RESOLUTION OF BOARD OF NATIONAL BANK OF THE KYRGYZ REPUBLIC

of May 31, 2017 No. 21/12

About approval of the Provision "About requirements to transactions with the affiliated and tied with bank faces when implementing Ekoislamikbank Ltd of transactions according to the Islamic principles of banking and financing"

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 Provision "About requirements to transactions with the affiliated and tied with bank faces when implementing Ekoislamikbank Ltd of transactions according to the Islamic principles of banking and financing" it (is applied).

2. Declare invalid the Resolution of Board of National Bank of the Kyrgyz Republic "About the Provision "About requirements to transactions with insiders and affiliates when implementing JSC Ekobank of transactions according to the Islamic principles of financing" of February 2, 2007 No. 6/2.

3. 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.

4. This Resolution becomes effective on June 22, 2017.

5. To management of methodology of supervision and licensing to bring this Resolution to the attention of Ekoislamikbank Ltd, 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.

Regulations on requirements to transactions with the affiliated and tied with bank faces when implementing Ekoislamikbank Ltd of transactions according to the Islamic principles of banking and financing

1. General provisions

1. This Provision is developed within realization of pilot project on implementation of the Islamic principles of financing in the Kyrgyz Republic.

2. The purpose of this provision is establishment of requirements to transactions with the affiliated and tied with bank faces when implementing activities according to the Islamic principles of banking and financing in Ekoislamikbank Ltd (further - bank).

3. 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 faces tied with bank, 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 bank the security system ensuring safety of information is installed.

4. 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.

2. Procedure of transactions and transactions

5. The bank has no right to perform transactions with the affiliated or tied with bank faces if any of the listed below conditions takes place:

1) the maximum extent of risk on the client/supplier connected with bank (the standard rate of K1.2), exceeds 15% of the net total capital (further - ChSK) bank;

2) the bank does not conform to the requirements for sufficiency (adequacy) of the capital and own (regulating) capital established by National Bank;

3) the bank has losses on the last reporting date in the current financial year;

4) the total amount of all assets provided to all to the affiliated and/or tied with bank faces exceeds 60% of ChSK of bank.

6. When implementing transactions with the affiliated or tied with bank faces, the bank is recommended to establish more tough, than the established by National Bank, internal limits of restriction on transactions with assets.

7. If the bank participates own means in commercial or other non-bank organizations, the maximum amount of such investments, including any financial investments and assets bringing any kinds of risks to each non-bank organization shall not exceed 15% of the size of own (regulating) capital of bank. The general amount of such investments cannot exceed 60% of own (regulating) capital of bank.

8. Transactions of bank with the faces tied with bank in the amount exceeding 1% of ChSK are transactions with interest. The decision on the conclusion of the transaction with interest, and other banking activities performed with affiliated and connected persons whose size constitutes from 1% to 14% of ChSK is accepted only by uninterested board members of bank. At the same time, in the protocol of the solution of the Board of directors interest or disinterest of board members shall be specified.

9. The decision on the assets bearing in themselves credit risk with affiliated and connected persons whose size constitutes from one settlement indicator to 14% of ChSK is accepted only by uninterested board members of bank. At the same time, in the protocol of the solution of the Board of directors interest or disinterest of board members shall be specified.

10. The decision on the conclusion of the transaction with interest, and other banking activities, including provision of the asset bearing in itself credit risk, performed with affiliated and connected persons whose size constitutes more than 14% of ChSK are accepted by general shareholder meeting.

At the same time such transactions and transactions, except the signed public agreements, shall be approved by the Board of directors of bank.

11. Any transaction or the transaction of bank with any person shall be considered as transaction or the transaction with the affiliated or tied with bank face even if part of the income on transaction or the transaction are used for benefit of the affiliated or tied with bank face or is transferred to their order.

12. The bank has the right to perform operations or transactions with the affiliated or tied with bank face only in case of accomplishment of all following conditions:

1) Transactions, except specified in Item 14 of this provision, and transactions can be carried out only on such conditions and requirements which are not more preferential in comparison with the conditions and requirements applied in the same time to similar transactions and transactions between this bank and other persons who do not fall under these regulations and are not the affiliated or tied with bank faces of bank. Such conditions and requirements include, in particular, non-admission:

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