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RESOLUTION OF BOARD OF NATIONAL BANK OF THE KYRGYZ REPUBLIC

of December 28, 2009 No. 51/4

About approval of the Instruction for determination of standards of sufficiency (adequacy) of the capital of the banks performing transactions according to the Islamic principles of banking and financing

(as amended on 15-09-2021)

Within implementation of the Laws of the Kyrgyz Republic "About entering of amendments into the Law of the Kyrgyz Republic "About banks and banking activity in the Kyrgyz Republic" of March 28, 2009 No. 93 and "About entering of amendments into the Law of the Kyrgyz Republic "About National Bank of the Kyrgyz Republic" of March 28, 2009 No. 94, according to 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 for determination of standards of sufficiency (adequacy) of the capital of the banks performing transactions according to the Islamic principles of banking and financing it (is applied).

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

3. After official publication to 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 management of methodology of supervision and licensing to bring this resolution to the attention of commercial banks.

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

Chairman

M. Alapayev

Approved by the Resolution of Board of National Bank of the Kyrgyz Republic of December 28, 2009 No. 51/4

The instruction for determination of standards of sufficiency (adequacy) of the capital of the banks performing transactions according to the Islamic principles of banking and financing

1. General provisions

1. Ceased to be valid according to the Order of the Government of the Kyrgyz Republic of 31.05.2017 No. 21/11

2. The purpose of this Instruction is establishment of standards of sufficiency (adequacy) of the capital of Islamic bank, and also features of calculation of coefficients of sufficiency (adequacy) of the capital of the bank having "Islamic window".

3. The capital of bank is ensuring profitable and strong rise, the guarantor of customer confidence to bank and forms basis for covering of the potential losses inherent in banking.

4. The capital is the means protecting from consequences of excessive risk situations and insolvency (insolvency) of bank. The bank needs to have the adequate capital capable to cover possible losses and losses without threat of approach of condition of insolvency. The size of the capital shall be adequate to the increasing amount of the banking activities performed according to the Islamic principles of banking and financing, integrated to high risk.

2. Standards of sufficiency (adequacy) of the capital of Islamic banks

5. Minimum size of the capital:

a) the minimum size of the authorized capital for the Islamic banks which are again opened in the Kyrgyz Republic (including branches of foreign banks);

b) own (regulating) capital is the capital of the first level taking into account deductions, the stipulated in Item 19-1 this Instruction.

6. The coefficients of sufficiency (adequacy) of the capital of Islamic bank based on weighing on risk degree of the balance sheet assets placed according to the Islamic principles of banking and financing (further - assets), and the off-balance obligations assumed by bank according to the Islamic principles of banking and financing (further - off-balance obligations):

a) coefficient of sufficiency of total (adequacy) of the capital (K2.1) of Islamic bank shall be at least 12%. It is determined as the relation of the net total capital to the amount of the balance sheet assets and off-balance obligations weighed on risk degree (minus the assets weighed on risk, financed by the funds raised under the agreement limited mudaraba) minus special reserves on covering of potential losses and losses. The net total capital is determined as capital sum of the first level and the capital of the second level;

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