RESOLUTION OF BOARD OF NATIONAL BANK OF THE REPUBLIC OF BELARUS

of September 28, 2006 No. 137

About approval of the Instruction about standard rates of safe functioning

Based on paragraphs of the twenty seventh and twenty eighth of Article 26, of Article part four paragraph two 34, 39, of Articles 111-117 and part six of article 122 of the Bank code of the Republic of Belarus the Board of National Bank of the Republic of Belarus DECIDES: Article parts one

1. Approve the Instruction about standard rates of safe functioning it (is applied).

2. When calculating banks, "Development Bank of the Republic of Belarus" open joint stock company (further – JSC Development Bank), the non-bank credit and financial organizations of the Republic of Belarus of the assets and liabilities which are not reflected in balance sheet accounts according to the Instruction about standard rates of safe functioning (further – the Instruction) it is necessary to carry banks of the Russian Federation to banks of the group "C" if they have the following ratings:

"Moody" s Investors Service" – long-term rating from Vaa1 to B3;

"Fitch" – long-term rating from BBB+ to B–;

"Standard&Poor" s" – long-term rating from BBB+ to B–.

3. The subordinated credits (loans, deposits) attracted according to the agreements signed before entry into force of this resolution join in calculation of the normative capital of bank, non-bank credit and financial organization according to the procedure, established by the Instruction, before expiration of agreements or before introduction of changes in them and (or) amendments.

After introduction of amendments and (or) amendments to the specified agreements the subordinated loans (loans) attracted according to them join in calculation of the normative capital of bank, non-bank credit and financial organization on condition of reduction of contracts in compliance with requirements of the Instruction.

4. Grant the right to the Chairman of the board of National Bank to increase to bank, JSC Development Bank, the non-bank credit and financial organization the size of standard rates of restriction of currency risk no more than in time 1,5 on condition of observance by bank, JSC Development Bank, non-bank credit and financial organization within the last twelve months of the standard rates of safe functioning established by National Bank of the Republic of Belarus.

5. To provide to structural divisions of central office of National Bank of the Republic of Belarus till December 1, 2006 reduction in compliance with this resolution of regulatory legal acts of National Bank of the Republic of Belarus.

6. From the resolution of Board of National Bank of the Republic of Belarus of December 29, 2005 No. 185 "About replacement of foreign currency cash in authorized capitals of banks of the Republic of Belarus Belarusian rubles" (2006, No. 19, 8/13800) Item 5 to exclude the national register of legal acts of the Republic of Belarus.

7. Recognize invalid:

the resolution of Board of National Bank of the Republic of Belarus of June 28, 2004 No. 92 "About approval of the Instruction about economic standard rates for banks and the non-bank credit and financial organizations" (The national register of legal acts of the Republic of Belarus, 2004, No. 121, 8/11272);

the resolution of Board of National Bank of the Republic of Belarus of November 18, 2004 No. 173 "About entering of amendments and changes into resolutions of Board of National Bank of the Republic of Belarus of June 28, 2004 No. 92 and of August 26, 2004 No. 135 (The national register of legal acts of the Republic of Belarus, 2004, No. 191, 8/11726);

the resolution of Board of National Bank of the Republic of Belarus of December 21, 2004 No. 187 "About procedure for entry into force of part five of Item 5 of the Instruction on economic standard rates for banks and the non-bank credit and financial organizations, introduction of amendments to the resolution of Board of National Bank of the Republic of Belarus of June 28, 2004 No. 92 and approval of form of the reporting" (The national register of legal acts of the Republic of Belarus, 2005, No. 4, 8/11873);

the resolution of Board of National Bank of the Republic of Belarus of June 30, 2005 No. 92 "About modification and amendments in some regulatory legal acts of National Bank of the Republic of Belarus concerning regulation of activities of banks and non-bank credit and financial organizations" (The national register of legal acts of the Republic of Belarus, 2005, No. 120, 8/12902);

the resolution of Board of National Bank of the Republic of Belarus of October 5, 2005 No. 146 "About modification and amendments in the Instruction about economic standard rates for banks and the non-bank credit and financial organizations" (The national register of legal acts of the Republic of Belarus, 2005, No. 173, 8/13276);

the resolution of Board of National Bank of the Republic of Belarus of January 31, 2006 No. 16 "About modification and amendments in resolutions of Board of National Bank of the Republic of Belarus of June 28, 2004 No. 92 and of August 26, 2004 No. 135" (The national register of legal acts of the Republic of Belarus, 2006, No. 38, 8/13964);

the resolution of Board of National Bank of the Republic of Belarus of June 15, 2006 No. 88 "About modification of the Instruction about economic standard rates for banks and the non-bank credit and financial organizations" (The national register of legal acts of the Republic of Belarus, 2006, No. 103, 8/14602).

8. This resolution becomes effective since January 1, 2007, except for Item 5, which becomes effective from the date of inclusion of this resolution in the National register of legal acts of the Republic of Belarus.

 

Approved by the Resolution of Board of National Bank of the Republic of Belarus of September 28, 2006 No. 137

The instruction about standard rates of safe functioning

Section I. General provisions

Chapter 1. Terms and determinations

1. This Instruction establishes standard rates of safe functioning for the banks, "Development Bank of the Republic of Belarus" open joint stock company and the non-bank credit and financial organizations registered in the territory of the Republic of Belarus (further, unless otherwise specified, – banks, JSC Development Bank, the non-bank credit and financial organizations), single method of calculation of the normative capital, assets and liabilities, the extent of risk, technique of assessment of accomplishment of the standard rates of safe functioning established for banks, JSC Development Bank, the non-bank credit and financial organizations and also procedure of banking supervision (further – supervision) behind accomplishment of standard rates of safe functioning by banks, JSC Development Bank, the non-bank credit and financial organizations.

2. For the purposes of this Instruction the terms below and determinations are used in the following values:

2.1. credit debt - the debt (except for debts of other banks, JSC Development Bank, the non-bank credit and financial organizations) which resulted from loan granting, means according to repo transactions, issues (sale) of bills of exchange with payment deferral, implementation of finance lease (leasing), factoring, execution by bank, JSC Development Bank, non-bank credit and financial organization of the issued obligations for the third parties and also on other active transactions subject to credit risk;

2.2. the client (partner) - the legal entity, its branches, representations, physical person, including the individual entrepreneur with which bank, JSC Development Bank, the non-bank credit and financial organization perform banking and other activities;

2.2-1. the partner on contingent obligations - face who as a result of execution by bank, JSC Development Bank, the non-bank credit and financial organization of contingent obligation becomes:

in cases if according to the legislation and (or) terms of the contract (agreements) obligation fulfillment before bank, JSC Development Bank, the non-bank credit and financial organization is unconditional and irrevocable, - the debtor of bank, JSC Development Bank, non-bank credit and financial organization proceeding from terms of the contract (agreements);

in cases if several persons, liable jointly and severally on obligation fulfillment before bank, JSC Development Bank, the non-bank credit and financial organization become debtors of bank, JSC Development Bank, the non-bank credit and financial organization, - one of debtors determined by bank, JSC Development Bank, the non-bank credit and financial organization in the procedure established by he (she) according to the legislation;

in cases if several persons bearing subsidiary responsibility on obligation fulfillment to bank, JSC Development Bank, the non-bank credit and financial organization - the primary debtor according to the legislation and (or) terms of the contract (agreements) become debtors of bank, JSC Development Bank, the non-bank credit and financial organization.

In cases if according to the legislation and (or) terms of the contract (agreements) execution by the debtor of bank, JSC Development Bank, non-bank credit and financial organization of obligations to bank, JSC Development Bank, non-bank credit and financial organization is performed after obligation fulfillment before the debtor by the third parties under partners of bank, JSC Development Bank, the non-bank credit and financial organization these third parties are understood;

2.2-2. systemically significant borrower - the legal entity (except for republican state bodies, National Bank, banks, the non-bank credit and financial organizations, JSC Development Bank) who is the client (partner) of bank which cumulative outstanding amount before bank and other banks of the Republic of Belarus constitutes 10 and more percent in the aggregate normative capital of banks of the Republic of Belarus;

2.3. warranty obligations - obligations to make payments in case of non-execution by the client of bank, JSC Development Bank, the non-bank credit and financial organization of the obligations to other creditors, including obligations on guarantees and guarantees, the obligations following from acceptances, avals, endorsements;

2.3-1. the encumbered assets - means (except for transferred according to the repo transaction) in banks, JSC Development Bank, the non-bank credit and financial organizations, securities (except for sold according to the repo transaction), the credit debt and other assets concerning which according to conditions of prisoners bank, JSC Development Bank, the non-bank credit and financial organization of transactions the partner or the third parties have or in the cases and procedure provided by the concluded bargains will acquire the right of alienation of the specified assets without the consent of bank, JSC Development Bank, the non-bank credit and financial organization, except as specified collections of payment (remuneration, the commission) for the services rendered according to the agreement on placement of the corresponding asset;

2.4. international financial institutions and development banks - Bank for International Settlements, International Monetary Fund, European Central Bank, European Union, European Stability Mechanism (ESM), European Financial Stability Facility (EFSF), International Bank for Reconstruction and Development (IBRD), International Finance Corporation (IFC), Multilateral Investment Guarantee Agency (MIGA), International Development Association (IDA), Asian Development Bank (ADB), African Development Bank (AfDB), European Bank for Reconstruction and Development (EBRD), Inter-American Development Bank (IADB), European Investment Bank (EIB), European Investment Fund (EIF), Nordic Investment Bank (NIB), Caribbean Development Bank (CDB), Islamic Development Bank (IDB), Council of Europe Development Bank (CEDB), International Finance Facility for Immunization (IFFIm), Asian Infrastructure Investment Bank (AIIB), Eurasian Development Bank (EDB), Interstate bank;

2.5. the concept "financial instrument" matters, determined by the National accounting standard 32 "Financial instruments: submission of information" (NSFO 32) approved by the resolution of the Board of directors of National Bank of the Republic of Belarus of December 27, 2007 No. 406;

2.6. the derivative financial instrument - the derivative security and (or) other financial instrument of which acquisition of right and (or) establishment of obligation on purchase or sale of underlying asset are result. Money, securities, other currency values, precious metals, interest rates, credit resources, the stock indexes, the standardized services, goods and other assets which are subject of the transactions made in the territory of the Republic of Belarus and (or) beyond its limits can be underlying assets of the derivative financial instrument;

2.7. the concepts "fair value", "hedging", "efficiency of hedging" and "hedging instrument" have the values determined by the National accounting standard 39 "Financial instruments: recognition and assessment" (NSFO 39) for banks approved by the resolution of the Board of directors of National Bank of the Republic of Belarus of December 29, 2005 No. 422;

2.8. trade portfolio - set of line items on financial instruments which refrain for the purpose of short-term (up to one year) sales, profit earnings from short-term price fluctuations and also for the purpose of hedging of change in value of financial instruments or future cash flows on them, do not contain any conditions limiting their purchase and (or) sale and are carried at fair value. The trade portfolio can join line items on the financial instruments which are not containing any conditions limiting their purchase and (or) sale. The financial instruments sold according to repo transactions are included trade portfolio as long positions (the requirement to the issuer of financial instruments) at fair value if at the time of sale they were in structure of trade portfolio. If the financial instruments sold according to repo transactions at the time of sale were not in structure of trade portfolio, they are not included trade portfolio and on them the credit risk concerning the issuer is calculated. The financial instruments acquired according to repo transactions are not included trade portfolio;

2.9. retail portfolio - set of assets (requirements) and (or) obligations of bank, JSC Development Bank, non-bank credit and financial organization for provision of the money meeting at the same time following conditions:

partners are physical persons, including individual entrepreneurs;

the cumulative size of assets (requirements) and (or) obligations for provision of money for one partner shall not exceed according to the initial agreement(s) (to the additional agreement(s) to it (it) the amount equivalent to 125 thousand Belarusian rubles;

the cumulative size of assets (requirements) and (or) obligations for provision of money for one partner shall not exceed according to the initial agreement(s) (to the additional agreement(s) to it (it) 0,5 of percent of the total value of retail portfolio calculated on the amount of all agreements.

Concerning partners - the physical persons who are not individual entrepreneurs the retail portfolio joins debt and (or) obligations on provision of money on the credits for consumer needs and overdraft crediting;

2.10. precious metals - gold, silver, platinum, palladium in the form of bank ingots, measuring ingots and coins.

Bank ingots - the gold bars, silver, platinum and palladium corresponding to the technical regulations or state standards on gold, silver, platinum and palladium existing in the territory of the Republic of Belarus in ingots or to requirements of the London association of participants of the market of precious metals (LBMA), or the London market of platinum and palladium (LPPM).

Measuring ingots - gold bars, silver, the platinum conforming to standards of the state - producer of ingots;

2.11. line item - the size of requirements or obligations for the financial instrument, foreign currency, precious metal, goods or other asset;

2.12. long position - requirements (or right to claim) on financial instruments, foreign currency, precious metal, delivery of goods or other asset. The long position has positive sign ("+");

2.13. short position - obligations on transfer of the financial instrument, foreign currency, precious metal, delivery of goods or other asset. The short position has negative sign ("-");

2.14. net line item - the line item determined as difference between long and short positions;

2.15. gross - line item - the amount of all line items without line item sign;

2.16. open line item - line item in case of which the amount of requirements and the amount of obligations do not match;

2.17. the closed line item - line item in case of which the amount of requirements and the amount of obligations match;

2.18. the weighed line item - the line item increased by the corresponding risk degree;

2.19. debt instruments:

bonds with fixed or floating interest rate;

deposit certificates;

savings certificates;

mortgage bonds;

bills of exchange;

securities which can be exchanged for the securities specified in paragraphs by second or pole of this subitem;

inconvertible preferred shares;

other similar securities which price depends on changes of the size of interest rate;

derivative financial instruments which underlying asset are the securities specified in this subitem, and also interest rates or percentage indexes;

2.20. equity instruments:

shares (except for inconvertible preferred shares);

depositary receipts;

securities which can be exchanged for the securities specified in paragraphs second and third this subitem;

other similar securities which price depends on the changes in price of equity instruments;

derivative financial instruments which underlying asset are the securities specified in this subitem and also the stock indexes;

2.21. the interconnected requirements and obligations - requirements and obligations (except for security deposit of money, other methods of ensuring obligation fulfillment of the client (partner), the guarantor (guarantor) which owing to terms of the contract (agreements) and (or) legislations are interconnected in such a way that need of return of the raised funds and (or) execution of other obligations there comes for bank, JSC Development Bank, the non-bank credit and financial organization only on condition of execution of his (her) relevant requirements in the amount sufficient for execution of the specified obligations, and correspond to the following conditions:

the possibility of agreement cancelation and (or) return of borrowed funds ahead of schedule at the initiative of the initial creditor is not provided in the agreements connected with attraction by bank, JSC Development Bank, the non-bank credit and financial organization of money;

the term which remained before return by bank, JSC Development Bank, non-bank credit and financial organization of borrowed funds exceeds repayment period (return) of assets and (or) residual effective period of contingent obligations;

the currency of the requirement matches currency of the obligation or bank, JSC Development Bank, the non-bank credit and financial organization performs hedging of risk of change in the exchange rate of currency of the requirement in relation to obligation currency;

the initial creditor according to the legislation of the country of its location (residence) performs risk assessment according to the corresponding transactions for the purpose of calculation of capital adequacy, large risks and creation of reserves on covering of possible losses (if similar requirements to it are established by the legislation) concerning the final debtor and does not perform concerning bank, JSC Development Bank, the non-bank credit and financial organization;

obligation fulfillment of bank, JSC Development Bank, non-bank credit and financial organization before the initial creditor is not provided with security deposit of money, transfer on the initial creditor (or according to its order (order) on the third party) title on property, including on property rights, pledge of property, guarantee, the guarantee and (or) different ways of ensuring obligation fulfillment, except for transfers to providing requirements of bank, JSC Development Bank, the non-bank credit and financial organization interconnected with these obligations;

in case of default the final debtor of requirements of bank, JSC Development Bank, non-bank credit and financial organization within 90 days from the moment of maturity by agreements provides concession of these requirements to the initial creditor and (or) the procedure of the termination of the relevant interconnected requirements and obligations of bank, JSC Development Bank, non-bank credit and financial organization during the next 90 days. At the same time the concession of the requirement shall not provide discount. For the purposes of this paragraph discount is understood as difference between the amount of requirements to the debtor and the amount of the transferred (yielded) requirements to the initial creditor;

the bank, JSC Development Bank, the non-bank credit and financial organization have no obligations on return of borrowed funds, interest payment for use of them and other payments if only he (she) did not receive (did not receive) from the final debtor the corresponding payments in the amount sufficient for their execution;

the bank, JSC Development Bank, the non-bank credit and financial organization have no obligations on compensation of losses (expenses) and (or) payment of penalty (penalty, penalty fee) to the initial creditor (or according to its order (order) to the third party) in case of non-execution, untimely or incomplete execution by the final debtor of requirements of bank, JSC Development Bank, the non-bank credit and financial organization;

the final debtor and the initial creditor shall not match in one person.

The specified requirements and obligations do not join in calculation of standard rates of liquidity, sufficiency of the normative capital, the maximum extent of risk on one debtor (group of the interconnected debtors), the total size of large risks, the maximum extent of risk on one insider and persons interconnected with it, the total size of risks on insiders and persons interconnected with them, the maximum extent of risk on the means placed in the countries which are not entering into the group "A".

Requirements of bank, JSC Development Bank, the non-bank credit and financial organization to other bank, JSC Development Bank, the non-bank credit and financial organization which can be acknowledged according to this subitem the obligations interconnected with requirements to the third party are taken into consideration of standard rates of safe functioning as requirements to this third party.

For the purposes of this subitem the final debtor is understood as the party concerning which the bank, JSC Development Bank, the non-bank credit and financial organization has requirements interconnected with obligations of bank, JSC Development Bank, non-bank credit and financial organization thus as it is provided by part one of this subitem. For the purposes of this subitem the initial creditor is understood as the party concerning which the bank, JSC Development Bank, the non-bank credit and financial organization has obligations interconnected with requirements of bank, JSC Development Bank, non-bank credit and financial organization thus as it is provided by part one of this subitem;

2.22. No. 735 is excluded according to the Resolution of Board of National Bank of the Republic of Belarus of 11.12.2015

2.23. the principle of conservatism - respect for care in case of application of the judgments necessary for the implementation of estimates of current status of the normative capital of bank, JSC Development Bank, the non-bank credit and financial organization, his (her) risks, assets, obligations and transactions which are not reflected in balance in the conditions of uncertainty so that the indicators characterizing accomplishment of standard rates of safe functioning were estimated from line items of the greatest risk accepted by bank, JSC Development Bank, the non-bank credit and financial organization;

2.24. risk size (credit, operational, market) - quantitative assessment of possible losses (losses) as a result of its realization;

2.25. the countries of the group "A" - the countries having the following ratings established by the below-specified rating agencies and published in their editions, and also posted on their official sites on the global computer Internet (further - ratings):

"Moody" s Investors Service" - long-term rating from Aaa to Aa3;

"Fitch" - long-term rating from AAA to AA-;

"Standard&Poor" s" - long-term rating from AAA to AA-;

2.26. the countries of the group "B" - the countries having the following ratings:

"Moody" s Investors Service" - long-term rating from A1 to A3;

"Fitch" - long-term rating from A+ to A-;

"Standard&Poor" s" - long-term rating from A+ to A-;

2.27. the countries of the group "C" - the countries having the following ratings:

"Moody" s Investors Service" - long-term rating from Baa1 to Vaa3;

"Fitch" - long-term rating from BBB+ to BBB-;

"Standard&Poor" s" - long-term rating from BBB+ to BBB-;

2.28. the countries of the group "D" - the countries having the following ratings:

"Moody" s Investors Service" - long-term rating from Ba1 to B3;

"Fitch" - long-term rating from BB+ to B-;

"Standard&Poor" s" - long-term rating from BB+ to B-;

the countries which do not have rating;

2.29. the countries of the group "E" - the countries having the following ratings:

"Moody" s Investors Service" - long-term rating is lower than B3;

"Fitch" - long-term rating is lower than B-;

"Standard&Poor" s" - the long-term rating is lower than B-;

2.29-1. international banks of development of group "A" - international banks of development, except for listed in subitem 2.4 of this Item, having following ratings:

"Moody" s Investors Service" - long-term rating from Aaa to Aa3;

"Fitch" - long-term rating from AAA to AA-;

"Standard&Poor" s" - long-term rating from AAA to AA-;

2.29-2. international banks of development of the group "B" - international banks of development, except for listed in subitem 2.4 of this Item, having following ratings:

"Moody" s Investors Service" - long-term rating from A1 to A3;

"Fitch" - long-term rating from A+ to A-;

"Standard&Poor" s" - long-term rating from A+ to A-;

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