LAW OF THE KYRGYZ REPUBLIC

of July 24, 2013 No. 163

About restriction of usurious activities in the Kyrgyz Republic

Accepted by Jogorku Kenesh of the Kyrgyz Republic on June 20, 2013

This Law determines the basic principles of state policy in the field of restriction of usurious activities in the Kyrgyz Republic and the legal basis of establishment of restriction.

Article 1. Coverage of this Law

Operation of this Law extends to creditors - the physical persons and legal entities (irrespective of patterns of ownership) issuing loans and the credits on credit under percent, falling under determination of usurious activities.

Article 2. Legislation of the Kyrgyz Republic on restriction of usurious activities and sphere of its application

1. The legislation of the Kyrgyz Republic on restriction of usurious activities is based on the Constitution, the Civil code, this Law and other regulatory legal acts of the Kyrgyz Republic.

2. The regulations of the legislation of the Kyrgyz Republic concerning questions of restriction of interest rates judicially shall not contradict this Law.

Article 3. Purpose of this Law

The purpose of this Law is consumer protection - borrowers by means of ensuring fair determination of the size of interest rates of loans and credits.

Article 4. The main terms and concepts used in the Law

For the purpose of this Law the following concepts are used:

the maximum permissible percent is according to the procedure, established by this Law, the size of interest rate for loan granting and the loans issued by persons specified in article 1 of this Law is higher than which is not recognized the state;

high percent - interest rate the size from maximum permissible annual interest rate and above;

loan - type of the obligations relations owing to which one party (creditor) transfers to the possession to other party (borrower) cash and/or appliances and the borrower shall return to the creditor the same size cash and/or appliances with interest payment or without those;

the credit is the money provided by the creditor to the borrower in the amount of and on the conditions provided by the agreement, and the borrower shall return the received sum of money and pay percent on it;

the borrower - the physical person or legal entity which received at the creditor cash and/or appliances on means of the credit, loan on the terms of recoverability and the paid nature;

the creditor - the physical person or legal entity providing to the borrower cash and/or appliances by means of the credit, loan on the terms of recoverability and the paid nature;

usury - provision cash and/or appliances on credit, I will jam under high percent;

usurious activities - activities of physical persons and legal entities for provision cash and/or appliances under the agreement on the basis of urgency, recoverability and the paid nature, providing at the same time in the agreement high interest for using specified cash and/or appliances;

usurious interest rates - interest rates for the credit agreement or for the loan agreement in the amount of, exceeding maximum permissible percent.

Article 5. The borrower's relations with the creditor

1. The borrower's relations with the creditor are performed on the basis of the credit agreement or the loan agreement (in writing) according to requirements of the civil legislation.

2. The main conditions of contracting parties, i.e. the subject of the agreement are provided in the agreement; rights, obligations and responsibility of the parties; conditions and payment procedure of percent on the credit, loan; the size of interest rate only in annual basis; rates and/or rates for carrying out transactions; procedure for introduction of amendments to the agreement; terms; sanctions for failure to carry out, untimely accomplishment of terms of the contract; other conditions by agreement of the parties.

Article 6. Restriction of interest rates

1. The size of maximum permissible percent is calculated proceeding from the weighted nominal interest rate determined by National Bank of the Kyrgyz Republic to which 15 percent are added.

The size of maximum permissible annual effective interest rate of loan of pawnshop is calculated proceeding from the weighted nominal interest rate determined by National Bank of the Kyrgyz Republic to which 12 percent are added.

2. The weighted nominal interest rate for the operating credits of the banks and other financial credit institutes licensed and regulated by National Bank of the Kyrgyz Republic is calculated National Bank of the Kyrgyz Republic on semi-annual basis and is published on its official site.

The method of calculation of weighted average rate of percent is determined by National Bank of the Kyrgyz Republic.

3. In case of usurious activities in case of non-execution of obligations of the borrower to the creditor withdrawal of mortgage property of the borrower is made exclusively judicially.

4. In case of determination of cash and/or material obligations of the borrower to the creditor the penalty size (penalties, penalty fee) added for the entire period of action of the credit or loan shall not exceed 20 percent from the amount of the issued credit or loan.

5. If the credit agreement or the loan agreement determines the size of rate of less maximum permissible percent, the court considers within the rate specified in the agreement if the credit agreement or the loan agreement determines the size of more maximum permissible percent, the court considers within only in the amount of maximum permissible percent.

Article 7. Entry into force of this Law

1. This Law becomes effective after fifteen days from the date of official publication.

2. To the government of the Kyrgyz Republic and National Bank of the Kyrgyz Republic in three-months time to bring the regulatory legal acts into accord with this Law.

3. Operation of this Law extends to the relations between the creditor and the borrower on outstanding loans and loans which arose before introduction of this Law in action.

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