of November 27, 2013 No. 45/13
About approval of the Provision "About Procedure for Carrying Out the Kyrgyz Republic of Credit Auctions by National Bank for the purposes of Refinancing and Maintenance of Liquidity"
According to articles 7 and 43 of the Law of the Kyrgyz Republic "About National Bank of the Kyrgyz Republic", the Board of National Bank of the Kyrgyz Republic decides:
3. To legal management to publish this resolution on the official site of National Bank of the Kyrgyz Republic.
5. After official publication to send to Legal management this resolution to the Ministry of Justice of the Kyrgyz Republic for inclusion in the State register of regulatory legal acts of the Kyrgyz Republic.
6. To management of monetary transactions to bring this resolution to the attention of commercial banks.
7. To impose control of execution of this resolution on the vice-chairman of National Bank of the Kyrgyz Republic Abdybala tegin Page.
Approved by the Resolution of Board of National Bank of the Kyrgyz Republic of November 27, 2013 No. 45/13
1. This Provision determines procedure for provision by National Bank of the Kyrgyz Republic (further - National Bank) to the commercial banks (further - Banks/banks) performing the activities based on the license of National Bank, borrowing facilities on auction basis for the purposes of refinancing and maintenance of liquidity.
2. The National Bank carries out credit auctions according to Articles 18, 25 and 53 Laws of the Kyrgyz Republic "About National Bank of the Kyrgyz Republic, banks and banking activity" for the purpose of realization of monetary policy of National Bank.
3. The purpose of carrying out credit auctions is provision to Banks for certain term of credit resources for the purposes of refinancing and maintenance of short-term bank liquidity.
4. Credit resources are provided for the term determined by Board of National Bank. Conditions of provision and amounts of borrowing facilities are determined by the decision of Committee of monetary control of National Bank (further - KDKR).
5. Participants of credit auctions are National Bank, on the one hand, and the Banks conforming to the requirements established by this Provision and regulatory legal acts of National Bank, on the other hand.
6. The general agreement about credit auction (further - the General agreement) the agreement signed between National Bank and Bank determining general terms and procedure for provision by National Bank of credit resources to Bank on refinancing and maintenance of liquidity following the results of credit auction and procedure for regulation of the legal relationship arising at the same time. The general agreement is signed in the form specified in Appendix 1 to this Provision and in case of compliance of Bank to the conditions specified in Item 29 of this provision.
7. The pledge agreement - the agreement signed between National Bank and Bank within the General agreement following the results of credit auction based on which the obligation of Bank on return of borrowing facilities is provided with pledge. The agreement determines conditions and procedure for provision of mortgage providing and is integral part of the General agreement.
8. The Committee of Monetary Control (CMC) - collegiate organ of National Bank which purpose of activities is development and operational decision making on the current liquidity management.
9. Credit auction is method of carrying out transactions of refinancing by National Bank in national currency with use of the auction mechanism, under mortgage providing.
10. Credit resources - the money in som provided by National Bank to Bank on the terms of urgency, the paid nature and recoverability on fixed interest rate, under mortgage providing.
11. The credit agreement - the agreement signed between National Bank and Bank within the General agreement following the results of credit auction and based on which the National Bank grants to Bank the loan. The agreement determines conditions of provision and procedure for loan repayment and is integral part of the General agreement.
12. The nominal percentage rate is the rate specified in the credit agreement between the borrower and Bank according to which the amount of interest income of Bank paid by the borrower for use of borrowing facilities is calculated. At the same time the nominal interest rate shall include all commissions, charges or other additional payments, including taxes which directly and/or indirectly can influence excess of the specified nominal interest rate in value term.
13. Loan term - and finishing the period expressed in calendar days and calculated since day of issuance of credit with day of complete obligation fulfillment on the credit, inclusive, and specified in the credit agreement.
14. Cutting off rate - rate on which the satisfaction of requests comes to an end.
15. Operational day - according to regulations of operational day of National Bank during period of time from 8:30 till 16:30 each working day.
16. The credit resources issued by National Bank for the purposes of refinancing have purpose and shall be used by Bank on crediting in national currency of the projects performed in the territory of the Kyrgyz Republic by the legal entities and physical persons which are residents of Kyrgyzstan in the following directions:
- the industry, at the same time eskportooriyentirovanny and import-substituting industries are priority;
- agricultural industry, procurements and conversion, including:
- livestock production;
- crop production;
- transport, communication and service industry;
- trade and commerce;
- tourist sphere.
Loan granting on the consumer purposes, including on improvement of housing conditions of the borrower, and also on other purposes which do not have commercial/production character is not allowed.
17. Banks shall use the credit resources received from National Bank within credit auctions on crediting of projects according to the conditions and the directions specified in Provision Item 16. At the same time credit resources shall be provided to the borrower of Bank with execution of the corresponding credit agreement in which specific conditions of issuance of credit will be stipulated: amount, loan term, interest rate, repayment provisions of the main amount and percent on the credit, etc. Conditions of the credit agreement shall conform to all requirements of the Provision and the General agreement.
18. The term of provision of credit resources by National Bank for the purposes of refinancing is determined by Board of National Bank.
19. As mortgage providing for the credit resources issued by National Bank for the purposes of refinancing the assets specified in Item of 41 this provision can act.
20. The nominal annual interest rate on the credits issued by Bank at the expense of credit resources of National Bank shall not exceed the interest rates determined by KDKR which are brought to the attention of Banks.
At the same time the Bank in case of issuance of credit at the expense of means of National Bank has no right to charge/charge from the borrowers the fees, charges or other additional payments, including taxes which will influence directly and/or indirectly excess of the specified nominal interest rate in value term, i.e. on the amount paid by the borrower of Bank except penalties for non-execution of credit obligations by borrowers that shall be stipulated in contracts with borrowers. Responsibility for the correct calculation and application of interest rate shall be assigned to Bank according to the agreement on provision of borrowing facilities.
22. The term of provision of credit resources by National Bank on maintenance of bank liquidity is determined by Board of National Bank.
23. As mortgage providing for the credit resources issued by National Bank for liquidity maintenance the assets specified in Item of 41 this provision except for of pledge of the rights of requirements for credit portfolio can act.
24. The bank has no right to use the credit resources received from National Bank for carrying out transactions in the interbank market, the foreign exchange market and the security market, including the market of Government securities, and also for carrying out transactions with persons or affiliates connected with Bank. The bank shall use the received credit resources of National Bank only on the purposes stipulated in Items 16, of 21 this provision.
25. The bank has the right to use the credit resources received on credit auction for the subsequent crediting of non-bank financial credit institutions, such as microfinance companies and the microcredit companies, according to the conditions specified in Item 26 of this provision.
26. If credit resources go Bank for crediting of NFKO, designated in Item 25 of this provision, following provisions shall be observed:
- Banks in day of provision of credit resources NFKO in writing notify on it National Bank with provision of the copy of the credit agreement signed between Bank and NFKO;
- The margin of Bank by provision of credit resources NFKO shall not exceed the size established by KDKR which is brought to the attention of Banks;
- The credit agreement between Bank and NFKO shall contain the following items:
the credit resources provided by NFKO Bank shall have purpose and NFKO on crediting of the projects performed in the territory of the Kyrgyz Republic by the legal entities and physical persons which are residents of Kyrgyzstan in the directions and conditions specified in Item 16 of this provision shall be used and also to answer the purpose specified in article 2 of the Law of the Kyrgyz Republic "About the microfinancial organizations in the Kyrgyz Republic";
the restrictions on use of the credit resources provided by NFKO Bank, specified in Item 17 and 24 of this provision also extend to NFKO;
loan interest rates, the issued NFKO at the expense of credit resources of National Bank shall answer the purpose and requirements specified in the Law of the Kyrgyz Republic "About the microfinancial organizations in the Kyrgyz Republic" and also other regulatory legal acts of the Kyrgyz Republic;
NFKO has no right to use the credit resources received from Banks for refinancing of non-bank financial credit institutions, including credit unions, microfinance companies, the microcredit companies and the mikrocreditny agencies and other NFKO, including pawnshops.
- Within 30 (thirty) calendar days from the date of loan granting, NFKO shall place the money received from Bank among the borrowers. In case of not use completely or partial use of credit resources in the terms specified in this Item, NFKO shall return ahead of schedule undeveloped part of credit resources to Bank the next working day after the expiration of fixed term;
- In the period of credit effective period the money which arrived from borrowers of NFKO in repayment of the credits obtained by them at the expense of the means issued within credit auctions further shall be placed by NFKO among the clients with the subsequent provision in National Bank of the report on placement to the 5th day of the next month.
NFKO shall place, the means extinguished by borrowers, within a month, following the accounting period. If NFKO did not place means among the clients according to this Item, NFKO shall return to Bank all amount of not placed means after the expiration of fixed terms of placement.
27. NFKO which received credit resources from Banks shall submit on monthly basis the report on use of credit resources and on condition of credit portfolio in National Bank according to required format.
28. As mortgage providing for the credit resources issued by Bank for NFKO the assets specified in Item 44 this provision can act.
- have the license of National Bank for the right of carrying out banking activities in national and/or foreign currency;
have the account of "depot" in Depositary for storage and accounting of the securities which are mortgage providing the credit resources provided by National Bank;
have correspondent account in national currency in National Bank;
have the signed Agreement on opening and servicing of deposit accounts in foreign currency for mortgage providing in National Bank of the Kyrgyz Republic (if as mortgage providing the non-cash foreign currency in the form of the rights of requirements of money acts);
have available the General agreement signed with National Bank about credit auction;
carry out economic standard rates on adequacy of the capital of Bank and by the maximum extent of risk on one borrower, established by National Bank, at the time of application and not have systematic violations within prior six months;
provide the sufficient mortgage providing meeting the requirements established by this Provision and other regulatory legal acts of the Kyrgyz Republic;
- not be in the special mode. The bank which is in the special mode can participate in credit auction on maintenance of liquidity on the security of securities and/or non-cash foreign currency in the form of the rights of requirements of the money which is on the interest-free deposit account in National Bank in the presence of the relevant decision of Board of National Bank;
- not have overdue monetary commitments before National Bank on the obtained credits and percent on them, and also not to have undeveloped credit resources on the credits which are earlier obtained or being in process of obtaining following the results of credit auctions, including, on other instruments of refinancing of National Bank;
not be discharged of the participation right on credit auctions;
provide in National Bank the list of responsible persons of Bank with specimen signatures, authorized to sign from bank name of the request for receipt of credit resources;
provide two cards of specimen signatures of persons in National Bank, representatives to dispose of the means which are on bank accounts, the legislations of the Kyrgyz Republic certified notarially according to requirements;
provide in National Bank the power of attorney from bank name to person responsible for receipt of bank statements, payment orders of Bank and other documents;
- not have restrictions or prohibition on implementation of separate types of banking activities: attraction of deposits from physical persons, opening of settlement accounts to physical persons and legal entities, crediting;
- have level not lower than 3 on the rating CAMELS system and/or not lower than 3 on rating system risk - the oriented supervision.
30. KDKR on periodic basis determines parameters, conditions and method of carrying out credit auction, including amounts, limiting nominal interest rate for final borrowers of Bank, and the maximum amount of one request, requirement to mortgage providing, industry orientation of the credit.
31. The National Bank, not later than two days before holding the auction, publishes on the official website of National Bank parameters and conditions of carrying out credit auction, including:
holding the auction method;
date of auction;
amount of credit resources;
the auction minimum interest rate (established by the decision of KDKR);
the minimum amount of one request (in case of establishment of KDKR);
requirements to mortgage providing;
other data on auction (in case of availability of those).
32. The application for participation in credit auction of National Bank is submitted by Banks to National Bank in documentary type according to appendix form 2 to the General agreement about credit auction. The request shall be sealed in opaque envelope. The bank can submit only one application for auction. The decision of authorized body of Bank on participation in credit auction and provision of mortgage providing with appendix of the list of mortgage providing on the credit shall be attached to the auction participation application.
33. The application of Bank shall be submitted to National Bank till 12:00 in the afternoon of holding the auction. After approach of time of the end of order taking Banks cannot give/change requests. At the same time requests are considered as irrevocable.
34. Each page of the request shall be certified by the signature of person, to sign the representative from bank name of the request for receipt of credit resources, and seal of Bank. The request without fail shall contain date of application, the bank name, code and date of auction, required amount of borrowing facilities, the offered interest rate, the amount and type of mortgage providing.
35. The amount of the request of Bank shall correspond to the minimum and maximum amount established in parameters of credit auction.
36. The request in documentary type shall be lowered in box with text "For requests for credit auctions", located on the first floor of the building of National Bank, at the address: Bishkek, Prospekt Chui, 168. The bank shall register the application fact in the magazine of registration of requests with indication of date and time of application.
37. Requests of Banks with interest rate above or the equal minimum interest rate announced by National Bank are allowed to credit auction.
38. Discrepancy of Bank to requirements of Item 29 of this provision is the basis for refusal in provision to Bank of required credit amount. The National Bank in writing notifies Banks whose requests were not allowed to auction, about the reasons of their not admission in time, no later than the next working day after holding the auction.
39. The requests completed or which are drawn up incorrectly, and also transferred with violation of time of order taking are recognized invalid and are not allowed to auction.
40. The National Bank provides confidentiality of the data specified in the request of Bank.
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