RESOLUTION OF BOARD OF NATIONAL BANK OF THE KYRGYZ REPUBLIC

of December 28, 2016 No. 51/1

About approval of the Provision "About the Corrective Actions Applied to Operators of Payment System / to Payment Institutes"

According to articles 7 and 43 of the Law "About National Bank of the Kyrgyz Republic" Board of National Bank of the Kyrgyz Republic decides:

1. Approve the Provision "About the Corrective Actions Applied to Operators of Payment System / to Payment Institutes" it (is applied).

2. Declare invalid the resolution of Board of National Bank "About approval of the Provision "About Corrective Actions, Applied to Operators Payment Systems / to Payment Institutes" of February 24, 2016 No. 10/7.

3. To legal management:

- publish this resolution on the official site of National Bank of the Kyrgyz Republic;

- after official publication to send 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.

4. This resolution becomes effective after fifteen days from the date of official publication.

5. To management of payment systems to bring this resolution to the attention of structural divisions of National Bank of the Kyrgyz Republic, regional managements, representative offices of National Bank in Batken Province, operators of payment systems and payment institutes and commercial banks of the Kyrgyz Republic.

6. To impose control of execution of this resolution on the vice-chairman of National Bank of the Kyrgyz Republic L.Dzh. To Orozbayev.

Appendix

to the Resolution of Board of National Bank of the Kyrgyz Republic of December 28, 2016 No. 51/1

Regulations on the corrective actions applied to operators of payment systems / to payment institutes

Chapter 1. General provisions

1. Ceased to be valid according to the Resolution of Board of National Bank of the Kyrgyz Republic of 08.06.2017 No. 2017-P-14/23-12-(PS)

2. This Provision determines corrective actions, procedure for application of corrective actions to operators of payment systems (except banks and other financial credit institutions), to payment institutes which perform the activities in the territory of the Kyrgyz Republic according to the legislation of the Kyrgyz Republic.

3. Corrective actions are applied by National Bank of the Kyrgyz Republic (further - National Bank) according to the procedure, stipulated by the legislation the Kyrgyz Republic and this Provision.

4. The purpose of application by National Bank of corrective actions is protection of interests of users of payment systems, maintenance and ensuring efficiency, safety and reliability of payment systems, counteraction of legalization (washing) of the criminal income and to financing of terrorist or extremist activities.

5. The National Bank has the right to apply corrective actions to operators of payment systems / to payment institutes in cases:

- violations of the law of the Kyrgyz Republic;

- counteractions when implementing of supervising functions by National Bank;

- implementation of the dummy and doubtful activities which do not have real covering which are forbidden according to the legislation on counteraction of legalization (washing) of the criminal income and financing of terrorist or extremist activities of the Kyrgyz Republic;

- action or failure to act of operators of payment systems / payment institutes which involve threat to interests of participants and users of payment systems,

- systematic provision (two and more times during 12 (twelve) consecutive calendar months) the untimely/wrong / doubtful / distorted / incomplete reporting and/or other information in National Bank;

- delays of the beginning of activities as the operator of payment system / payment institute more than for 1 (one) from the moment of licensing.

6. The National Bank has the right to direct the prevention according to the procedure of informing the operator of payment system / payment institute that they break certain regulations and rules or are engaged in the activities menacing to safety and reliability of payment system and also for the purpose of the prevention that further adequate measures of impact can be applied to them. The prevention is not corrective action.

Chapter 2. Corrective actions and their application

7. This Provision determines the following corrective actions applied to operators of payment systems / to payment institutes:

- instruction;

- temporary suspension or restriction for carrying out separate payment types and transactions within the license;

- revocation of license.

The National Bank has the right to apply penalty to operators of payment systems / to payment institutes for the administrative offense including revealed during inspection checks, according to the procedure, provided according to the Instruction for hearing of cases about administrative offenses in the sphere of the bank law approved by the resolution of Board of National Bank of August 26, 2015 No. 49/9.

8. Corrective actions are applied depending on situation, complexity and gravity of violation and consequences to users and members of payment service providers. In case of application of corrective actions their priority and the sequence is not provided.

9. The decision on application of adequate measures of impact is made by Committee on payment system of National Bank.

10. The instruction about elimination of the revealed violations goes to certain time to operators of payment systems / to payment institutes in cases:

- non-presentations of the financial reporting or other reporting determined by regulatory legal acts of National Bank, the conclusion of the external auditor and applications to it in installed by National Bank terms;

- provisions in несвоевременной/неправильной/недостоверной/искаженной/неполной National Bank of information, including during conducting inspection checks;

- lack of the technical documents supporting the hardware and software;

- counteractions when implementing by the staff of National Bank of supervising functions;

- violations of the bank law of the Kyrgyz Republic.

11. The decision on temporary suspension or restriction for carrying out separate payment types and transactions within the license is accepted depending on nature and extent of violation.

12. The decision on temporary suspension of the license is applied in any of cases:

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