RESOLUTION OF BOARD OF NATIONAL BANK OF THE KYRGYZ REPUBLIC

of April 29, 2020 No. 2020-P-12/25-7-(NPA)

About Provisional rules of classification of assets and implementation of the corresponding allocations to reserve on covering of potential losses and losses by commercial banks and separate non-bank financial credit institutions

For the purpose of preserving banking system stability and mobilization of resources of banks for maintenance of economic activity according to articles 20 and 68 of the Law of the Kyrgyz Republic "About National Bank of the Kyrgyz Republic, banks and banking activity" the Board of National Bank of the Kyrgyz Republic decides:

1. Approve Provisional rules of classification of assets and implementation of the corresponding allocations to reserve on covering of potential losses and losses by commercial banks and separate non-bank financial credit institutions (are applied).

2. To the commercial banks, microfinance companies having the right to attraction of deposits to guarantee funds and JSC Finance Company of Credit Unions to provide to National Bank information on the assets classified according to this resolution the last working day of every month.

3. Requirements of the Provision "About Classification of Assets and the Corresponding Allocations to Reserve on Covering of Potential Losses and Losses" approved by the resolution of Board of National Bank of the Kyrgyz Republic of July 21, 2004 No. 18/3, and the Procedure for application of special classification of the credits answering to certain criteria of the Board of National Bank of the Kyrgyz Republic approved by the resolution of March 2, 2006 are applied No. 5/6, to the commercial banks, microfinance companies having the right to attraction of deposits, to guarantee funds and JSC Finance Company of Credit Unions in the part which is not contradicting this resolution.

4. Ceased to be valid according to the Resolution of Board of National Bank of the Kyrgyz Republic of 27.04.2022 No. 2022-P-12/27-4-(BS)

5. This resolution becomes effective from the date of its publication and is effective before adoption of the relevant decision of Board of National Bank.

6. 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 entering into the State register of regulatory legal acts of the Kyrgyz Republic.

7. To management of methodology of supervision and licensing of banks to bring this resolution to the attention of OYuL "Union of Banks of Kyrgyzstan", commercial banks, all structural divisions, regional managements, representative offices of National Bank in Batken Province.

8. To impose control of execution of this resolution on the board member of the National Bank of the Kyrgyz Republic supervising Management of methodology of supervision and licensing of banks.

Appendix

to the Resolution of Board of National Bank of the Kyrgyz Republic of April 29, 2020 No. 2020-P-12/25-7-(NPA)

Provisional rules of classification of assets and implementation of the corresponding allocations to reserve on covering of potential losses and losses by commercial banks and separate non-bank financial credit institutions

Chapter 1. General provisions

1. These Provisional rules of classification of assets and implementation of the corresponding allocations to reserve on covering of potential losses and losses by commercial banks and separate non-bank financial credit institutions (further - Provisional rules) determine temporary procedure for classification by the commercial banks and microfinance companies having the right to attraction of deposits, guarantee funds and JSC Finance Company of Credit Unions (further - banks) assets which quality worsened or worsens in view of the spread of koronavirusny infection and the related rationing arrangements taken by state bodies and also in connection with the current geopolitical situation and influence of negative consequences of the external economic shock.

These Provisional rules do not extend to again issued credits of banks, except for the credits issued according to target state programs of the Cabinet of Ministers of the Kyrgyz Republic or programs for the purpose of renewal/activization of activities of physical persons and legal entities, and also the credits specified in Chapter 7 of these Provisional rules. 

Chapter 2. General instructions for classification of assets

2. In case of availability at the borrower (physical person or legal entity) of several credits in one bank or in banking group the bank has the right not to apply the worst category of classification to all credits if the worst category is appropriated to the credit of the borrower which financial condition worsened or worsens in view of the spread of koronavirusny infection and the related rationing arrangements taken by state bodies and also in connection with the current geopolitical situation and influence of negative consequences of the external economic shock.

In this case the bank can apply category of classification to each credit separately according to characteristic signs of category.

3. Again issued credits according to target state programs of the Cabinet of Ministers of the Kyrgyz Republic or programs for the purpose of renewal/activization of activities of physical persons and legal entities originally are recognized as "normal" or "satisfactory" assets, according to the characteristic signs established by the Provision "About Classification of Assets and the Corresponding Allocations to Reserve on Covering of Potential Losses and Losses" (further - the Provision "About Classification of Assets and the Corresponding Allocations to Reserve on Covering of Potential Losses and Losses") approved by the resolution of Board of National Bank of the Kyrgyz Republic of July 21, 2004 No. 18/3.

The subsequent classification of these assets is performed according to requirements of these Provisional rules.

Chapter 3. Not classified assets

4. Ceased to be valid according to the Resolution of Board of National Bank of the Kyrgyz Republic of 19.05.2021 No. 2021-P-12/25-3-(NPA)

5. Characteristic signs in case of which manifestation the asset can be considered "asset under observation" are:

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