RESOLUTION OF BOARD OF NATIONAL BANK OF THE REPUBLIC OF KAZAKHSTAN

of November 25, 2011 No. 185

About approval of Rules of determination of aggregative indicator and the maximum size of ratio of total amount of the forgiven bad debt on the credits to aggregative indicator, procedure for determination of settlement indicator and its size, the bases and procedure for forgiveness of bad debt and introduction of amendments to the resolution of Board of the Agency of the Republic of Kazakhstan on regulation and supervision of the financial market and the financial organizations of December 25, 2006 No. 296 "About approval of Rules of classification of assets, contingent obligations and creations of provisions (reserves) against them"

According to the Law of the Republic of Kazakhstan of July 21, 2011 "About modification and amendments in some legal acts of the Republic of Kazakhstan on the tax matters" the Board of National Bank of the Republic of Kazakhstan decides:

1. Approve the enclosed Rules of determination of aggregative indicator and the maximum size of ratio of total amount of the forgiven bad debt on the credits to aggregative indicator, procedure for determination of settlement indicator and its size, the bases and procedure for forgiveness of bad debt.

2. Ceased to be valid according to the Resolution of Board of National Bank of the Republic of Kazakhstan of 27.05.2013 No. 137

3. This resolution becomes effective after ten calendar days after day of its first official publication. Item 1 of this resolution extends to the relations which arose since January 1, 2011 and is effective till December 31, 2012.

Approved by the resolution of Board of National Bank of the Republic of Kazakhstan of November 25, 2011 No. 185

Rules of determination of aggregative indicator and the maximum size of ratio of total amount of the forgiven bad debt on the credits to aggregative indicator, procedure for determination of settlement indicator and its size, the bases and procedure for forgiveness of bad debt

Action of these rules extends to the relations which arose since January 1, 2011 Rules of determination of aggregative indicator and the maximum size of ratio of total amount of the forgiven bad debt on the credits to aggregative indicator, procedure for determination of settlement indicator and its size, the bases and procedure for forgiveness of bad debt are effective till December 31, 2012

1. These rules are developed according to the Law of the Republic of Kazakhstan of July 21, 2011 "About modification and amendments in some legal acts of the Republic of Kazakhstan on the tax matters" and establish procedure for determination of aggregative indicator and the maximum size of ratio of total amount of the forgiven bad debt on the credits to aggregative indicator, procedure for determination of settlement indicator and its size, and also the basis and procedure for forgiveness of bad debt by banks of the second level and the organizations performing separate types of banking activities (further - bank).

2. For the purposes of these rules the bad debt is understood as the debt on the credit determined as hopeless according to the Rules of classification of assets, contingent obligations and creations of provisions (reserves) against them approved by the resolution of Board of the Agency of the Republic of Kazakhstan on regulation and supervision of the financial market and the financial organizations of December 25, 2006 No. 296 (registered in the Register of state registration of regulatory legal acts at No. 4580) (further - Rules No. 296).

The bad debt does not join the debt provided by bank to the interconnected parties or the third parties according to obligations of the interconnected parties determined according to the Code of the Republic of Kazakhstan of December 10, 2008 "About taxes and other obligatory payments in the budget" (Tax code) (further - the Tax code).

3. The maximum size of ratio of total amount of the forgiven bad debt on the credits to aggregative indicator is equal to 0,1 coefficient.

The aggregative indicator is equal to the amount outstanding (for the beginning of calendar year) principal debt on the issued credits which are subject to classification according to Rules No. 296.

On acceptance date the bank of the decision on forgiveness of bad debt does not allow excess of settlement indicator over ten percent from equity of the bank determined according to the Instruction about normative values and the technique of calculations of prudential standard rates for banks of the second level approved by the resolution of Board of the Agency of the Republic of Kazakhstan on regulation and supervision of the financial market and the financial organizations of September 30, 2005 No. 358 (registered in the Register of state registration of regulatory legal acts at No. 3924) for the beginning of calendar year.

4. The basis for forgiveness of bad debt to the borrower will be one of the following cases:

1) excess of the expected expenses of bank connected with collection of bad debt over the size of debt or providing or other property of the borrower;

2) the termination (write-off) of the obligation on repayment of the loan in case of sale of pledged property which completely provided primary obligation on the date of the conclusion of the mortgage agreement from the biddings extrajudicially at the price is lower than the amount of primary obligation according to the Law of the Republic of Kazakhstan of December 23, 1995 "About mortgage of real estate" on the amount of pledged property of the credit, outstanding after sale;

3) application by bank to the borrower and (or) the third party bearing joint or subsidiary liability with the borrower of the following measures for debt collection if the forgiven bad debt constitutes the size of excess of bad debt over the amount of providing or other property of the borrower and (or) property of the third party bearing joint or subsidiary liability with the borrower (except as specified restructurings of loan and (or) carrying out concerning the borrower of rehabilitation procedures):

removal at consideration of authorized body of bank of question of application of measures concerning the borrower. Decision making about application of measures is performed according to Rules about domestic credit policy of bank;

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