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The document ceased to be valid since  June 22, 2017 according to Item 2 of the Resolution of Board of National Bank of the Kyrgyz Republic of  June 8, 2017 No. 2017-P-12/23-1-(NPA)

It is registered

Ministry of Justice

Kyrgyz Republic

On April 7, 2006 No. 34-06

RESOLUTION OF BOARD OF NATIONAL BANK OF THE KYRGYZ REPUBLIC

of March 2, 2006 No. 5/7

(as amended on 21-12-2016)

About approval of the Regulations on licensing of activities of banks

Having considered the project of the Regulations on licensing of activities of banks, the Board of National Bank of the Kyrgyz Republic decides:

1. Approve Regulations on licensing of activities of banks it (is applied).

2. To management of methodology of supervision and licensing together with Legal department to carry out in accordance with the established procedure state registration of this resolution in the Ministry of Justice of the Kyrgyz Republic.

3. Enact this resolution after state registration in the Ministry of Justice of the Kyrgyz Republic and the subsequent official publication.

4. From the moment of enforcement of this resolution to declare invalid:

- Item 1 of the resolution of Board of National Bank of the Kyrgyz Republic No. 19/2 of August 12, 1998. "About procedure for creation of banks and feature of their activities in the territory of the Kyrgyz Republic", registration number 3 of the Ministry of Justice of the Kyrgyz Republic of August 26, 1998;

- Item 1 of the resolution of Board of National Bank of the Kyrgyz Republic No. 4/5 of January 22, 1999 "About modification and amendments in some regulating documents NBKR" in the part concerning the Provision "About Procedure for Creation of Banks and Feature of Their Activities in the territory of the Kyrgyz Republic", approved by the resolution of Board of NBKR No. 19/2 of August 12, 1998, registration number 11 of the Ministry of Justice of the Kyrgyz Republic of February 1, 1999;

- Item 1 of the resolution of Board of National Bank of the Kyrgyz Republic No. 31/9 of April 15, 1999 "About modification and amendments in some regulating documents of National Bank of the Kyrgyz Republic" in the part concerning the Provision "About Procedure for Creation of Banks and Feature of Their Activities in the territory of the Kyrgyz Republic", approved by the resolution of Board of NBKR No. 19/2 of August 12, 1998, registration number 41 of the Ministry of Justice of the Kyrgyz Republic of May 15, 1999;

- the resolution of Board of National Bank of the Kyrgyz Republic No. 18/6 of April 29, 2000. "About modification and amendments in Regulations on creation of banks and features of their activities in the territory of the Kyrgyz Republic", registration number 86 of the Ministry of Justice of the Kyrgyz Republic of May 12, 2000;

- the resolution of Board of National Bank of the Kyrgyz Republic No. 42/3 of November 30, 2000 "About modification and amendments in Regulations on procedure for creation of banks and feature of their activities in the territory of the Kyrgyz Republic", registration number 199 of the Ministry of Justice of the Kyrgyz Republic of December 15, 2000;

- the resolution of Board of National Bank of the Kyrgyz Republic No. 1/4 of January 24, 2001 "About modification and amendments in the Provision "About Procedure for Creation of Banks and Feature of Their Activities in the territory of the Kyrgyz Republic" approved by the resolution of Board of National Bank of the Kyrgyz Republic No. 19/2 of 12.08.98", registration number 15 of the Ministry of Justice of the Kyrgyz Republic of February 1, 2001;

- the resolution of Board of National Bank of the Kyrgyz Republic No. 45/7 of November 23, 2002 "About modification and amendments in the Provision "About Procedure for Creation of Banks and Feature of Their Activities in the territory of the Kyrgyz Republic", registration number 162-02 of the Ministry of Justice of the Kyrgyz Republic of December 27, 2002;

- Item 3 of the resolution of Board of National Bank of the Kyrgyz Republic No. 13/2 of April 16, 2003 "About establishment of requirements for determination of subjects and the list of offshore zones", registration number 37-03 of the Ministry of Justice of the Kyrgyz Republic of April 22, 2003;

- Item 1 of the resolution of Board of National Bank of the Kyrgyz Republic No. 11/2 of April 2, 2003 "About modification and amendments in the Provision "About Procedure for Creation of Banks and Feature of Their Activities in the territory of the Kyrgyz Republic", registration number 45-03 of the Ministry of Justice of the Kyrgyz Republic of April 23, 2003;

- the resolution of Board of National Bank of the Kyrgyz Republic No. 12/6 of March 29, 2000 "About the Provision "About Reorganization of Commercial Banks in the form of Merge"", registration number 55 of the Ministry of Justice of the Kyrgyz Republic of April 11, 2000;

- the resolution of Board of National Bank of the Kyrgyz Republic No. 12/7 of March 29, 2000 "About Regulations on reorganization of commercial banks in the form of accession", registration number 57 of the Ministry of Justice of the Kyrgyz Republic of April 14, 2000;

- the resolution of Board of National Bank of the Kyrgyz Republic No. 21/3 of June 29, 2005 "About approval of the Regulations on licensing of activities of banks".

5. To management of methodology of supervision and licensing of National Bank of the Kyrgyz Republic to bring this resolution to the attention of regional managements of NBKR and representative office of National Bank of the Kyrgyz Republic in Batken Province, commercial banks, JSC Settlement and Savings Company, the Kyrgyz Agricultural Finance Corporation.

6. After publication of the registered regulatory legal act to inform the Ministry of Justice on publication source (the name of the edition, its number and date).

7. To impose control of execution of this resolution on Dzhanybekova Page E., vice-chairman of National Bank of the Kyrgyz Republic.

Deputy Chairman of the board Acting Chairman of NBKR

Ishenbayev M. B.

Approved by the Resolution of Board of National Bank of the Kyrgyz Republic of March 2, 2006 No. 5/7

Regulations on licensing of activities of banks

This provision establishes procedure for licensing of activities of the commercial banks (further "bank") created in the territory of the Kyrgyz Republic, procedure for share acquisition of banks, coordination of officials of banks, banking expansions by creation of the isolated structural divisions, procedure for coordination of changes and amendments in constituent documents and reorganization of banks.

This Provision also extends to National bank of development of the Kyrgyz Republic taking into account the features provided by the Law of the Kyrgyz Republic "About National bank of development of the Kyrgyz Republic".

Section I. General provisions

Chapter 1. Bank, his founders, shareholders. The basic concepts used in the Provision

1.1. The bank performs the activities according to the legislation of the Kyrgyz Republic and the charter, based on the license for the right of carrying out banking activities granted by National Bank of the Kyrgyz Republic (further "National Bank").

In the presence of the corresponding license of National Bank the Islamic bank or bank having "Islamic window" can perform banking activities according to the Islamic principles of banking and financing according to the procedure, established by National Bank.

1.2. The bank can be created and be effective only in the form of the joint-stock company (closed or opened).

Licensing to the bank regulated by National Bank, and also implementation of its activities according to the license cannot be considered as guarantee of National Bank of bank solvency.

1.3. The bank receives the status of the legal entity from the moment of its state registration according to the legislation of the Kyrgyz Republic.

1.4. To start implementation of the activities the bank shall obtain the license of National Bank for the right of carrying out banking activities. The amount of payment for licenses is determined according to the legislation of the Kyrgyz Republic.

Before receipt of the license for banking operations to bank occupation by any activities as the legal entity, except for is forbidden to the organizational activities connected with organization of bank.

1.5. The bank uses that which is written down in its charter as the trade name. The bank has no right to refer to as itself in any documents, announcements or advertizing differently, than the name which is written down in its charter.

The trade name of bank shall conform to requirements of article 10 of the Law "About Banks and Banking Activity in the Kyrgyz Republic", contain the word "bank" and specifying that the bank is the open (closed) joint-stock company.

1.6. The minimum size of the authorized capital for again opened banks is determined by regulations of National Bank.

1.7. Physical persons and legal entities (residents and nonresidents of the Kyrgyz Republic) which participation in bank is not forbidden by the legislation can act as founders and shareholders of bank.

1.8. The Government of the Kyrgyz Republic can act as the founder and the shareholder of bank.

1.9. The legal entities who are not engaged in banking and/or financial activities including the activities connected with banking and/or financial activities cannot solely or together with other persons, perform:

1) immediate or indirect possession or management more than twenty in percent of voting shares (any type) of bank;

2) or, irrespective of participation in the authorized capital of bank to perform considerable influence on management and/or policy of bank based on the agreement or otherwise.

1.10 For the purposes of this provision the company is considered the engaged financial activities and activities connected with banking and/or financial activities under condition if this company:

a) is bank holding company (managing company) and it is created only for the purpose of bank management and the finance companies performing the types of activity specified in item 1.11 of this provision;

b) performs any of the types of activity specified in Item 1.11 of this Chapter based on the license of authorized state body and in the presence in country of source (registration) of this company of the legislation on the consolidated supervision.

1.11. The following types of activity are considered as types of the financial activities and activities connected with banking and/or financial activities for the purpose of this provision:

1) banking activity;

2) microfinancial activities (provision of the microcredits);

3) activities of investment funds;

4) insurance activity;

5) leasing activities;

6) implementation of activities for mortgage lending;

7) implementation of trust management (trust);

1.12. The legal entities registered in offshore zones or having as members of the affiliates registered in offshore zones or the physical persons living in the territory of offshore zones or being shareholders (participants) of the legal entities registered in offshore zones cannot be shareholders (founders) of resident bank of the Kyrgyz Republic if the specified offshore zones are included in the list approved by National Bank.

1.13. Founders (shareholders are considerable participants) bank shall have satisfactory financial position and fulfill the obligations on tax payment and equated to them to payments. Founders (shareholders) - legal entities shall be registered in the procedure established by the legislation and be effective at least one year.

1.14. Founders (shareholders) of bank, and also persons affiliated with them shall submit upon the demand of National Bank constituent documents, the financial and other reporting containing information on their founders (shareholders, participants), and also data on their financial condition and the performed operations.

Founders (shareholders) shall provide upon the demand of National Bank the above-stated information on persons having common interests with bank and its founders (shareholders).

1.15. Officials of state governing bodies:

1) cannot participate in governing bodies of bank or bank holding company, except for national banks;

More than ten percent of shares, with voting power in bank or bank holding company cannot own and/or control 2).

Persons owning ten and more percent of shares in bank or bank holding company in case of appointment them as officials in state bodies, shall deliver the shares in trust management for stay in public service.

1.16. Bank premises, including premises of branches and savings and exit banks, shall conform to requirements for technical reinforcement and the equipment (including equipment and the equipment of cash node, storage and other rooms) established by the Instruction "About single requirements for technical reinforcement of banks, financial credit institutes and procedure for their protection in the Kyrgyz Republic", and also requirements for fire safety about what the relevant statements between bank and authorized state bodies shall be drawn up.

1.17. Liquidation (the activities termination) of bank is performed according to the Law of the Kyrgyz Republic "About preservation, liquidation and bankruptcy of banks".

Concerning liquidation of National bank of development of the Kyrgyz Republic requirements of article 24 of the Law of the Kyrgyz Republic "About National bank of development of the Kyrgyz Republic" are effective.

1.18. In this Provision the following concepts are used:

1) affiliates it:

a) considerable members of the legal entity, including banks;

b) legal entities in whom other legal entities, including banks, are considerable participants;

c) legal entities, including banks in which other legal entities are considerable participants;

2) banking group is group which consists of bank and its subsidiary and/or dependent companies and/or bank holding company and its subsidiary and/or dependent companies. Specified persons are members of banking group;

3) bank holding company - the mother company, subsidiary company or one of subsidiary companies of which is bank;

4) subsidiary company - the legal entity controlled by other legal entity (mother company). The subsidiary company of other subsidiary company is also considered as subsidiary company (first) mother company;

5) subsidiary bank is the bank controlled by other bank or other legal entity (mother company). The subsidiary bank of subsidiary bank is also considered as subsidiary bank of mother company;

6) officials of bank - the chairman and other board members of bank, the chairman of the board, board members of bank, members of Sharia Council, the main bank employees on finance, on the credits, the head of "Islamic window", the head of department of financing of the Islamic principles. "Officials of bank" are also understood as persons who determine policy of bank or have powers to participate or really participate in the main transactions of bank creating policy of bank irrespective of whether these persons on a grant basis work or earn reward.

This determination extends also to officials of mother company of bank;

7) the dependent company - the legal entity in whom any person, solely or together with other person, exercises immediate or indirect possession or control (including according to the trust management agreement) of more than twenty percent of voting shares or more than twenty percent of equity interests of any legal entity;

8) considerable participation - individual or together with other persons:

a) immediate or indirect possession or management (including according to the trust management agreement) ten and more percent of voting shares (any type) of joint-stock company, ten and more percent of the authorized capital of the legal entity which is not joint-stock company;

b) or, irrespective of participation in the authorized capital of the legal entity, opportunity to perform considerable influence on management and/or policy of this legal entity based on the agreement or otherwise;

9) the considerable participant - person performing considerable participation in the legal entity according to the Law "About Banks and Banking Activity in the Kyrgyz Republic";

10) insiders (internal persons) of bank - the board members, board members, members of Sharia Council, other officials, considerable participants and any other physical persons connected with specified persons common interests;

11) the company - any legal entity;

12) control - individual, or together with other persons:

a) immediate or indirect possession or management (including according to the trust management agreement) fifty and more percent of voting shares of the joint-stock company or the authorized capital of the legal entity which is not joint-stock company or;

b) opportunity to elect, at least, a half of board members (supervisory body) of the legal entity, or;

c) irrespective of equity participation of the legal entity, opportunity to perform the determining influence on management or policy of this legal entity on the basis of the agreement or otherwise;

13) the controlling person - person exercising control over the legal entity;

14) mother company - the legal entity controlling other legal entity;

15) common interests between two and/or more physical persons and legal entity are recognized existing in the presence of any of the following conditions:

a) one legal entity or physical person controls other person;

b) these persons are affiliated legal entities or insiders;

c) one of these persons is the dependent company of other person;

16) for the purposes of determination of the considerable participant, the dependent company and control:

a) the shares which are in ownership of the companies which are the dependent companies of one person or are controlled by one person, are considered as being in indirect possession of this person and unite together with the shares which are in immediate possession of this person in case of establishment of total quantity of the shares belonging to person;

b) the shares belonging to person and his close relatives (heirs of the first and second priority according to the civil legislation), are considered as directly belonging to this person;

17) persons jointly holding bank shares persons are recognized:

a) being close relatives;

b) jointly holding shares owing to the signed agreement or otherwise;

c) being considerable participants separately or jointly;

d) if one of them granted loan (the credit or means equated to it) to other person for share purchase;

e) if one of them is official or the representative of other person;

18) trust management is asset management (property) according to the trust management agreement. For the purposes of this provision the asset manager of this person shall not have common interests with this person and:

a) in no way it cannot be controlled by this person or depend on it in case of asset management of this person;

b) was not and is not the worker of this person or his business partner;

c) is not close relative of this person;

d) in the agreement on trust management it shall be specified that in case of asset management or property of this person the managing director manages and controls this property and in no way shall not consult and notify this person.

19) Islamic bank - the bank performing the activities according to the Islamic principles of banking and financing in the presence of the corresponding license of National Bank.

20) the Bank having "Islamic window" - the bank providing services according to the Islamic principles of banking and financing within the relevant division ("Islamic window") in the presence of the corresponding license of National Bank;

21) the Islamic principles of banking and financing - the rule of banking operations according to standards of Sharia according to the procedure, established by regulations of National Bank;

22) "Islamic window" - the relevant division of bank performing transactions according to the Islamic principles of banking and financing;

23) Standards of Sharia - set of implementation of economic or other activity, developed and approved by the international organizations establishing standards of conducting Islamic banking (The organization of financial accounting and audit for Islamic financial institutions and Council of Islamic financial services);

24) Sharia council - body of the bank performing transactions according to the Islamic principles of banking and financing, responsible for compliance of transactions (agreements) of bank to standards of Sharia.

1.19. In exceptional cases, for the purpose of preserving banking system stability and maintenance of healthy banking practice, the Board of National Bank can make the decision on improvement of financial condition of bank, without separate regulations of this provision.

1.20. The subsidiary or dependent companies of bank which are not bank can perform only the following types of activity:

1) microfinancial activities according to the Law of the Kyrgyz Republic "About the microfinancial organizations in the Kyrgyz Republic";

2) activities of investment funds according to the Law of the Kyrgyz Republic "About investment funds";

3) insurance activity according to the Law of the Kyrgyz Republic "About the organization of insurance in the Kyrgyz Republic";

4) auditor activities according to the Law of the Kyrgyz Republic "About auditor activities";

5) activities for the organization and conducting financial accounting according to the Law of the Kyrgyz Republic "About financial accounting";

6) leasing activities;

7) activities of pawnshops;

8) activities for rendering payment services:

- acceptance and carrying out payments and calculations for benefit of the third parties without opening of the account;

- acceptance, processing and issue of financial information (processing) on payments and calculations of the third parties to members of payment service providers;

- acceptance, processing and issue of financial information (interbank processing) on payments and calculations of the third parties to members of both interbank, and non-bank payment service providers;

- release, distribution, acceptance for payment and confirmation of prepaid cards in equivalent of electronic money;

9) purchase and sale of debt obligations (factoring);

10) acquisition of right of the requirement from the third parties of obligation fulfillment in cash;

11) implementation of broker services, including purchase and security sale at the request of the client, being effective according to instructions of the client;

12) implementation of trust management (trust) property under the contract with physical person or legal entity;

13) release on its own behalf securities according to regulatory legal acts, except for release of debt securities;

14) purchase and security sale on its own behalf according to regulatory legal acts;

15) rendering the consulting and information services connected with the main activities of the subsidiary or dependent companies of bank.

Chapter 2. Requirements to the documents submitted to National Bank

2.1. The documents submitted to National Bank according to this Provision and containing more than one leaf shall be described polistno, stitched, numbered, signed and certified properly. The annual statements published according to requirements of International accounting standards (the containing explanations and disclosures, the consolidated balance, the report on profit and losses and other forms of the financial reporting, and also the audit opinion confirming reliability of the financial reporting) can be presented in the form of the brochures printed by typographical method.

2.2. The original document and properly certified its copies shall be provided to National Bank. The documents submitted by foreign founders (shareholders) shall be legalized according to the procedure, established by regulatory legal acts of the Kyrgyz Republic.

In case of need, upon the demand of National Bank separate documents shall be submitted electronically.

2.3. In case of withdrawal of the petition and documents for receipt of the banking license, or in case of refusal in licensing, in satisfaction of the request for acquisition of the block of shares of bank and in other cases of refusal within this provision, the documents submitted by bank and applicants by National Bank do not return.

2.4. In time considerations of documents time spent by the applicant for completion of documents does not enter.

2.5. If the documents received by National Bank do not meet requirements imposed by National Bank, the term of consideration of documents is reckoned from the date of receipt by National Bank of the documents meeting qualifying standards.

2.6. Ceased to be valid according to the Resolution of Board of National Bank of the Kyrgyz Republic of 30.03.2016 No. 15/2

Section II. Creation of banks

Chapter 3. The documents submitted for creation of bank

3.1. After adoption by founders of the decision on creation of bank, for preparation of necessary documents for receipt of the license for the right of carrying out banking activities, his founders can create organizational group and shall determine the authorized person for contacts with National Bank concerning consideration of documents.

3.2. The nominated person approved as founders to position of the chairman of the board of directors or chairman of the board can be the authorized person.

3.3. For receipt of consultations and acquaintance with procedures for representation and consideration of the petition and the procedure of licensing the representative of founders can address to Department of licensing of Management of methodology of supervision and licensing of National Bank before the petition on creation of bank is provided. At meeting there can be all founders.

3.4. For receipt of the license for the right of carrying out banking activities the applicant provides in National Bank the following authentic documents or their copies certified properly in the Kyrgyz and/or Russian languages:

1) the petition for issue of the preliminary permission to receipt of banking licenses behind the authorized signature appointed general meeting of founders on appendix form 1;

2) the protocol of general meeting of founders - two copies of the copies certified notarially and containing decisions:

a) about creation of bank;

b) about approval of its name;

c) about election of board members and its chairman;

d) about election of members of the committee on audit and its chairman;

e) about approval of the charter;

e) about appointment of board members, the chairman of the board and his deputies, statement of the chief accountant;

g) about approval of the business plan, organizational structure of bank, the balance estimation and plan of the income, expenses also arrived for the first three years of activities;

h) about approval of the authorized person, with right to sign of the relevant documents;

3) the foundation agreement signed by all founders, two authentic copies. Signatures of authorized representatives of founders - legal entities, make sure seals of the legal entity. The signature of the founder - physical person makes sure notarially. Documents of the foreign applicant shall conform to requirements of Item 2.2 of Chapter 2 this provision. The list of questions which need to be reflected in the foundation agreement (standard form) is given in Appendix 2;

4) charter of bank, two authentic copies. The charter of bank (the standard form of the Charter is given in Appendix 3) in addition to data, stipulated by the legislation, shall contain:

a) date and number of the solution of the constituent assembly on approval of the charter;

b) the complete and reduced trade name in the Kyrgyz and Russian languages conforming to the requirements established by regulatory legal acts to the bank name;

c) data on form of business and pattern of ownership of bank;

d) regulations on governing bodies of bank;

e) procedure for decision making by governing bodies of bank, including the list of questions on which the qualified majority of votes of shareholders is necessary;

e) data on the address (location) of bank and its separate divisions;

g) regulations on fulfillment of requirements of the legislation of the Kyrgyz Republic if the branch of the foreign jar founded abroad is opened;

h) other provisions which are not contradicting the legislation of the Kyrgyz Republic, connected with features of activities of bank;

5) prior consent of authorized state body on registration of legal entities about use of the declared trade name;

6) detailed organizational structure of bank;

7) the business plan (in duplicate) containing economic case of creation of bank, announcing the purposes of activities of bank and methods of their achievement and constituted taking into account requirements of article 15 of the Law of the Kyrgyz Republic "About banks and banking activity in the Kyrgyz Republic" and Item 3.5 of this Chapter (the list of questions is given in Appendix 6);

8) the list of founders (shareholders) signed by the chairman of the board of directors in form of Appendices 4 and 5, two copies;

9) the data concerning founders (shareholders) including:

a) amount of participation of each shareholder in the capital of bank;

b) other data and documents of all founders (shareholders) of bank according to the Section III of this provision;

10) if the bank will be part of banking group, data and documents according to the Section III of this provision shall be in addition submitted;

11) if the bank is created in the form of subsidiary company of bank holding company - documents according to Chapter 18 of the Section V of this provision;

12) the list of board members, with indication of First name, middle initial, last name Chairman and his deputy and the data, according to the Section IV of this provision;

13) the list of members of the committee on audit, with indication of First name, middle initial, last name chairman and his deputy and the data according to the Section IV of this provision;

14) the information about candidates for positions of the chairman of the board, vice chairmen of the board, board members, the chief accountant, the head of service (department) of internal audit of bank, the head of the structural unit, bank, responsible for credit activities, the head of the structural unit responsible for asset-liability management of bank (or to persons equated to them on the functional obligations) according to the Section IV of this provision;

15) politicians and procedures about counteraction of legalization (washing) of the criminal income and to financing of terrorist or extremist activities;

16) credit policy, operational policy, and other main politicians of bank approved by the Board of directors of bank, and providing:

a) procedures for identification, assessment, control and monitoring of all possible risks to which the bank is subject;

b) control measures for minimization of all possible risks on permanent basis;

c) the description of information systems, risk management systems and internal control systems according to the approved policy;

17) the detailed actions plan on opening and the organization of activities of bank.

18) the request for the introduction in system of protection of deposits;

19) the letter obligation on connection/accession to national system of clearing settlements with use of bank payment cards Elkart in the Kyrgyz Republic and the business plan with indication of the planned indicators (card issue, the number of the installed peripheral equipment, including regions).

3.5. The business plan shall open strategy, the directions and scales of activities within the first three years of work of bank and to allow to estimate:

a) capability of bank to provide financial stability, accomplishment of economic standard rates, mandatory reserve requirements, observance of requirements of the legislation;

b) capability of bank to long-term existence as the profitable financial organization;

c) adequacy of management system to the risks accepted by bank.

The business plan shall be constituted taking into account the following:

1) calculations and forecasts shall be constituted taking into account real economic conditions of segment of the market in which the bank will work;

2) the description of influence of transactions of bank on improvement of economy of the region or country with indication of the amount of investments, including the credits shall be provided to national economy. At the same time the main amount of assets of bank shall be invested in economy of the Kyrgyz Republic;

3) prerequisites and forecasting shall be realistic and constituted based on the high-quality, checked information;

4) the business plan shall reflect good profitability of bank in reasonable time of time;

5) adequacy of the capital of bank shall conform to the minimum requirements of the standard of adequacy of the capital established by National Bank and to be sufficient for maintenance of the predicted growth of assets and support of the initial expenses connected with the organization of activities of bank. It means that capital level, shall be, after deduction of all expenses and losses on the organization of activities and opening of the bank at least established by National Bank of the size.

3.6. No. 40/7 is excluded according to the Resolution of Board of National Bank of the Kyrgyz Republic of 27.07.2011

3.7. Person appointed to position of the Chairman of the board of the created bank shall within 14 days from the date of appointment exempt the positions which are earlier held by it.

Chapter 3-1 the Procedure for provision and consideration of documents for creation of Islamic bank

3-1.1. After adoption by founders of the decision on creation of Islamic bank, for preparation of necessary documents for the purpose of receipt of the license for the right of carrying out banking activities, his founders shall determine the authorized person and can create organizational group for contacts with National Bank concerning provision of documents.

3-1.2. For receipt of consultations and acquaintance with procedures of licensing of Management of methodology of supervision and licensing, the authorized person can address to Department of licensing of Management of methodology of supervision and licensing of National Bank before the petition on creation of Islamic bank is provided.

3-1.3. For receipt of licenses for the right of carrying out banking activities according to the Islamic principles of banking and financing in national and foreign currencies, the applicant provides in National Bank the following authentic documents or their copies certified properly in the Kyrgyz and/or Russian languages:

1) the petition for issue of preliminary permission to receipt of banking licenses according to the Islamic principles of the banking and financing behind the authorized signature appointed general meeting of founders on appendix form 1;

2) the protocol of general meeting of founders (two copies of the copies certified notarially) containing the decision:

a) about creation of Islamic bank;

b) about approval of its name;

c) about election of members of Sharia Council and its chairman;

d) about approval of the Charter;

e) about appointment of board members, the chairman of the board and his deputies, statement of the chief accountant;

e) about approval of the business plan, organizational structure of bank, the balance estimation and plan of the income, expenses also arrived for the first three years of activities;

g) about approval of the authorized person and investment with its right of signing of the relevant documents;

3) the foundation agreement signed by all founders (two authentic copies). Signatures of authorized representatives of founders of legal entities, make sure seals of the legal entity. The signature of the founder - physical person makes sure notarially. Documents of the foreign applicant shall conform to requirements of Item 2.2 of Chapter 2 this provision. The list of data which need to be reflected in the foundation agreement (standard form) is given in Appendix 2;

4) Charter of bank (two authentic copies). The charter of bank (the standard form is given in Appendix 3), in addition to data, stipulated by the legislation, shall contain:

a) date and number of the solution of the constituent assembly on approval of the charter;

b) the complete and reduced trade name in the Kyrgyz and Russian languages conforming to the requirements established by regulatory legal acts to the bank name;

c) data on form of business and pattern of ownership of bank;

d) regulations on governing bodies of bank;

e) procedure for decision making by governing bodies of bank, including the list of questions on which the qualified majority of votes of shareholders is necessary;

e) data on the address (location) of bank;

g) regulations on fulfillment of requirements of the legislation of the Kyrgyz Republic if the branch of the foreign jar founded abroad is opened;

h) other provisions which are not contradicting the legislation of the Kyrgyz Republic, connected with features of activities of bank;

5) prior consent of authorized state body on registration of legal entities about use of the declared trade name;

6) detailed organizational structure of bank;

7) the business plan (in duplicate) containing economic case of creation of Islamic bank, announcing the purposes of activities of bank and methods of their achievement and constituted taking into account requirements of article 15 of the Law of the Kyrgyz Republic "About banks and banking activity in the Kyrgyz Republic" and Item 3.5 of this Chapter (the list of questions is given in Appendix 6);

8) the list of founders (shareholders) signed by the chairman of the board of directors of bank in form of Appendices 4 and 5 (two copies);

9) the data concerning founders (shareholders) including:

a) amount of participation of each shareholder in the capital of bank;

b) other data and documents of all founders (shareholders) of bank according to the Section III of this provision;

10) if the bank will be part of banking group, data and documents according to the Section III of this provision shall be in addition submitted;

11) if the bank is created in the form of subsidiary company of bank holding company - documents according to Chapter 18 of the Section V of this provision;

12) the list of board members and Sharia Council, with indication of full name of Chairmen and their deputies and the data according to the Section IV of this provision;

13) the information about candidates for positions of the chairman of the board, vice chairmen of the board, board members, the chief accountant, the head of service (department) of internal audit of the bank, the head of the structural unit responsible for credit activities of bank, the head of the structural unit responsible for asset-liability management of bank (or persons equated to them on the functional obligations) according to the Section IV of this provision;

14) credit, operational, accounting the politicians and other main politicians of bank approved by Sharia Council of the bank, approved by the Board of directors of bank and providing:

a) measures for identification, measurement, control and monitoring of all possible risks to which the bank as a result of carrying out banking activities by it according to the Islamic principles of banking and financing is subject;

b) control measures for minimization on permanent basis of all possible risks arising in connection with implementation of banking activities by bank according to the Islamic principles of banking and financing;

c) the description of information systems, risk management systems and internal control systems according to the approved policy;

15) the standard agreements on banking operations according to the Islamic principles of banking and financing constituted according to standards of Sharia and approved by Sharia Council of the bank;

16) policy and procedures for counteraction of legalization (washing) of the criminal income and financing of terrorist or extremist activities;

17) the detailed actions plan on opening and the organization of activities of Islamic bank;

18) the request for the introduction in system of protection of deposits.

3-1.4. Consideration of the petition for issue of preliminary permission to receipt of banking licenses, forming of the authorized capital during creation of Islamic bank and subsequent change of its size, check of readiness of bank for implementation of banking activity, issue of licenses for the right of carrying out banking activities according to the Islamic principles of banking and financing, refusal in licensing and withdrawal of preliminary permission to opening of bank is performed similar to the procedure established in Chapters 4-8 of this provision.

Chapter 4. Procedure for consideration of the petition for licensing

4.1. The petition for issue of preliminary permission to receipt of banking licenses is considered by National Bank in time, not exceeding two months from the moment of the receipt of the petition and all satisfactory documents necessary for licensing.

4.2. The term of consideration of the petition for licensing to bank with participation of the foreign company and bank can be prolonged on board decision of National Bank in addition for two months.

4.3. After consideration of the documents provided in Chapter 3 of the Section II of this provision, the National Bank can give preliminary permission to receipt (issue) of the license (opening of bank). The decision on issue of preliminary permission to receipt (issue) of the license (opening of bank) is made by Board of National Bank during the term specified in Item 4.1 and 4.2 of this head Polozheniya.

4.4. By consideration of the petition for licensing the National Bank performs collection, the analysis and check of reliability of data concerning founders (shareholders), board members and board and other officials, and also the data received with the petition. Identification of any unreliable information or concealment of information is the basis for variation of the petition and refusal in licensing for the right of carrying out banking activities.

4.5. Candidates for the positions specified in Item 13.1 of this provision shall undergo coordination in National Bank according to the Section IV of this provision before issue of preliminary permission to receipt (issue) of the license (opening of bank). In case of approval of candidates, the National Bank takes goodwill of candidates for the specified positions into account.

The petition and the submitted documents are studied by National Bank for the purpose of determination whether the bank will be operated according to the principles of implementation of healthy and safe banking practice, and whether will perform bank according to the provided business plan the activities profitably. In particular, rationality of the business plan, future profitability and adequacy of capital base, competence, goodwill and reliability of founders (shareholders), the offered board members, chairman of Committee on audit, board members and compliance of activities of bank to the bank law, observance of the antitrust law, influence of the planned activities of bank on economy, bank system of the country, including from the point of view of the level of concentration of sources of origin of the capital, resources, etc. is considered.

4.6. Ceased to be valid according to the Resolution of Board of National Bank of the Kyrgyz Republic of 30.03.2016 No. 15/2

4.7. Information necessary for acceptance by Board of National Bank of the decision shall be in prison about provision of preliminary permission to receipt of the license (opening of bank), namely:

1) term of consideration of documents;

2) compliance of constituent documents to the legislation;

3) the analysis of financial position of founders (shareholders), including their opportunities to provide, if necessary, the supplementary capital to bank, and also data on goodwill of founders (shareholders) of bank;

4) distribution of shares between founders (shareholders), with indication of their share;

5) the short analysis of the business plan with disclosure of information on the planned profit for every year, the planned expenses with breakdown under Articles, the planned amounts of the credits and attraction of deposits influence of the main indicators of bank on indicators of bank system, including from the point of view of the level of concentration of sources of origin of the capital, resources (for example, from one country), etc.

6) compliance of candidates of officials of bank to requirements imposed by National Bank, data on their goodwill, professional and other qualities;

7) assessment of conformity the politician and procedures to the requirements established by National Bank;

8) if the bank will be included into banking group of the data on structure of group, financial position of the companies entering into group and politicians of group on risk management and internal control;

9) other questions necessary for decision making and issue of preliminary permission to opening of bank.

At the same time the recommended level of concentration can constitute no more than 35% of indicators of bank system.

4.8. Preliminary permission to receipt of the license (opening of bank) means that to the applicant the license after accomplishment of the conditions specified in Item 6.4 will be granted. Chapters 6 of this provision.

4.9. In case of the positive decision Board of National Bank of question of issue of preliminary permission to receipt of the license (opening of bank), within three working days from the moment of decision making, go:

1) addressed to the authorized person or the chairman of the board of directors or the chairman of the board - the letter with indication of number of the accumulation account opened in National Bank for forming of the authorized capital;

2) in authorized state body on registration of legal entities - the letter on issue of preliminary permission to receipt of the license (opening of bank), for implementation of state registration of bank according to requirements of the legislation. About two copies of the foundation agreement and the charter of bank enclose to the letter on preliminary permission to receipt of the license (opening of bank);

3) in authorized state body on regulation of the security market - the copy of the letter on issue of preliminary permission to opening of bank and coordination of the size of the authorized capital specified in the foundation agreement and the charter of bank for implementation of state registration of release (issue) of bank shares.

4.10. Within five working days from the date of implementation of state registration, the bank shall provide to National Bank the cover letter behind the authorized signature or the chairman of the board of directors or the chairman of the board with appendix:

1) copies of the certificate of authorized state body on the state registration of the legal entity certified properly;

2) copies of the decision of authorized state body on the registration of share issue of bank certified properly;

3) the notarized copy of the foundation agreement of bank with stamps of the authorized state body performing registration of legal entities;

4) the notarized copy of the Charter of bank with stamps of the authorized state body performing registration of legal entities;

5) the conclusions about examination of trade name of the bank certified properly.

Chapter 5. Procedure for forming of the authorized capital during creation of bank and subsequent change of its size

5.1. The basis of the capital of bank is constituted by completely paid authorized capital. Only such authorized capital on which the bank has no obligations on return of investments made by shareholders is equity composition of bank.

5.2. The authorized capital of bank is created only in national currency of the Kyrgyz Republic and only at the expense of money of founders (shareholders). Use for forming of the authorized capital of fixed assets and intangible assets is not allowed.

5.3. Use of the credit of banks for share acquisition is forbidden. The bank cannot issue the credits for purchase or under guarantee of the securities issued by bank.

Forming of the authorized capital at the expense of means of the government budget and the public extrabudgetary funds, except as specified, directly stipulated by the legislation is not allowed.

5.4. Founders of bank shall bring the minimum size of the authorized capital on the accumulation account opened in National Bank within six months from the date of acceptance by Board of National Bank of the decision on issue of preliminary permission to receipt of the license (opening of bank).

5.5. The means which are on the accumulation account opened in National Bank cannot be used by founders on any purposes before receipt of the license for the right of carrying out banking activities. In case of refusal in licensing, all means according to the order of National Bank return to founders (shareholders).

5.6. Founders (shareholders) of bank, both in case of initial forming of the authorized capital, and in case of the subsequent increase in its size, shall deposit funds in the authorized capital only in non-cash form, by transfer from bank accounts, except as specified increases in the authorized capital at the expense of dividends of bank.

Introduction of the money allocated in the authorized capital both in case of its initial forming, and in case of subsequent its increase, is forbidden by any other persons for founders (shareholders).

If means of the founder (shareholder), including the means received by it within the loan agreement, the credit or means equated to them, are listed to the Kyrgyz Republic from foreign banks, such banks (except for the parent banks performing capitalization of the subsidiary banks located in the territory of the Kyrgyz Republic) shall have long-term credit score not below category "VVV", the assigned by Standard & Poor's rating agency (USA) or long-term credit rating is not lower than category "Baa" on Moody's Investors Service (USA) or the long-term credit rating is not lower than category "BBB" on Fitch-IBCA (USA) or the equivalent credit score assigned by rating agencies: Capital Intelligence, Japan Credit Rating Agency (JCR), Dominion Bond Rating Service (DBRS), Rating & Investment Information (R&I) or the equivalent credit score assigned by national rating agencies, the bank countries which obtained accreditation in authorized bodies - the sender and which rating is recognized the Central (national) Bank of the country of bank - the sender.

For the purposes of this Item:

1) foreign banks are implied only as banks - senders. Corresponding banks do not fall under this determination (transit banks, banks - intermediaries).

2) In the loan agreement it shall be specified that borrowed funds are intended only for share purchase of bank.

5.7. Within three working days from the date of registration of shareholders, the bank shall provide the shareholder register certified properly in National Bank. In subsequent, in case of any changes in shareholding structure, within 5 working days from the moment of modification of the shareholder register, of National Bank the shareholder register of bank with changes on paper certified properly is submitted.

5.8. Within one month after forming of the minimum authorized capital the National Bank performs check of forming of the authorized capital of bank.

Check of increase in the authorized capital of bank can be performed within complex and target checks of National Bank.

5.9. The review period of forming of the authorized capital can be extended by the supervising deputy the Chairman/board member of National Bank for a period of up to one month if:

1) the documents confirming legitimacy of forming of the authorized capital (payment) are not completely submitted;

2) during check of forming of the authorized capital there were questions requiring additional provision of documents, or receipt of the additional information;

3) on other bases, stipulated by the legislation.

5.10. Legal put all members (shareholders) of bank and the copy of source documents on forming of the authorized capital during creation of bank, further in case of change of the size of the authorized capital (including the copies of payment documents, decisions concerning change of the size of the authorized capital and other documents) and shareholding structure of bank shall be stored by bank in the separate folder with assignment of separate nomenclature number by it and have permanent storage duration. The bank shall determine person responsible for ensuring proper forming and storage of these folders.

Legal cases of shareholders from ownership shares less than five percent of the authorized capital of bank shall contain, at least, the following data:

- on physical persons - passport data;

- on legal entities - the certificate or the document confirming state registration of the legal entity.

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