RESOLUTION OF BOARD OF NATIONAL BANK OF THE KYRGYZ REPUBLIC

of September 9, 2019 No. 2019-P-33/47-3-(NFKU)

About approval of Regulations of activities of guarantee funds

According to articles 20 and 68 of the Law of the Kyrgyz Republic "About National Bank of the Kyrgyz Republic, banks and banking activity", article 15 of the Law of the Kyrgyz Republic "About guarantee funds in the Kyrgyz Republic", the Board of National Bank of the Kyrgyz Republic decides:

1. Approve Regulations of activities of guarantee funds it (is applied).

2. To legal management:

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

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

3. This resolution becomes effective after fifteen days from the date of official publication.

To guarantee funds of the Kyrgyz Republic in six-months time from the date of entry into force of this resolution to bring the activities into accord with this resolution.

4. To management of supervision of non-bank financial credit institutions to bring this resolution to the attention of guarantee funds of the Kyrgyz Republic.

5. To impose control of execution of this resolution on the board member of the National Bank of the Kyrgyz Republic supervising Management of supervision of non-bank financial credit institutions.

Appendix

to the Resolution of Board of National Bank of the Kyrgyz Republic of September 9, 2019 No. 2019-P-33/47-3-(NFKU)

Regulations of activities of guarantee funds

Chapter 1. General provisions

1. These rules of regulation of activities of guarantee funds (further - Rules) determine the following requirements to activities of guarantee funds:

- general requirements;

- economic standard rates, requirements and restrictions;

- on issue of guarantees and warranty tools and obligation fulfillment on them;

- on regulation and supervision of activities of guarantee funds;

- on accounting and control;

- on the organization and functioning of internal control system;

- requirements to carrying out external audit;

- on application of corrective actions.

2. Guarantee funds perform the activities by provision of guarantees on part of obligations of clients under the agreement of financing, and also within agreements with financial credit institutions. At the same time financing is understood loan granting and their substitutes, and also as the transactions/transactions performed according to the Islamic principles of financing.

3. In this Provision the following concepts and terms are used:

1) the client - the subject of entrepreneurship and the participant of the state housing programmes which part of obligations is provided with guarantee under the contract of financing with financial credit institution;

2) guarantee - the obligation of guarantee fund to financial credit institution to bear responsibility for execution of part of obligations on principal debt of the client under agreements of financing within the amount of the provided guarantee;

3) warranty activities - the activities promoting increase in availability of financing to clients and directed to decrease in part of credit risks of financial credit institutions by provision of guarantees under agreements and/or agreements of financing of clients and other warranty tools;

4) policy of provision of guarantees - the document approved by authorized body of guarantee fund, regulating the procedure and conditions of provision of guarantees, types of warranty tools, the principles of provision of guarantees, criteria and requirements of selection of obligations of clients, and also conditions of depreciation of guarantee and responsibility of the parties conforming to requirements of regulatory legal acts of National Bank;

5) warranty tools - set of various forms and warranty types used for providing obligations of clients under agreements of financing;

6) the recourse requirement - the right of guarantee fund to demand from the client of compensation of the amount paid to financial credit institution in obligation fulfillment under the agreement of guarantee.

Chapter 2. General requirements to activities of guarantee fund

4. The National Bank of the Kyrgyz Republic (further - National Bank) has the right to establish the economic standard rates, requirements and restrictions obligatory for accomplishment by guarantee funds, to check activities of guarantee funds, to apply the corrective actions provided by the Law of the Kyrgyz Republic "About guarantee funds in the Kyrgyz Republic" and regulatory legal acts of National Bank.

5. Provision of guarantees is performed by the conclusion of the contract of guarantee between guarantee fund, financial credit institution and the client taking into account requirements of regulatory legal acts of National Bank.

Portfolio guarantees are the guarantees represented within the corresponding agreements on cooperation with financial credit institutions.

Warranty tools are provided according to the Law of the Kyrgyz Republic "About guarantee funds in the Kyrgyz Republic", regulatory legal acts of National Bank and policy provision of guarantees for guarantee fund.

5-1. The guarantee fund for the purpose of the organization of assessment work of risk in case of the conclusion, change and monitoring of execution of agreements of guarantee has the right to sign the contract on exchange of credit information with credit bureau and according to this agreement shall provide in credit bureau credit information according to the established requirements of the legislation of the Kyrgyz Republic.

The guarantee fund shall provide credit information (except for to information on portfolio guarantees) in credit bureau with the consent of the client, except as specified, when negative credit information is provided.

5-2. In case of the conclusion guarantee fund of the contract on exchange of credit information with credit bureau its internal documents on management of warranty activities shall contain procedure and requirements regarding the organization of work on exchange of credit information, and also the main conditions, the rights and obligations of guarantee fund in case of the conclusion of the contract on exchange of credit information with credit bureau, including:

- about ensuring storage and protection of credit information against unauthorized access, destruction, change, use or disclosure;

- about prohibition of disclosure of data the guarantee fund and its employees who got information access in the course of exchange of credit information and also after the termination of their employment contract (contract);

- about the timely message to credit bureau about changes and updates of credit information for which the guarantee fund bears responsibility;

- about modification of the credit information transferred to credit bureau in case of provision of incorrect information, including upon the demand of the subject of credit information;

- the non-inclusion bases in negative credit information of information about the subject of credit information according to requirements of the legislation of the Kyrgyz Republic;

- about ensuring smooth functioning of system of data transmission in credit bureau according to the agreement on exchange of credit information.

The guarantee fund bears responsibility for misstatement of the credit information transferred to credit bureau, for completeness of the transmitted data concerning all clients, for timeliness of its transfer, including in case of adjustment of the transferred information in connection with technical mistakes, according to the legislation of the Kyrgyz Republic and regulatory legal acts of National Bank.

By consideration of question of issue of guarantee the guarantee fund if necessary can request information (credit report) on the client and at the discretion of guarantee fund about the faces tied with the client (in the presence of their consent according to the legislation) in the existing credit bureaus.

The guarantee fund shall observe confidentiality and safety of the credit report received from credit bureau, not to disclose the credit information containing in it to the third parties and to use the credit report only for the purposes established by the legislation on exchange of credit information.

6. Warranty tools are provided on part of the obligation of the client under the agreement of financing.

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