of funds in accordance with the normative legal acts of the Kyrgyz Republic when providing services through an automated self-service terminal.";

• in the fourth paragraph of paragraph 64, after the words "barcodes" add the words "and/or QR codes".