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RESOLUTION OF COMMITTEE ON SUPERVISION OF NATIONAL BANK OF THE KYRGYZ REPUBLIC

of December 25, 2008 No. 27/3

About approval of Recommendations about standardization of the credits issued on acquisition of ready housing

(as amended on 23-11-2016)

Having considered the project "Recommendations about standardization of the credits issued on acquisition of ready housing", being guided by Item 2 of the Provision "About Committee on Supervision of National Bank of the Kyrgyz Republic", the Committee on supervision of National Bank of the Kyrgyz Republic decides:

1. Approve "Recommendations about standardization of the credits issued on acquisition of ready housing" it (is applied).

2. This resolution becomes effective from the moment of its signing.

3. To management of methodology of supervision and licensing to bring this resolution to the attention of commercial banks.

4. To impose control of execution of this resolution on the head of department of methodology of supervision and licensing Davlesov A. N.

Chairman of Committee

K. Bokontayev

Approved by the Resolution of Committee on supervision of National Bank of the Kyrgyz Republic of December 25, 2008 No. 27/3

Recommendations about standardization of the credits issued on acquisition of ready housing

I. General provisions

1.1. Recommendations about standardization of the credits issued on acquisition of ready housing (further - Recommendations) are developed according to the Civil code of the Kyrgyz Republic, "About National Bank of the Kyrgyz Republic", "About banks and banking activity in the Kyrgyz Republic" and other regulatory legal acts of the Kyrgyz Republic.

1.2. Recommendations are developed for the purpose of decrease in credit risk of the commercial banks and other financial credit institutes licensed and regulated by National Bank of the Kyrgyz Republic (further - banks) when implementing transactions on issuance of credits on acquisition of ready housing (further - the credit), including unification of parameters of such credits, ensuring transparency of the market of the housing credits for potential borrowers and investors.

1.3. These Recommendations cover only necessary minimum of recommendations about standardization of the credits issued on acquisition of ready housing. Banks have the right, assuming as a basis these Recommendations, to introduce more strict additional requirements to credit risk management in case of issuance of credit on purchase of housing.

At the same time within implementation of the state programs developed and approved by the Government of the Kyrgyz Republic and aimed at creating favorable conditions for the population on acquisition of ready housing, banks can establish other requirements in accordance with the terms of the program and assessment of the risks (coefficients, etc.). These risks shall be reflected in domestic policy and procedures, including, according to requirements of regulatory legal acts of National Bank. Banks bear responsibility for proper identification, assessment and management of the risks, including credit risk.

1.4. For the purpose of these Recommendations the following concepts are used:

The credit is the money provided by bank to the borrower according to the credit agreement for acquisition in property of the borrower of real estate - ready housing on the terms of target use, urgency, the paid nature, recoverability and security. At the same time, as the main ensuring obligation fulfillment on the credit the acquired real estate shall act.

The credit agreement - the agreement based on which the bank shall provide money (credit) 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 having full legal capacity namely, capability the actions to acquire and perform the civil laws, to create civil obligations and to perform them in full with which the credit agreement on acquisition of the ready housing which is subject to pledge as ensuring obligation fulfillment on the credit is signed.

Solvency of the borrower - the borrower's capability timely and completely to fulfill the financial liabilities following from the conclusion of the credit agreement.

Underwriting - process of assessment of solvency of the client, probability of return by them of the credit, and also costs and conditions of the pledged property.

Credit history - set of credit information on the borrower which characterizes execution by the borrower of the assumed liabilities according to earlier signed credit agreements and is kept in the special organizations rendering services in forming, processing and storage of credit stories, and also in provision of credit reports and the accompanying services.

The independent appraiser - the physical, legal entity having the certificate issued by independent self-regulatory organization; having the corresponding preparation, experience, qualification; bearing responsibility for reliability and justification of the performed real estate value assessment.

Pledge is method of ensuring execution of the cash or expressed in cash obligation on the security of the property right to real estate - ready housing.

The pledger - person having the property right regarding pledge. Both the borrower, and the third party in relation to the obligation provided with pledge can be the pledger. At the same time, the real estate pledged as ensuring obligation fulfillment on the credit remains at the borrower in its ownership and use.

The pawnbroker (creditor) - the bank, whose requirements for primary obligation are provided with pledge.

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