of December 15, 1998 No. 34/3
About Regulations on the credit of final instance
Having considered the project of the Regulations on the credit of final instance developed for the purpose of unconditional accomplishment of the deposit liabilities by commercial banks in national currency. The board of National Bank of the Kyrgyz Republic decides:
1. Approve Regulations on the credit of final instance taking into account the stated notes and offers and to enact since December 15, 1998.
2. To approve the size of loan interest rate of final instance in the amount of equal 0.8 from discount rate of NBKR calculated on annual basis on date of issue of each tranche.
3. To management of monetary transactions to explain and bring the accepted "Provision on the credit of final instance" and the approved size of interest rate for this credit to data of commercial banks.
4. Consider since December 15, 1998 invalid the "Regulations on Extraordinary crediting" approved by the Resolution of Board of NBKR No. 12/2 of June 4, 1995.
5. Control, behind execution of this Resolution to assign to the vice-chairman Abdumanapov E. S.
Chairman of the board
M. A. sultans.
Approved by the Resolution of Board of National Bank of the Kyrgyz Republic No. 34/3 of December 14, 1998
1.1. The credit of final instance is applied in exceptional cases, in case of exhaustion by commercial banks of all available means and opportunities of maintenance of the minimum level of liquidity.
1.2. Granting this loan, the National Bank of the Kyrgyz Republic (NBKR) realizes the function of the last resort lender for the purpose of prevention of systemic risk, preserving banking system stability and protection of household deposits in national currency.
1.3. The loan of final instance is granted to the problem bank performing actions for financial improvement, at the same time, under problem bank for the purpose of realization of this Provision, the bank in which are established is understood:
- the facts of violations in activities of bank connected with inability of administration to ensure functioning of bank according to the bank law, involvement of bank in unhealthy banking practice (problem with management);
- violations of the economic standard rate of adequacy of the capital of the first level by bank;
- the unprofitable activities of bank which resulted it in inability to fulfill obligations to clients.
1.4. The decision on loan granting of final instance and determination of type of its mortgage providing is accepted by Board of NBKR.
1.5. The loan interest rate of final instance is established by Board of NBKR and can be as necessary changed.
2.1. Necessary condition of receipt of the Credit of final instance is accomplishment of the following requirements by Borrowing bank:
- complete realization, available quick assets of Borrowing bank, with condition of the first-priority offer to their National Bank, and only in case of refusal NBKR - realization in the market;
- realization of the available highly liquid pledges and availability of the program of realization of liquid pledges on not returned credits;
- zero foreign exchange position at the time of issuance of credit and for the period before its complete repayment;
- concentration of all means of Borrowing bank on correspondent account in NBKR;
- development and acceptance by the Board of directors of the program of financial improvement of Borrowing bank and the program of loan repayment of final instance approved by Management of banking supervision of NBKR;
- Provision of whenever possible liquid mortgage providing;
- other additional terms determined by Board of NBKR.
2.2. The compulsory provision for receipt of the Credit of final instance is, introduction in Borrowing bank of temporary administration of NBKR or other type of control over the implementation of actions for its financial improvement and target use of means of the Credit of final instance. Expense reduction, including reduction of wages. At the same time it is determined that the borrowing bank cannot assume new obligations (interbank credits, deposits, etc.) without the consent of NBKR.
2.3. The loan of final instance is granted in national currency of the Kyrgyz Republic, for the term which is not exceeding six months.
2.4. The loan is granted on the terms of urgency, recoverability, the paid nature and security.
2.5. For action of the Credit of final instance powers of borrowing bank as Primary dealer in the security market, and also the bank is excluded from clearing settlement system on account transactions can stop and is transferred on them to grossovy settlement system without collection of service fee in NBKR.
3.1. Pledge in type can act as loan security of final instance: gold and other affined precious metals in standard and measuring ingots, the Government securities of the Kyrgyz Republic, fixed assets of bank and other types of providing acceptable for NBKR.
3.2. The pledged property shall belong to borrowing bank on the property right and not to be encumbered with other obligations.
3.3. Market value of pledged property, shall be not lower than the amount of the required credit, including the amount of the added percent for the expected period of its use.
3.4. The procedure of the address of collection and realization of the property transferred in quality of providing (pledge) is established by pledge agreements and supplementary agreements to them.
4.1. For receipt of the Credit of final instance the Bank shall provide the following documents in Management of banking supervision of NBKR:
1) the petition for loan granting of final instance, with reasons for need of this type of loan, including the program of financial improvement of bank;
2) the report on fulfillment of requirements, specified in Item 2.1. this provision;
4.2. Management of banking supervision provides for consideration of Board of NBKR information on financial condition of bank, its role in system of commercial banks of the republic, the conclusion about opportunity and need of provision to it the Credit of final instance and the available mortgage providing.
4.3. In case of the positive decision according to the petition of Borrowing bank, UDKO notifies him on it and suggests to sign the credit agreement and the pledge agreement according to appendix 1 and 2 to this Provision.
4.4. For issuance of credit of final instance, the special account can be opened for borrowing bank in NBKR.
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