RESOLUTION OF BOARD OF NATIONAL BANK OF THE KYRGYZ REPUBLIC

of May 31, 2017 No. 21/5

About approval of the Instruction "About requirements to transactions of bank with the affiliated and tied with bank faces"

According to articles 7 and 43 of the Law "About National Bank of the Kyrgyz Republic" Board of National Bank of the Kyrgyz Republic decides:

1. Approve the Instruction "About requirements to transactions of bank with the affiliated and tied with bank faces" it (is applied).

2. Recognize invalid:

- the resolution of Board of National Bank of the Kyrgyz Republic "About requirements to transactions with insiders and affiliates of the commercial banks and other financial credit institutes licensed by NBKR" of December 10, 2003 No. 34/10;

- Item 6 of the resolution of Board of National Bank of the Kyrgyz Republic "About new edition of the Instruction "About crediting restrictions" of September 15, 2004 No. 24/4;

- the Section II of the changes and amendments in some regulations of National Bank of the Kyrgyz Republic approved by the resolution of Board of National Bank of the Kyrgyz Republic "About some regulatory legal acts of National Bank of the Kyrgyz Republic" of August 25, 2005 No. 26/5;

- the resolution of Board of National Bank of the Kyrgyz Republic "About modification and amendments in the resolution of Board of National Bank of the Kyrgyz Republic "About requirements to transactions with insiders and affiliates of the commercial banks and other financial credit institutes licensed by NBKR" of December 10, 2003 No. 34/10 "of September 25, 2007 No. 43/4;

- Item 3 of the resolution of Board of National Bank of the Kyrgyz Republic "About modification and amendments in some regulatory legal acts of National Bank of the Kyrgyz Republic" of June 10, 2009 No. 26/2 and Item 3 appendices to the specified resolution;

- the resolution of Board of National Bank of the Kyrgyz Republic "About modification and amendments in the resolution of Board of National Bank of the Kyrgyz Republic "About requirements to transactions with insiders and affiliates of the commercial banks and other financial credit institutes licensed by NBKR" of December 10, 2003 No. 34/10, registered in the Ministry of Justice of the Kyrgyz Republic on January 5, 2004, registration number 2-04" of November 25, 2009 No. 47/4;

- Item 12 of Appendix to the resolution of Board of National Bank of the Kyrgyz Republic "About modification and amendments in some regulatory legal acts of National Bank of the Kyrgyz Republic" of November 16, 2012 No. 43/1;

- in the resolution of Board of National Bank of the Kyrgyz Republic "About modification and amendments in some regulatory legal acts of National Bank of the Kyrgyz Republic" of April 24, 2013 No. 13/9:

paragraph one of Item 1 of the resolution;

Item of 1 changes and amendments in some regulatory legal acts of National Bank of the Kyrgyz Republic approved by the above-stated resolution;

- in the resolution of Board of National Bank of the Kyrgyz Republic "About modification and amendments in some resolutions of Board of National Bank of the Kyrgyz Republic" of February 10, 2016 No. 7/2:

paragraph of the twenty second of Item 1 of the resolution;

Item 21 of Appendix to the above-stated resolution.

3. This resolution becomes effective on June 22, 2017.

4. To legal management:

- publish this resolution on the official site of National Bank of the Kyrgyz Republic;

- after official publication to send this resolution to the Ministry of Justice of the Kyrgyz Republic for entering into the State register of regulatory legal acts of the Kyrgyz Republic.

5. To management of methodology of supervision and licensing to bring this resolution to the attention of commercial banks, National bank of development of the Kyrgyz Republic, OYuL "Union of Banks of Kyrgyzstan", regional managements and representative office of National Bank of the Kyrgyz Republic in Batken Province.

6. To impose control of execution of this resolution on the board member of National Bank of the Kyrgyz Republic Dzhusupova T.Dzh.

Appendix

to the Resolution of Board of National Bank of the Kyrgyz Republic of May 31, 2017 No. 21/5

The instruction about requirements to transactions of bank with the affiliated and tied with bank faces

1. General provisions

1. This Instruction is developed for the purpose of establishment of requirements to activities of the banks including performing activities according to the Islamic principles of banking and financing, the banks having Islamic window, and JSC Finance Company of Credit Unions (further - bank) when implementing transactions and transactions with the affiliated and tied with bank faces.

At the same time this Instruction extends to JSC Finance Company of Credit Unions taking into account features and in the part which is not contradicting the requirements specified in Regulations of activities of JSC Finance Company of Credit Unions.

2. The bank shall keep the register of the affiliated and tied with bank faces, easy access to which shall be provided for employees of National Bank of the Kyrgyz Republic (further - National Bank). The register of the affiliated and tied with bank faces, at least, shall contain data on the surname, name, middle name of the official of bank held by it position in bank, surname, name and middle name of the related person who is the close relative, degree of his relationship with the official (parents, the spouse (a), etc.). Maintaining the register in electronic form is allowed provided that in banks the security system ensuring safety of information is installed.

The bank from 100% the state share within maintaining the register of the affiliated and tied with bank faces has the right not to include in the register of the persons which are not exercising control over bank and not influencing their activities.

At the same time the bank from 100% the state share includes in the register without fail persons the affiliated and connected with bank, specified in Items 4, 5 and 6 parts 1 of article 52 of the Law of the Kyrgyz Republic "About banks and banking activity" under following conditions:

- in case of issue to the affiliated and tied with bank faces of the credits and credit substitutes;

- in case of the conclusion of the transactions bearing in themselves credit risk with the affiliated and tied with bank faces.

3. The relations of person, affiliated with bank, can be traced on communications of the companies and persons, the relations between which are based on ownership of threshold equity participation of bank, regardless of the number of affiliates.

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