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RESOLUTION OF BOARD OF NATIONAL BANK OF THE KYRGYZ REPUBLIC

of October 13, 2021 No. 2021-P-14/56-1-(PS)

About approval of Rules of implementation of supervision (oversight) of payment system of the Kyrgyz Republic

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 Rules of implementation of supervision (oversight) of payment system of the Kyrgyz Republic (are applied).

2. Recognize invalid the following resolutions of Board of National Bank of the Kyrgyz Republic:

- of December 21, 2015 No. 77/4 "About Rules of implementation of supervision (oversight) of payment system of the Kyrgyz Republic";

- of June 8, 2017 No. 2017-P-14/23-11-(PS) "About modification and amendments in some regulatory legal acts and recognition voided some regulatory legal acts of National Bank of the Kyrgyz Republic".

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

4. 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.

5. To management of payment systems to bring this resolution to the attention of commercial banks, operators of payment systems and payment institutes.

6. To department of development of official language and document flow to bring this resolution to the attention of the relevant structural divisions, regional managements, representative offices of National Bank of the Kyrgyz Republic in Batken Province.

7. To impose control of execution of this resolution on the board member of the National Bank of the Kyrgyz Republic supervising management of payment systems.

Chairman of National Bank of the Kyrgyz Republic

K. Bokontayev

Appendix

to the Resolution of Board of National Bank of the Kyrgyz Republic of October 13, 2021 No. 2021-P-14/56-1-(PS)

Rules of implementation of supervision (oversight) of payment system of the Kyrgyz Republic

Chapter 1. General provisions

1. Rules of implementation of supervision (oversight) of payment system of the Kyrgyz Republic (further - Rules) establish procedure National Bank of the Kyrgyz Republic (further - National Bank) supervision (oversight) of payment system of the Kyrgyz Republic, procedure, forms and rules of provision of the reporting by the operators of payment systems having the license or who were registered by National Bank and also providers of payment services and the commercial banks having own payment systems and being participants of international payment systems (further - persons under surveillance of the organization), and also procedure for informing National Bank on new products / systems in payment system and changes in system at stage of implementation of product/system.

2. Commercial banks, being participants of international payment systems, provide the reporting within the regulating bank reporting. The reporting under settlement systems electronic money is provided by commercial banks according to requirements of regulatory legal acts of the Kyrgyz Republic.

3. Operators of payment systems, and also the commercial banks having own payment systems provide the reporting according to these rules in electronic and paper forms with the cover letter in the absence of the digital signature or within the periodic regulating reporting (further - missile defense) in the presence of the digital signature of certification center of National Bank.

4. When implementing supervision (oversight) of payment system of the Kyrgyz Republic the National Bank uses information obtained from persons under surveillance of the organizations within the periodic reporting and interaction, official requests, reports on results of assessment, the signed agreements and international cooperation and also data from open sources.

5. The National Bank for the purpose of minimization of systemic risk in payment system of the Kyrgyz Republic according to the established criteria of the importance at least once a half-year reviews the list system and significant (further - SZPS), significant (further - ZPS), national payment systems (further - NPS) and providers of critical services. To operators of SZPS, ZPS, NPS and providers of critical services adequate notices about recognition of their SZPS, ZPS, NPS and provider of critical services go.

6. Persons under surveillance of the organization create and provide the reporting in National Bank according to degree of the importance of the payment system and criticality of payment infrastructure which is determined by National Bank, according to the approved criteria of the importance.

7. The National Bank when implementing supervision (oversight) of payment system of the Kyrgyz Republic keeps confidentiality of information received from persons under surveillance and other organizations. Disclosure of such information is performed according to the legislation of the Kyrgyz Republic.

Chapter 2. Procedure of monitoring of payment system of the Kyrgyz Republic

8. The National Bank performs monitoring of payment system of the Kyrgyz Republic on the basis of collection and the analysis of the regular reporting created by operators of payment systems, issuers of electronic money, participants of international payment systems and providers of critical services, allowing to obtain data on quantity and quality characteristics of functioning of payment system including:

1) on amount and the number of daily payments within a month;

2) on concentration coefficient in payment system;

3) on payments by payment instruments, to types of payment service providers and channels for exchange of financial messages;

4) on payments by on large participants of system;

5) on incidents (emergency situations, unauthorized transactions, etc.);

6) by to destination payments;

7) on unexecuted payments with indication of the reasons;

8) on interrelations between payment systems.

9. The National Bank in case of supervision (oversight) of payment system can:

- send inquiries in persons under surveillance of the organization for receipt of information on condition of payment system and payment infrastructure, incidents, claims, addresses and responses by payments, payment services and payment infrastructure, for the applied methods of management in payment system, for the list of members of payment service provider, for the rates which are not requested by National Bank within regulating reports, the applied current technologies and innovations;

- communicate with state bodies, international payment systems, international financial institutions and Central Banks of other countries;

- organize and participate in discussions, meetings and multilateral negotiations, including negotiations in working groups and participation in committees/councils;

- perform interaction in forms, stipulated by the legislation and the corresponding practice.

10. Operators of SZPS on daily basis, except for days off and holidays, transfer electronically (Excel file) in National Bank the following information:

- quantity and amount of payments by on each participant, according to the form established in Appendix 1 to these rules;

- quantity and amount of unexecuted payment documents with indication of the non-execution reasons (shortage of liquidity, are rejected by system, are withdrawn by the participant, failure in system, etc.), according to the form established in Appendix 2 to these rules;

- about incidents in payment system (violation of regulations of system operation, failures and mistakes in work, idle times in system operation, unauthorized access to system, uninterruptedness violation, force majeur circumstances, etc.), according to the form established in Appendix 1 to the Provision "About Emergency Situations in Payment System" approved by the resolution of Board of National Bank of September 2, 2019 No. 2019-P-14/46-2-(PS) (further - Regulations on emergency situations).

11. Operators of ZPS, NPS and providers of critical services transfer to National Bank information on incidents in payment system (violation of regulations of system operation, failures and mistakes in work, idle times in work and decrease in availability of system, unauthorized access to system, uninterruptedness violation, force majeur circumstances, etc.) in process of their origin, according to the form established in Appendix 1 to the Regulations on emergency situations.

12. Operators of ZPS and providers of critical services on monthly basis, no later than the 15th following month under report provide in National Bank information on quantity and amount of payments (translations), including by on participants, according to the forms established in appendices 3-6 to these rules.

13. Operators of the payment systems which are not SZPS and ZPS and also the commercial banks (having own payment systems which are agents of the international electronic payment systems, and also participants of international payment systems) and providers of payment services on monthly basis, no later than the 15th following month under report provide the following information in National Bank:

- about quantity and amount of payments (translations), according to the form established in Appendix 3 to these rules;

- about quantity and amount of the payments which are not accepted in processing by payment service provider according to the form established in Appendix 5 to these rules;

- about the incidents connected with violation of smooth functioning of payment system and/or rules of payment system (violation of regulations of system operation, failures and mistakes in work, idle times in system operation, unauthorized access to system, uninterruptedness violation, force majeur circumstances, etc.), according to the form established in Appendix 1 to the Regulations on emergency situations;

- about use of payment instruments, according to the form established in Appendix 6 to these rules.

14. Reports from persons under surveillance of the organizations shall include all forms of the above-stated data on each payment system with which the subsupervising organization works.

The reports provided through regulating bank to the reporting and missile defense go to National Bank electronically in the form of the Excel-file (in the file there shall be single sheets for each report form and in breakdown on payment systems) with the cover letter of the established format, signed by the corresponding digital signature.

The reports provided not through the regulating bank reporting or missile defense go to National Bank electronically (in the file there shall be single sheets for each report form and in breakdown on payment systems) and the cover letter in the PDF format with appendices in the Ecxel and PDF format to the e-mail address psoversight@nbkr.kg, with the subsequent direction in paper form in the absence of the digital signature. Information, directed in electronic form, shall be identical to information provided on paper. Date of provision of the report on paper is date of its registration in National Bank.

15. In case of any discrepancies, mistakes, incomplete provision or incorrect filling of report forms the relevant structural division of National Bank notifies the authorized employee from the subsupervising organization for e-mail and/or phone on need of adjustment of the report. The modified reports together with the cover letter shall be provided in National Bank: daily - within 2 (two) working days, weekly reports - within 3 (three) working days, all other reports - within 5 (five) working days from the date of receipt of the adequate notice from National Bank.

16. Operators and members of payment service providers, and also providers of critical services at stage of implementation of new services, products which were not provided earlier, implementations of changes in system, and also in case of final cancellation of system shall inform National Bank by the direction of the notification with appendix of the detailed information describing the developed service/product, expected changes / amendments in system in advance. The National Bank analyzes the obtained information and in case of identification of risks for payment system of the Kyrgyz Republic, payers or other payment systems shall inform the operator/member of payment service provider, provider of critical services on it within 30 (thirty) calendar days from the moment of registration of the notification in National Bank for remedial action. In case of the non-notification of the member of payment service provider National Bank at the scheduled time, it is considered that risks are not available.

17. The subsupervising organization bears responsibility for failure to provide information, untimely and/or doubtful provision of information, and also incorrect filling of reports, according to the legislation of the Kyrgyz Republic.

18. In the course of monitoring the National Bank analyzes:

- individual quantity and quality characteristics of each payment system functioning in the territory of the Kyrgyz Republic;

- dynamics of change of individual characteristics of each payment system functioning in the territory of the Kyrgyz Republic;

- distribution of market share on types of payment systems;

- probability of systemic risk in payment system.

19. Results of monitoring are systematized on monthly basis and used for the purpose of implementation of supervision (oversight) of payment system of the Kyrgyz Republic within regulation and development of payment system of the Kyrgyz Republic.

20. The National Bank at least once a quarter posts information on results of supervision (oversight) of payment system of the Kyrgyz Republic on the official website, observing at the same time the necessary level of confidentiality.

21. Information on results of supervision (oversight) of payment system of the Kyrgyz Republic may contain:

- information on typical shortcomings and problems in functioning of payment system;

- results of monitoring of functioning of different types of payment systems, risk level and availability of national payment systems;

- information on results of assessment and analysis of various payment systems, etc.

Chapter 3. Procedure for evaluating functioning of payment systems and payment infrastructure

22. Assessment of functioning of payment system and payment infrastructure on compliance to requirements of National Bank and to the established international standards, including the Principles for infrastructure (PIFR)(1) financial markets, is carried out by National Bank concerning SZPS, ZPS, providers of critical services at least once in three years based on the quantitative and high-quality data obtained as a result of carrying out monitoring, results of self-assessment by the operator of the system and other documents submitted within assessment.

23. When evaluating payment systems the National Bank, according to international standards, carries out at least once in three years assessment on compliance to Obligations of Central Banks, regulators of the market and other competent authorities in the field of infrastructures of the financial market (Appendix 11 to these rules).

24. The National Bank in 3 (three) months prior to the beginning of assessment informs the operator of SZPS, ZPS, provider of critical services on start date of assessment of their system or activities, and also notifies on need of provision in National Bank to date of assessment of results of the carried-out self-assessment of the system according to appendices 8, of 10, 12 to these rules with the direction of the relevant internal documents (agreements, operational rules, internal regulating documents, orders, etc.).

25. The self-assessment shall be carried out according to categories of the importance of systems (SZPS, ZPS) and provider of critical services, and also to contain the developed information on each Item of the questionnaire.

26. The analysis of fulfillment of requirements of regulatory legal acts of National Bank is integral part of self-assessment of the system which is carried out by the operator of payment service provider and provider of critical services.

27. Operators of SZPS and ZPS, and also providers of critical services to date of assessment shall provide the following documents in National Bank:

- self-assessment of functioning of the payment system according to the forms established by appendices 8, of 10, 12 to these rules;

- official system documentation (the rules of system, contracts and agreements concerning functioning of payment system, the business plan of the operator for the last 3 (three) years, the business continuity plan, applicable fares, etc.);

- the conclusions external (in the presence) and internal auditors by results of the last check of activities of the operator of system;

- results of the last IT audit;

- other information.

28. Within assessment the National Bank has the right to carry out:

- meetings with the operator guide of the estimated payment system, provider of critical services for discussion of current status of payment system / payment infrastructure, clarification of the arisen questions and/or to send the corresponding inquiries;

- multilateral negotiations, including negotiations in working groups and participation in committees/councils.

29. The National Bank carries out the analysis of compliance of functioning of providers of critical services to requirements of the legislation, to recommendations of National Bank and international standards for infrastructure of the financial market.

30. If the provider of critical services is not the subsupervising organization, the National Bank conducts assessment of such provider independently in case of direct interaction with provider of critical services and relevant organ of supervision.

31. The analysis of compliance to the principles is estimated on high-quality basis on 5-mark scale:

Point

Extent of respect for criterion

Description

5

It is observed

All revealed gaps and shortcomings in case of assessment do not belong to problematic issues and are the insignificant, managed questions which can be settled in the normal mode

4

It is generally observed

Assessment revealed one or several problematic issues which shall be resolved at the scheduled time and behind which it is necessary to continue control

3

It is partially observed

Assessment revealed one or several problematic issues which can become serious if are not immediately permitted. Special attention for the solution of these questions shall be paid

2

It is not observed

Assessment revealed one or several serious problematic issues requiring immediate actions, respectively, these issues shall be resolved first of all

1

It is not applicable

This principle is not applied to the specified type of the estimated payment system because of legal, institutional, structural or other characteristics of payment system

32. Results of assessment are reflected National Bank in the report with appendix of reasons for specific assessment. According to analysis results the conclusion about functioning of system and decision making prepares:

- about compliance of functioning of system to accepted standards and requirements of National Bank and preserving the operating level of functioning of system (assessment is higher 4);

- about need of modification of the estimated system for the purpose of increase in efficiency of its work, with inclusion of recommendations for achievement of full implementation of evaluation criteria and specifying of terms of their execution (assessment 3);

- about application of measures in relation to the estimated system and specifying of terms of their execution or about impossibility of further functioning of system (assessment 2).

33. The National Bank provides to the operator of payment service provider or provider of critical services the conclusion on analysis results and estimates, and also in case of detection of risks/violations/need of improvement of any processes and/or procedures directs the corresponding recommendations / instructions / requirements for the subsequent execution.

34. The operator of payment service provider or provider of critical services within 20 (twenty) working days from the date of receipt of the conclusion on analysis results and estimates, also recommendations/instructions/requirements for enhancement of system or elimination of discrepancies sends in National Bank for approval the actions plan on execution of recommendations/instructions/requirements for enhancement of system or elimination of discrepancies (further - the actions plan) according to Appendix 14 to these rules with indication of terms that demonstrates the consent of the operator of payment system and provider of critical services with analysis results and assessment.

35. After coordination with National Bank of the actions plan the operator of payment service provider or provider of critical services within 5 (five) working days sends to National Bank the approved actions plan with indication of approval date and the name of the body which approved it.

36. In case of disagreement with рекомендациями/предписаниями/требованиями on enhancement of system or elimination of discrepancies the operator of payment service provider or provider of critical services sends to National Bank the letter with indication of the specific reasons of disagreement according to each document no later than 7 (seven) working days from the date of receipt of documents.

37. The National Bank within 7 (seven) working days from the date of receipt of the corresponding letter from the operator of payment system or provider of critical services considers line item about disagreement with рекомендациями/предписаниями/требованиями on enhancement of system or elimination of discrepancies, and if necessary carries out with the operator of payment service provider or provider of critical services of meeting routinely or by means of video conferencing for the solution of matters of argument.

38. By results of discussions and consideration of line item of the operator of payment system and provider of critical services if necessary the National Bank has the right to correct recommendations/instructions/requirements for enhancement of system or elimination of discrepancies. Provision of the actions plan by the operator of payment system and provider of critical services is performed according to the terms specified in Items 34 and 35 of these rules.

39. The status report of execution of the actions plan shall be provided by the operator of the estimated system and provider of critical services quarterly to the 10th following reporting quarter in form according to Appendix 15 to these rules before elimination/execution of the recommendation/instruction/requirement.

40. The National Bank on the official website publishes information on results of implementation of supervision (oversight) and the analysis and efficiency evaluation of payment systems and provider of critical services in regular analytical reports in work of payment system of the Kyrgyz Republic, observing the necessary level of confidentiality.

Chapter 4. Measures for initiation of changes and enhancement of payment systems

41. In case of identification of shortcomings of activities of separate payment system by results of monitoring or the carried-out assessment which can lead to violation of the rights of consumers of this system or entail systemic risk in payment system of the Kyrgyz Republic, the National Bank informs the operator of payment system on these shortcomings and need of accomplishment of the following events:

- modification of rules, agreements and internal documents regarding functioning of payment system, payment infrastructure;

- modification of risk management system, including for ensuring smooth functioning of payment system / payment infrastructure;

- enhancement of information and communication technologies regarding ensuring information security and increase in safety in payment system / payment infrastructure;

- changes of mechanisms in payment system / payment infrastructure;

- remedial action in system operation;

- increases in level of financial condition of the operator of SZPS and ZPS and provider of critical services;

- other actions.

42. The National Bank sends the corresponding recommendations / instructions / requirements to the operator of payment service provider or provider of critical services.

43. Depending on the revealed risks and extent of their influence on payment system of the Kyrgyz Republic in general, and also in cases of failure to carry out of the decisions made by results of system assessment, the National Bank in coordination with other supervision bodies has the right to apply to the operator of system and to the subsupervising organization of corrective action according to the legislation of the Kyrgyz Republic.

44. The corrective actions prepared based on the analysis and assessment can be appealed according to the Provision "On Pre-judicial Regulation of Disputes between the National Bank of the Kyrgyz Republic and Commercial Banks, the Organizations Performing Separate Types of Banking Activities and Their Founders (Participants), Legal Entities and Physical Persons" approved by the resolution of Board of National Bank of May 17, 2017 No. 19/13.

45. The National Bank can take a legal action concerning the subsupervising organization for forced execution of the decision.

Appendix 1

to Rules of implementation of supervision (oversight) of payment system of the Kyrgyz Republic

Information on payments 

в__________________________________________________ on participants

(name of system and significant payment system)

for "___" _______________________ 20 __.

 

Name of the participant

Outgoing payments

Incoming payments

Number of payments

Amount of payments (one thousand som)

Number of payments

Amount of payments (one thousand som)

1

2

3

4

5

Participant 1

 

 

 

 

Participant 2

 

 

 

 

 

 

 

 

Participant of n

 

 

 

 

In total

 

 

 

 

 

Head

____________________

__________________________

 

 

(signature)

(FULL NAME)

 

 

 

 

 

Contractor

____________________

__________________________

___________________________

 

(signature)

(FULL NAME)

(ph., e-mail)

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