RESOLUTION BOARD OF NATIONAL BANK OF THE KYRGYZ REPUBLIC

of October 14, 2009 No. 41/4

About the Instruction "About procedure for observance of limits of open foreign exchange position and open line item in precious metals the banks performing transactions according to the Islamic principles of banking and financing

Having considered the draft of the Instruction "About procedure for observance of limits of open foreign exchange position and open line item in precious metals the banks performing transactions according to the Islamic principles of banking and financing", being guided by articles 7 and 43 of the Law of the Kyrgyz Republic "About National Bank of the Kyrgyz Republic" the Board of National Bank of the Kyrgyz Republic decides:

1. Approve the Instruction "About procedure for observance of limits of open foreign exchange position by the banks performing transactions according to the Islamic principles of banking and financing" according to appendix to this resolution.

2. This resolution becomes effective after one month after official publication.

3. Send to legal department 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.

4. To impose control of execution of this resolution on the vice-chairman of National Bank of the Kyrgyz Republic Bokontayev K. K.

Approved by the Resolution of Board of National Bank of the Kyrgyz Republic of October 14, 2009 No. 41/4

The instruction "About procedure for observance of limits of open foreign exchange position and open line item in precious metals the banks performing transactions according to the Islamic principles of banking and financing"

I. General provisions

1.1. Ceased to be valid according to the Resolution of Board of National Bank of the Kyrgyz Republic of 31.05.2017 No. 21/11

1.2. The purpose of this Instruction is determination of procedure of payments of open line item and control of observance of limits of open foreign exchange position and open line item in precious metals (further - open line item) the Islamic banks and banks having "Islamic window" (further - banks), having the license of National Bank of the Kyrgyz Republic (further - National Bank) on implementation of foreign currency transactions and on the right of carrying out banking activities with precious metals.

For goal achievement and accomplishment of tasks of the Board of National Bank National Bank the separate resolution can change values of the limits of open line item set in this Instruction to limited term.

1.3. In case of development of domestic policy and control procedures of currency risks and risks on transactions with precious metals the bank shall be guided by the requirements of this Instruction, standards of Sharia and accounting standards and the reporting approved by the Organization of financial accounting and audit for Islamic financial institutions (AAOIFI).

1.4. For the purpose of this Instruction the following determinations are applied:

The currency risk is risk of receipt of losses by bank owing to change in value of requirements (assets)/obligations of bank expressed in foreign currency in case of adverse change of the currency rate while the bank has open foreign exchange position on this currency. The foreign exchange position arises when implementing currency transactions and is exponent of exposure of bank to currency risk.

Currency transactions are the transactions connected with exchange, purchase/sale (converting) of foreign currency and also other transactions as a result of which the amount of requirements (assets) or obligations expressed in foreign currency changes.

The net line item is difference between requirements (assets) and obligations of bank, both balance sheet, and off-balance, in separate foreign currency and by each type of precious metal separately (gold, silver), except for numismatical (collection) coins.

The open line item is discrepancy of requirements (assets) of bank in foreign currency / type of precious metal and obligations of bank in the same foreign currency / in the same type of precious metal, and in case of equality the line item is considered closed.

On each foreign currency and by each type of precious metal the open line item is calculated separately.

The opened line item jar can be long (in case of excess of requirements (assets) of bank in the corresponding currency / the corresponding type of precious metal over its obligations in the same currency / the same type of precious metal), or short (in case of excess of obligations over requirements (assets). The long position registers with the sign "+", short - with sign" -".

The total line item is the amount of all net line items of bank on all foreign currencies or types of precious metals calculated with use of the "short hand" method determined in item 2.5 of this Instruction.

Limits of open line items are the restrictions set by National Bank expressed in percentage terms open line items (on each foreign currency / by each type of precious metal and total) to the net total capital of bank. Limits of open line items are calculated as a percentage with rounding to two decimal signs after comma.

The net total capital of bank is calculated according to requirements of regulatory legal acts of National Bank.

For the purpose of this Instruction when calculating limits of open line items value of the net total capital of bank as of the 1st day of every month is used.

Date of the conclusion of the transaction is date of achievement by agreement parties on the main terms of transaction (currency types, the exchange rate, the amounts of means, value date, type, mass of precious metal, etc.).

Value date is date in which there is transfer of funds for accounts of participants of the transaction.

II. Procedure of payments of open line items

2.1. At the end of each operational day the bank shall calculate the following indicators:

- net foreign exchange positions on each foreign currency;

- total foreign exchange position;

- net line items by each type of precious metals;

- total line item in precious metals.

2.2. Net line items are calculated separately on each foreign currency and type of precious metal as the amount of the following indicators:

- net spot line item in foreign currency / type of precious metal on the transactions performed by bank according to the Islamic principles of banking and financing. This size is calculated as difference between balance sheet assets and book commitments, including incomplete spot contracts with value date to 2 (two) days. Calculation is made on net book value of assets and liabilities;

Disclaimer! This text was translated by AI translator and is not a valid juridical document. No warranty. No claim. More info