ORDER OF THE GOVERNMENT OF THE KYRGYZ REPUBLIC

of November 25, 2010 No. 298

About approval of the Regulations on procedure for selection of agent banks for payment of compensations to investors in case of approach of warranty case

According to the Law of the Kyrgyz Republic "About protection of bank deposits (deposits)" the Government of the Kyrgyz Republic decides:

1. Approve Regulations on procedure for selection of agent banks for payment of compensations to investors in case of approach of warranty case.

2. This resolution becomes effective from the date of its official publication.

Approved by the Order of the Government of the Kyrgyz Republic of November 25, 2010 No. 298

Regulations on procedure for selection of agent banks for payment of compensations to investors in case of approach of warranty case

I. General provisions

1. This Provision determines the procedure of selection of agent banks (further - selection) through which the Agency on protection of deposits of the Kyrgyz Republic (further - the Agency) can perform payment of compensations to investors in case of approach of warranty case.

2. In this Provision the determinations stated in the Law of the Kyrgyz Republic "About protection of bank deposits (deposits)" are used.

II. Procedure for selection

3. In case of approach of warranty case by the Board of directors of the Agency the Contest committee on selection of agent banks (further - the Contest committee) is created into which 5 people enter:

1) two representatives of Supervisory body (further - the Board of directors) the Agencies, where one - from the Ministry of Finance of the Kyrgyz Republic who on position is the chairman of the Contest committee and another - the representative from National Bank of the Kyrgyz Republic (further - NBKR) who on position is the vice-chairman of the Contest committee;

2) two representatives from the Agency;

3) one representative of management of banking supervision of NBKR;

4. Selection of agent banks is performed by the direction to the operating banks of the letter notification on the beginning of carrying out selection.

5. Participating banks within 3 days from the date of receipt of the notification on the beginning of carrying out selection shall submit the application for participation in selection to the Agency.

6. Selection of one or several agent banks is carried out by the Contest committee according to the requirements provided by this Provision.

7. For one warranty case one agent bank is selected, in case of approach of several warranty cases several agent banks are selected.

8. Several agent banks can be also selected in case of approach of warranty case in bank, microfinance company, the housing and savings credit company if:

1) there is wide branch network in all regions of the Kyrgyz Republic;

2) large number of investors and one agent bank will not be able to pay compensations to investors at the scheduled time.

9. The contest committee within 3 days from the date of the end of submission of requests considers requests from among the banks given banks on participation in selection in the form established by the Agency (appendix 1 to this provision) following the results of which 3 most suitable banks are selected.

10. The offer of bank on the best organization of payments of compensations to bank depositors, microfinance company, the housing and savings credit company concerning which there came the warranty case will be additional criterion for selection of agent bank.

11. Following the results of selection the Contest committee submits for approval to the Board of directors of the Agency one or several suitable candidacies of banks.

12. Winners of selection can be recognized from one to three banks with which the agreement on payment procedure of compensations to investors and provision of reports (appendix 2 to this provision) is signed.

13. The board of directors of the Agency can recognize tender cancelled, in case of discrepancy to the additional requirements established by National Bank of the Kyrgyz Republic for determination of the winner of selection.

14. The message on results of selection goes to the bank approved by the Board of directors of the Agency the winner no later than 3 days.

15. The agency no later than 7 days before start date of payment procedure of compensation publishes in publication in the state and official languages legal address and arrangement of agent bank, date, time, form and procedure of compensation payments. This information also shall be published in the state and official languages in the republican newspaper and is placed in case of entrance to the central (head) office of agent bank and bank, microfinance company, housing and savings credit company concerning which there came the warranty case, including their branches, savings banks.

16. The payment for participation in selection is not levied and the Agency does not compensate the costs of banks connected with implementation of payment of compensations to investors.

III. Requirements to agent banks

17. For participation in selection the bank shall meet the following requirements:

1) to be participating bank of system of protection of deposits;

2) to have the adequacy of the capital and level of equity meeting the requirements of National Bank of the Kyrgyz Republic;

3) within the last 6 months before date of approach of warranty case the corrective actions provided by the Law of the Kyrgyz Republic "About National Bank of the Kyrgyz Republic, banks and banking activity" were not applied to it;

4) shall have the branch network comparable to geographical structure of the guaranteed deposits, for carrying out compensation payments;

5) shall conform to the additional requirements established by National Bank of the Kyrgyz Republic.

IV. Final provisions

18. Agent banks place at the central offices, including branches and savings banks, information on form and procedure of compensation payments.

19. The relations of the Agency and agent bank which are not settled by this Provision are regulated by the current legislation of the Kyrgyz Republic.

Appendix No. 1

The application for participation in selection of agent banks for payment of compensations to investors in case of approach of warranty case

Present ________________________________________________________

(bank name, complete bank details)

on behalf of ____________________________________________________________,

(Full name position)

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