REPEALED

in accordance with the resolution of the Board of the National Bank of the Kyrgyz Republic dated 14 June 2006 No. 17/6

Registered with the Ministry of Justice of the Kyrgyz Republic

22 October 2004. Registration number 119-04

Approved

by resolution of the Board

of the National Bank

of the Kyrgyz Republic

dated 15 September 2004 No. 24/5

TEMPORARY INSTRUCTION

on minimum requirements for officials

and heads of the internal audit service

of commercial banks and financial and credit institutions

licensed by the National Bank of the Kyrgyz Republic

and the procedure for their approval by the National Bank

of the Kyrgyz Republic

(As amended by the resolution of the Board of the National Bank of the Kyrgyz Republic dated 8 February 2006 No. 4/2)

Chapter 1. General provisions

Chapter 2. Requirements for members of the Board of Directors of a bank
and FCU and the Chairman of the Audit Committee

Chapter 3. Requirements for members of the Management Board, heads
of branches and main structural subdivisions, as well as heads of the internal audit service of a bank and FCU

Chapter 4. Grounds for refusal to approve candidates

Chapter 5. Procedure for submission, review of candidates'
documents and their approval by the NBKR

Chapter 6. Final provisions

Appendix 1. Questionnaire

Appendix 2.

Appendix 3.

Chapter 1

General provisions

1.1. This instruction has been developed in accordance with the Law "On
banks and banking activity in the Kyrgyz Republic" and establishes requirements for officials of commercial banks, branches of a non-resident bank, the Kyrgyz Agricultural Finance Corporation, the Finance Company for Support and Development of Credit Unions, (hereinafter bank and FCU).

1.2. Officials are: the chairman and members of the board of di-
rectors, the chairman of the management board (head of a branch of a non-resi- dent bank), his deputies, members of the management board, the chairman of the audit committee, the chief accountant, heads of main structural subdivisions (credit, currency departments (departments), treasury and equated to them structural subdivisions of the bank), heads of branches, as well as other persons who determine the policy of the bank or have the authority to participate or actually participate in the main operations of the bank, forming the policy of the bank, regardless of whether these per- sons work on a gratuitous basis or receive remuneration. This definition also applies to officials of a company whose subsidiary is a bank and FCU.

1.3. Officials, as well as the head of the internal audit service,
must meet the minimum requirements and undergo mandatory approval in accordance with Chapter 5 of this instruction.

1.4. During the approval period, officials and the head of the internal audit service perform their duties under a fixed-term employment con-
tract.

1.5. In case of refusal by the National Bank of the Kyrgyz Republic
(hereinafter - NBKR) to approve him, the official and the head of the internal audit service shall be relieved of duties for the position held within no more than two weeks from the moment of receipt of the NBKR letter.

1.6. In case of dismissal of officials who have the right of first and
second signature, as well as the head of the internal audit service, the bank, FCU must, within one working day from the moment of adoption of the decision, notify the Supervision Methodology and Licensing Department (SMLD)/Non-Bank Institutions Supervision Department (NISD), indicating the reasons for dismissal.

Chapter 2

Requirements for members of the Board of Directors of a bank and FCU and the Chairman of the Audit Committee

2.1. Candidates for the positions of chairman and members of the board of di-
rectors, chairman of the audit committee must meet the following mini- mum requirements:

1) have a diploma of higher education;

2) have knowledge in the field of banking legislation, corporate
governance and main regulatory documents of the NBKR;

3) have experience in managerial positions (not lower than the position
of head of a department) preferably in the banking, financial system or in positions related to economic (financial) activity (for example, supervision of the economic block in a state institution, or work as a head of an enterprise or financial manager, representatives of economic scientific circles), not less than one year;

4) know the business plan of the bank, FCU and its development strategy.

2.2. A candidate for the position of chairman of the Audit Committee, in addition to the requirements set out in paragraph 2.1 of Chapter 2, must possess
knowledge of international accounting standards and auditing standards accepted in international practice and have a certificate of completion of training in these areas.

2.3. At least one member of the board of directors must be a specialist
expert (not a shareholder or founder) meeting the requirements for members of the management board of the bank set out in this in- struction.

2.4. In case of election of a member of the board of directors in accordance
with paragraph 7 of Article 24 of the Law of the Kyrgyz Republic "On Banks and Banking Activity in the Kyrgyz Republic", the candidacy of the new member of the board of directors is subject to approval in accordance with Chapter 5 of this instruction.

2.5. Election of the chairman and members of the board of directors, as well as
appointment of the chairman of the audit committee must be carried out taking into account the requirements of Articles 24, 26 of the Law of the Kyrgyz Republic "On Banks and Banking Activity in the Kyrgyz Republic".

Chapter 3

Requirements for members of the Management Board, heads of branches and main structural subdivisions, as well as heads of the internal audit service of a bank and FCU

3.1. Candidates for the positions of chairman of the management board (head
of a branch of a non-resident bank), his deputies, members of the management board, chief accountant, head of the internal audit service, heads of main structural subdivisions (credit, currency departments (departments), treasury and equated to them structural subdivi- sions of the bank and FCU), heads of a branch must satisfy the follow- ing minimum suitability requirements:

1) have a diploma of higher education;

2) have the following work experience for a candidate for the position:

a) chairman of the management board of a bank, FCU (head of a branch of a non-resident bank) - not less than five years in the banking and/or financial sys- tem, including in managerial positions not less than three years ((1) see note);

b) members of the executive body - not less than three years in the banking system or financial system, including in a managerial position not less than one year;

c) head of the internal audit service and chief accountant - not less than three years in the banking or financial system;

d) head of a branch - not less than three years in the banking system;

e) heads of main subdivisions of a bank, FCU - at least one year in the banking system;

3) have knowledge in the field of legislation of the Kyrgyz Republic
regulating banking activity, in the field of banking risk management and in the area where they intend to work, as well as regulatory acts of the NBKR;

4) know the business plan of the bank and FCU and its development strategy.

3.2. Candidates for the position of chief accountant and head of the
internal audit service, in addition to the requirements set out in paragraph 3.1 of Chapter 3, must possess:

1) chief accountant - knowledge of international accounting standards,
confirmed by relevant certificates;

2) head of the internal audit service - knowledge of the legislation
of the Kyrgyz Republic on auditing, international accounting standards and internal auditing standards accepted in international practice and confirmed by relevant certificates.

3.3. A person who is entrusted with the performance of duties of the positions
specified in paragraph 3.1 of this instruction, as well as the head of the internal audit service for a period of more than two months, is subject to approval in accordance with Chapter 5 of this instruction.

3.4. The powers of persons appointed to the positions of chairman of the management
board and chief accountant are not recognized by the NBKR until the candidate has fully passed all stages of the approval procedure. At the same time, the right of first signature may be delegated to a person who has passed the approval procedure for the positions of deputy chairman or member of the management board.

Chapter 4

Grounds for refusal to approve candidates

4.1. The National Bank must refuse approval of officials
and the head of the internal audit service if:

1) a court decision or conviction has been issued against them prohibiting them from working in the financial and credit system;

2) they previously were: chief accountant, head of the internal
audit service, heads of main structural subdivisions (credit, currency departments (departments), treasury), head of a branch, chairman of the management board, members of the management board, chairman of the board of directors, members of the board of directors, chairman of the revision commission, chairman of the audit committee of a bank, FCU and their actions (inaction), confirmed by facts, led to the revocation of the bank's license.

4.2. The National Bank also has the right to refuse approval of officials
and the head of the internal audit service if:

1) there is a conclusion, decision or other acts of the
NBKR (decision of the Supervisory Committee, instructions) recognizing them as:

a) involved in actions (inaction) as a result of which the bank, FCU had its license revoked;

b) involved in actions classified as unsound banking practice;

c) having committed violations of legislation regulating banking activity, including regulatory acts of the NBKR;

2) there is confirmed written information indicating
negative business reputation ((2) see note) of the candidate;

3) there are facts concerning them, including materials of inspections
conducted by any state or regulatory body regarding candidates, indicating his responsibility for the occurrence of financial or administrative problems at previous places of work.

4.3. Approval by the NBKR of candidates against whom a criminal case has been initiated is suspended from the moment information about this is received.

4.4. In case of provision of any unreliable incomplete information
or deliberate distortion or omission of information by the candidate, the NBKR has the right to refuse to consider the documents and his approval.

4.5. The National Bank has the right to demand removal from office
of an official or the head of the internal audit service upon detection subsequently, after approval of the candidacy, of the grounds specified in paragraph 4.1, 4.2 of this instruction.

Chapter 5

Procedure for submission, review of candidates' documents and their approval by the NBKR

Submission of documents

5.1. The bank and FCU must, within three working days from the moment of election/appointment of candidates, submit to the SMLD/NISD a notification of changes in the composition of officials.

Within ten working days, and in case of election/appointment of a non-resident - within 30 calendar days from the moment of election/appointment of candidates, the bank must submit to the SMLD/NISD a letter on changes in the composition and approval of a new candidacy of an official and/or head of the internal audit service with the attachment of the following documents:

1) a certified copy of the minutes of the meeting of the authorized management body that adopted the decision on the election of the candidacy or on release from duties;

2) a certified copy of the order on appointment as acting.
Subsequently, when approving the candidate with the NBKR, the bank submits a copy of the order on his appointment;

3) a questionnaire in the established form ((3) see note) (Appendix
1) with the attachment of at least two recommendations;

4) a card with specimen signatures of the Chairman of the Board of Directors
of the bank, his deputy, a card with specimen signatures of the heads of the executive body, chief accountant certified by a notary;

5) a list of functional duties of the candidacy.

5.2. When changing the head of the executive body and/or chief
accountant, the bank and FCU must submit to the SMLD/NISD a new card with specimen signatures certified by a notary.

5.3. When information contained in the paragraphs of the questionnaire submitted to the NBKR changes, officials who have passed approval with the NBKR
are obliged to notify the NBKR in writing within ten days after the changes.

5.4. Recommendations are provided by at least two persons. The recommendation must indicate the full name, place of work, position, telephone, fax, email address and address of the recommender. At the same time, it is not allowed to provide recommendations:

1) from NBKR employees;

2) from any relatives;

3) from heads and employees of the bank applying for approval of the candidacy.

5.5. The recommendation must reflect the following points:

1) business reputation of the candidate;

2) moral qualities;

3) information indicating where and when they worked together, or
were connected by work with the recommended person, from what time he has known the candidate;

4) other information that the recommender considers important.

5.6. Recommenders can only be persons working in the banking or financial sector.

5.7. The authenticity of the signature of the recommender must be certified at his place of work or by a notary.

5.8. If necessary, the SMLD (NISD) may request from the applicant
bank and FCU, the candidate or third parties additional information if it considers that the submitted information is insufficient for making a decision.

5.9. Documents submitted in a foreign language must be translated into the official and/or state language of the Kyrgyz Republic and legalized in the established procedure.

Procedure for reviewing documents

5.10. Incoming documents for candidates are reviewed in the OLB
SMLD and in the NISD for completeness, reliability of filling out questionnaires and compliance of candidates with established requirements.

5.11. In case of non-compliance of documents with established requirements
and provision of an incomplete package of documents, they are returned for revision. In case of provision of documents that do not meet the requirements of this instruction or not in full more than three times, the candidate's documents may not be accepted for consideration by the NBKR.

5.12. Based on the results of reviewing documents and processing information available in the NBKR about the candidate, within one month from the moment of receipt of documents, the SMLD/NISD prepares a written conclusion on his compliance with the requirements for officials of banks and FCU with the attachment of all documents submitted by the candidate and the possibility of approval.

5.13. Within three days the conclusion is submitted for consideration:

1) to the Supervisory Committee of the NBKR for the positions of chairman of the audit committee, chairman of the management board of the bank, his first deputy (if any) or deputy responsible for credit policy, head of the internal audit service, chief accountant.

Also, for consideration by the Supervisory Committee, a conclusion is submitted for the positions of chairman of the board of directors, members of the board of directors in case of objections to these candidacies.

2) to the Head of the SMLD (NISD) for the positions of members of the Board of Directors, members of the executive body, heads of branches, main structural subdivisions.

5.14. The Supervisory Committee and/or the Head of the SMLD (NISD) has the right to invite candidates for an interview.

5.15. The results of the consideration of the candidacy, within three working
days from the moment of adoption of the decision in writing (Appendix 2, 3) are communicated to the bank, FCU.

5.16. When considering candidacies, information obtained during inspection audits, as well as audits conducted by any state or regulatory body regarding candidates, is taken into account.

Chapter 6

Final provisions

6.1. Taking into account that in some cases qualitative indicators may prevail over formal ones, candidates for the positions of: chairman and members of the Board of Directors, chairman of the Audit Committee, chairman of the management board, his deputies, members of the management board and chief accountant may be admitted to the approval procedure with the National Bank of the Kyrgyz Republic with the permission of the Deputy Chairman supervising banking supervision.

6.2. In case of disagreement with the decisions adopted by the Head of the SMLD (NISD), the candidate has the right, within ten working days from the moment of adoption of the decision, to appeal it to the Deputy Chairman of the NBKR supervising the SMLD and NISD. In case of disagreement with the decision of the Supervisory Committee, the decision may be appealed to the Chairman of the NBKR.

Appendix 1

QUESTIONNAIRE

1. Full name ______

2. Underline in connection with what the questionnaire is being filled out:

1) election to the position of chairman of the board of directors; 2) election
to the position of member of the board of directors; 3) appointment to the position of chairman of the audit committee; 4) appointment to the position of chairman of the management board; 5) appointment to the position of head of a branch of a non-resident bank; 6) appointment to the position of deputy chairman of the management board; 7) appointment to the position of deputy head of a branch of a non-resident bank; 8) appointment to the position of member of the management board; 9) appointment to the position of head of a structural subdivision; 10) appointment to the position of head of the internal audit service; 11) founder of the bank;
12) main shareholder; 13) acquisition of a controlling block of shares of the bank.

3. Indicate the proposed position in the bank: ______

---

(position, name of bank, financial and credit institution)

4. If you changed your surname, indicate when and for what reason ______

---

5. Date and place of birth ______

6. Passport series ______ number ______

issued by ______ date of issue ______

7. Citizenship ______

Indicate how it was obtained: at place of birth, after marriage, under other circumstances - provide explanation ______

---

8. Home address (according to documents), tel. no. ______

Actual place of residence ______

9. Information on the candidate's knowledge in the field of:

• banking legislation ______

• financial reporting and accounting ______

• procedure for preparing bank reports ______

• credit activity ______

• investment activity ______

• strategic planning ______

• banking risk management ______

• liquidity management ______

10. Main place of work, position, before applying for the position to be approved ______

11. Office address, tel. no., fax, email ______

12. Education ______

---

(higher, incomplete higher, secondary specialized, secondary)

---

Name of educational	Faculty or	Year of admission	Specialty
institution and its	department	and graduation	according to the received
location			diploma
-----------------	-------------	---------------	---------------------

---

Training at courses conducted by various educational centers (advanced training courses) ______

---

| Topic of seminar | Organizer | Place | Date | Availability |

or course	of seminar	of completion	of completion	of certificate

---

13. Work performed since the beginning of employment ______

---

---

Date	Date	Position	Name of institution,	Reason for leaving
of admission	of departure	held	location, full name
to work			of employer
-----------	-------	----------	-----------------------	--------------

---

(*) If there is a work book, paragraph 13 does not require filling out, attach a copy of it, indicating the full name of each employer (manager).

14. Military service.

---

| Troops in which | Time of service | Rank | Date and reason for leaving |

served, location

---

15(*). Recommendations (at least two) provided by:

15.1. Full name ______

15.2. Position and place of work ______

15.3. Home address, tel. no., fax, email ______

16(*). Indicate institutions in any country in which you were and/or are an owner, shareholder, manager (including a bank in whose management you are elected or appointed) during the last 10 years:

---

Name of	Type	Number	Amount in	Share in the charter
legal entity,	of activity	of shares	soms	capital of the given
location	of enterprise			enterprise in %
	(institution)
----------------	--------------	----------	---------	----------------

---

17(*). If you are a shareholder of an institution providing financial services, provide detailed information: what exactly financial services the institution provides, since when it has been operating, who is the manager ______

18. Indicate whether in relation to you or in relation to an organization
    (company) with which you were connected as a shareholder owning five or more percent of shares and/or a member of the Board of Directors or any other official ever, in any country:

• charges of offenses were brought (yes/no) ______

• disciplinary sanctions were applied (yes/no) ______

If yes, provide a detailed description of the charge, conviction by a law enforcement body indicating the name of the law enforcement

body, charge or disciplinary sanction applied by any state body, results of proceedings, court decision: _____

---

19(*). Do you or any of the institutions specified in item 16 have business relations with the bank in which you are applying for the position? If yes, provide detailed explanations ______

---

20. Indicate whether there is an outstanding criminal record. If yes, provide an explanation ______

Indicate whether a decision has been taken in respect of you prohibiting the pursuit of any professional activity. If yes, provide an explanation ______

21. a) Have you or an institution with which you were connected as a director (manager), head, founder, shareholder ever applied for a license or other permission to conduct business in any country? If yes, indicate what type of activity you intended to engage in and in which country ______

b) Were you, or an organization with which you are connected as a director, shareholder, refused the granting of a license (permission), or was it revoked from you by the licensing body? If yes, give an explanation as to why it was refused, the license was not issued or was revoked _____

---

22. Indicate each enterprise recognized as bankrupt by compulsory procedure or in the process of compulsory liquidation, with which you were connected as a head (manager), official (member of the Board of Directors, deputy head, chief accountant/financial manager) or principal shareholder (over 5% or more) __

---

Give a detailed justification of your role and sphere of responsibility as a director, official or controlling shareholder in the institution with which you were connected and which was placed in conditions connected with compulsory bankruptcy or liquidation ______

---

23. Has an investigation been conducted in respect of you or an organization with which you were connected as a director (manager), head, shareholder or responsible person by state or regulatory bodies. If yes, give an explanation for what reason ______

---

24(*). If there is loan indebtedness (other obligations) to anyone, indicate the following information for each indebtedness (obligation):

---

Name of creditor	Date of issue	Loan amount, in thousand som	Interest rate	Purpose of loan

---

---

Description and amount of collateral	Payment terms	Outstanding indebtedness on loan, in thousand som	Outstanding indebtedness on %, in thousand som	Overdue indebtedness (principal amount, %)

---

25. Were there cases when you were unable to repay indebtedness to any institution on a personal loan, as well as on a loan for which you acted as guarantor. If yes, give explanations ______

---

26. Are you currently participating in any court proceedings. If yes, give an explanation ______

---

27(*). Provide the following information:

1. Personal report on assets and liabilities as of "___"

---

Table 1

---

	Assets	Amount (in som/for foreign founders in USD)
1	Cash
--	------	------
2	Deposit funds in financial and credit institutions
--	------	------
3	Investments in companies (Table 2)
--	------	------
4	Securities
--	------	------
5	Real estate, of which pledged or under arrest
--	------	------
6	Accounts receivable (including funds provided as loans)
--	------	------
7	Other assets
--	------	------
	Total assets
--	------	------
	Liabilities
--	------	------
1	Loan indebtedness
--	------	------
2	Accounts payable
--	------	------
3	Other liabilities
--	------	------
	Total liabilities
--	------	------
	Net worth (assets minus liabilities)
--	------	------
	Personal guarantees issued

---

2.

Table 2

---

Name, address of enterprise in which funds were invested	Form of enterprise	Share of ownership (in %)	Sphere of activity of enterprise	When funds were invested	At what price shares were acquired
--------------	-----------	--------	------------	--------	-----------

---

Total:

3.

Table 3

---

	Sources of income	Previous year 200__	Current year (expected amount) 200__
1	Wages at main place of work (including bonuses)
-	------	------	------
2	Wages not at main place of work, including author's remuneration, other payments
-	------	------	------
3	Dividends
-	------	------	------
4	Interest
-	------	------	------
5	Other income from real estate
-	------	------	------
6	Other income
-	------	------	------
	Total
-	------	------	------
	Expenses
-	------	------	------
1	Expenses (personal, for consumption)
-	------	------	------
2	Loan payments principal amount interest
-	------	------	------
3	Other expenses
-	------	------	------
	Total expenses
-	------	------	------
	Net income (expense)

---

28. Marital status ______

List close relatives over 16 years of age (parents, children, spouse, brothers, sisters):

---

Full name	Relationship	Date and place of birth	Passport data	Position and place of work	Home address, telephone number

---

29. Provide complete information about what interests, apart from share ownership, connect you with the bank for a position in which you are applying ((4) see note). Any other information which you consider important for consideration during approval for the position should also be indicated ______

I, ______,
Surname, name, patronymic

confirm that the information presented above in the questionnaire is reliable and complete and is provided in accordance with my knowledge and information on the questions indicated in the questionnaire. I acknowledge that in the event of deliberate distortions and omissions on my part, this may serve as grounds for refusal of approval for the recommended position and entail liability in accordance with legislation.

______ "____" ______ _____ year

signature date

(*) Officials - representatives of international financial organizations determined in accordance with the Law of the Kyrgyz Republic "On Membership of the Kyrgyz Republic in International Financial Organizations" instead of items 15, 16, 17, 19, 24, 27 of the questionnaire provide a copy of the decision on their appointment as an official to the bank on behalf of the international financial organization with indication of the official coordinates of the head of the appointed person.

Appendix 2

Commercial bank

FCU

---

Dear ______,

By this, the Supervision Methodology and Licensing Department brings to your attention the decision of the Supervision Committee of the National Bank of the Kyrgyz Republic regarding the candidacy of ______

for the position of ______

According to the Resolution of the Supervision Committee of the National Bank of the Kyrgyz Republic No. ______ dated ______ (date) "On the candidacy of ______ (full name) for the position of ______"

on the basis of the documents and recommendations submitted by ______ (full name)

a decision was taken of no objection (objection) against the appointment of the above-mentioned candidacy to the position of ______

Head of SMLD ______

Appendix 3

Commercial bank

FCU

---

Dear ______,

The Supervision Methodology and Licensing Department/Non-banking Institutions Supervision Division, having considered the candidacy ______ (full name) for the position of ______ submitted by bank ______

reports that on the basis of the documents and recommendations submitted by ______ (full name)

it does not object (objects) against the appointment of the above-mentioned candidacy to the position of ______

---

(name of position)

Head of SMLD/NSD ______

Notes:

(1) For the purposes of this provision, a managerial position means a position not lower than the head of a structural subdivision carrying out banking, financial and/or economic activity within a financial and credit institution.

(2) Business reputation is an assessment of the professional and socially significant qualities of a person, allowing a conclusion to be made about his professional and managerial abilities, compliance with ethical norms and conformity of his activity with the requirements of legislation.

(3) The questionnaire in the established form according to Appendix 1 is also provided by the founders of the bank and principal shareholders of the bank, as well as persons acquiring a controlling block of shares of the bank. At the same time, the said persons are not required to provide recommendations.

(4) Here it is necessary to indicate existing family ties with employees of the bank and members of the Board of Directors.