RESOLUTION OF BOARD OF NATIONAL BANK OF THE REPUBLIC OF KAZAKHSTAN

of February 26, 2018 No. 41

About approval of Rules of reference of the assets provided by banks to the affiliated organizations on acquisition of doubtful and bad assets of parent bank to category doubtful and hopeless, and also forming of provisions (reserves) against the assets provided by parent banks to the affiliated organizations

According to the Code of the Republic of Kazakhstan of December 25, 2017 "About taxes and other obligatory payments in the budget" the Board of National Bank of the Republic of Kazakhstan DECIDES: (Tax code)

1. Approve the enclosed Rules of reference of the assets provided by banks to the affiliated organizations on acquisition of doubtful and bad assets of parent bank to category doubtful and hopeless, and also forming of provisions (reserves) against the assets provided by parent banks to the affiliated organizations.

2. Recognize invalid:

1) the resolution of Board of National Bank of the Republic of Kazakhstan of February 24, 2012 No. 96 "About approval of Rules of reference of the assets provided by banks to the affiliated organizations on acquisition of rights of requirements for the credits (loans) recognized as doubtful and bad assets to category doubtful and hopeless and also forming of provisions (reserves) against the assets provided by parent banks to the affiliated organizations" (it is registered in the Register of state registration of regulatory legal acts at No. 7623, it is published on July 18, 2012 in the Kazakhstanskaya Pravda newspaper No. 229-230 (27048-27049);

2) Item 10 of the List of regulatory legal acts of the Republic of Kazakhstan concerning banking regulation to which changes and additions are made the Board of National Bank of the Republic of Kazakhstan approved by the resolution of February 25, 2013 No. 74 "About modification and amendments in some regulatory legal acts concerning banking regulation" (it is registered in the Register of state registration of regulatory legal acts at No. 8436, it is published on June 12, 2013 in the Yuridicheskaya Gazeta newspaper No. 85 (2460).

3. To department of methodology of the financial market (Abdrakhmanov N. A.) in the procedure established by the legislation of the Republic of Kazakhstan to provide:

1) together with Legal department (Sarsenov N. V.) state registration of this resolution in the Ministry of Justice of the Republic of Kazakhstan;

2) within ten calendar days from the date of state registration of this resolution the direction it the copy in paper and electronic type in the Kazakh and Russian languages in the Republican state company on the right of economic maintaining "The republican center of legal information" for official publication and inclusion in Reference control bank of regulatory legal acts of the Republic of Kazakhstan;

3) placement of this resolution on official Internet resource of National Bank of the Republic of Kazakhstan after its official publication;

4) within ten working days after state registration of this resolution submission to Legal department of data on execution of the actions provided by subitems 2), 3) of this Item and item 4 of this resolution.

4. To management on consumer protection of financial services and external communications (Terentyev A. L.) provide within ten calendar days after state registration of this resolution the direction it to the copy on official publication in periodic printing editions.

5. To impose control of execution of this resolution on the vice-chairman of National Bank of the Republic of Kazakhstan Smolyakov O. A.

6. This resolution becomes effective after ten calendar days after day of its first official publication.

Approved by the Resolution of Board of National Bank of the Republic of Kazakhstan of February 26, 2018 No. 41

Rules of reference of the assets provided by banks to the affiliated organizations on acquisition of doubtful and bad assets of parent bank to category doubtful and hopeless, and also forming of provisions (reserves) against the assets provided by parent banks to the affiliated organizations

1. These rules of reference of the assets provided by banks to the affiliated organizations on acquisition of doubtful and bad assets of parent bank to category doubtful and hopeless, and also forming of provisions (reserves) against the assets provided by parent banks to the affiliated organizations (further - Rules), are developed according to the Code of the Republic of Kazakhstan of December 25, 2017 "About taxes and other obligatory payments in the budget" (Tax code) and establish procedure for reference of the assets provided by banks to the affiliated organizations on acquisition of doubtful and bad assets of parent bank to category doubtful and hopeless, and also forming of provisions (reserves) against the assets provided by parent banks to the affiliated organizations.

2. Banks refer to category of doubtful assets the assets provided to the affiliated organizations on acquisition of doubtful and bad assets of parent bank on which provisions (reserves) according to International Financial Reporting Standards and requirements of the legislation of the Republic of Kazakhstan about financial accounting and the financial reporting are created.

Banks refer to category of bad assets the assets provided to the affiliated organizations on acquisition of doubtful and bad assets of parent bank with one of the following criteria:

overdue debt availability on principal debt and (or) remuneration over 90 (ninety) calendar days;

the size of the created provisions (reserves) constitutes at least 50 (fifty) percent from the amount of outstanding principal debt;

the size of requirements is reduced in financial accounting according to International Financial Reporting Standards and requirements of the legislation of the Republic of Kazakhstan about financial accounting and the financial reporting in the absence of the complete or partial cessation of the right of such requirement according to the legislation of the Republic of Kazakhstan.

3. Forming of provisions (reserves) against the assets provided by parent banks to the affiliated organizations acquiring doubtful and bad assets of parent bank is performed according to Rules of creation of provisions (reserves) according to the International Financial Reporting Standards and requirements of the legislation of the Republic of Kazakhstan about financial accounting and the financial reporting approved by the resolution of Board of National Bank of the Republic of Kazakhstan of December 22, 2017 No. 269, registered in the Register of state registration of regulatory legal acts at No. 16502.

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