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.
Operation of this Law extends to creditors - physical persons and legal entities irrespective of the patterns of ownership issuing loans and the credits on credit under percent, performing financing with markup, falling under determination of usurious activities, except for credits/financing, provided according to the Law of the Kyrgyz Republic "About consumer loan".
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 percentage rates / markups judicially shall not contradict 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, markup on financing.
For the purpose of this Law the following concepts are used:
1) high percent / markup - value of percentage rate / markup (in annual, nominal percentage rate), equal or exceeding maximum permissible percent / markup;
2) 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;
3) the borrower - the physical person or legal entity which received at the creditor cash and/or appliances by means of the credit, loan, financings on the terms of recoverability and the paid nature;
4) the credit - the money provided by the creditor to the borrower in the amount of and on the conditions provided by the agreement which the borrower shall return and pay percent on them;
5) the creditor - the physical person or legal entity providing to the borrower cash and/or appliances by means of the credit, loan, financings on the terms of recoverability and the paid nature;
6) maximum permissible percent / markup - the size of interest rate for loan granting and loan, the markups (in the annual, nominal percentage rate) on financing issued by persons specified in article 1 of this Law established according to the procedure, provided by this Law which excess is not recognized the state;
7) 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 percent / markup for use specified cash and/or appliances;
8) usurious interest rates - interest rates for the credit agreement or the loan agreement, and also markup (in annual, nominal percentage rate) under the agreement of financing in the amount of, exceeding maximum permissible percent / markup;
9) usury - provision cash and/or appliances on credit, I will jam, financing under high percent / markup;
10) financing - provision of money, goods or services by one party (creditor) to other party (borrower) on the basis of the contractual relations corresponding to the Islamic principles of financing.
1. The borrower's relations with the creditor are performed on the basis of the credit agreement or the loan agreement, the agreement of financing (in paper or electronic type) according to requirements of the civil legislation.
2. The main conditions of contracting parties, that is 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; markups on financing; the size of percentage rate / markup 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.
1. The size of maximum permissible percent / markup is calculated proceeding from the weighted nominal interest rate determined by National Bank of the Kyrgyz Republic to which 12 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 operating credits/financing of the banks and other financial credit institutions 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 website.
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/financing shall not exceed 20 percent from the amount of the issued credit or loan/financing if other is not established by the bank law for persons under surveillance to National Bank of the Kyrgyz Republic of persons.
5. In case of determination judicially of outstanding amount of the borrower on percent according to the credit agreement or the loan agreement, markup on the agreement of financing the court applies the maximum permissible percent / markup determined according to this Law for date of the conclusion of the agreement if more low interest rate on the credit or loan/markup under the agreement of financing is not established by the credit agreement or the agreement the loan/agreement of financing.
The National Bank of the Kyrgyz Republic has the right to apply corrective actions according to the bank law of the Kyrgyz Republic to persons under surveillance to National Bank of the Kyrgyz Republic of persons if the credit agreement / agreement of financing determines the rate/markup size (in annual, nominal percentage rate) above maximum permissible percent.
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