Visiting session of the Kyrgyz Republic Parliament Committee for economic and fiscal policy was held at the National Bank of the Kyrgyz Republic
Visiting session of the Kyrgyz Republic Parliament Committee for economic and fiscal policy was held at the National Bank of the Kyrgyz Republic at the initiative of the Chairman of the National Bank of the Kyrgyz Republic Mr. Tolkunbek Abdygulov.
Before the beginning of the session, the Head of the National Bank gave a tour around the National Bank to deputies. Then he told about the core activities and functions of the regulator, about monetary policy pursued by the National Bank.
Deputies of the Kyrgyz Republic Jogorku Kenesh (Parliament) and the National Bank of the Kyrgyz Republic discussed the situation at the foreign exchange market of the country. Mr. Tolkunbek Abdygulov noted that the currency rate is currently balanced and developing according to the market laws, global trends and the situation in Kyrgyzstan is not exceptional. He also noted that the National Bank would submit in near future regulatory legal acts to the Parliament. Those acts include draft laws "On amending the Code on administrative responsibility", which provides for increasing of penalty rates for breaking the banking legislation, particularly for license-free activity, and "On introduction of amendments and additions into certain legislative acts of the Kyrgyz Republic", which proposes to close exchange offices. The Head of the National Bank stated that commercial banks and microfinancial institutions, credit unions and special-purpose financial institutions shall preserve a right to commit exchange transactions and that functioning exchange office may transform into the abovementioned financial credit institutions.
As for the draft law on increasing of penalty rates for exchange office that broke the banking legislation, Mr. Tolkunbek Abdygulov mentioned that it was rejected in the third reading last year and the National Bank intended to submit the same to deputies for reconsideration. If the draft law is adopted, the amount of fines to be imposed on violators shall amount to 50-150 thousand KGS.
Besides it, the regulator is planning to keep on promoting the draft Bank Code of the Kyrgyz Republic according to the Head of the National Bank. "It has now become consolidated draft law "On National Bank, banks and baking activity". There is also a draft law "On Promulgation of the Law "On National Bank, banks and baking activity", which provides for amending the Civil Code and other laws as there are new chapters like "Protection of consumers", made changes according to Islamic financing principles and many other things", – stated Mr. Tolkunbek Abdygulov.
The Head of the National Bank added that the Bank would submit another several draft laws to the Kyrgyz Republic Parliament for consideration. Particularly he is referring to the draft Law "On amending of certain legislative acts of the Kyrgyz Republic", which implies amending of Laws "On license-authorization system of the Kyrgyz Republic" and "On bank secrecy". In addition the National Bank will initiate the Law "On introduction of amendments and additions into the Tax Code", a document intending to exempt from VAT while committing transactions with gold bullions. Equally important draft law to be submitted to the Kyrgyz Republic Parliament is the draft Law "On introduction of amendments and additions into certain legislative acts of the Kyrgyz Republic", which implies amending of Laws "On the National Bank", "On banks and banking activity in the Kyrgyz Republic" and "On payment system". The given draft law should be adopted to improve the payment system of the Kyrgyz Republic.
During the visiting session, the Chairman of the National Bank noted that the low level of the population’s financial literacy remains as a major issue. The member of the Parliament Mrs. Elvira Surabaldieva interested what work was being done by the National Bank to solve the issue of poor financial literacy of the population, particularly of people living in remote regions of the country with no access to modern mass media including to Internet.
Mr. Tolkunbek Abdygulov underlined it to be an individual type of work being currently done by the National Bank. "Unfortunately, our population does not still believe in banks and keep their money at home. 60 billion KGS out of 68 billion KGS of the Kyrgyzstan monetary base are beyond the banking system. They should be attracted to banks. The National Bank issued an alphabet for children. Besides, financial illiteracy abatement program was completed last week. The document has been sent to the KR Parliament. We are planning to introduce a special subject on financial literacy into the school curriculum as a part of the program. The National Bank is planning to bear a part of textbooks’ costs; the remained part shall be paid by commercial banks. We also established a special department for consumer protection in the structure of the National Bank. There is acting a "Finsabat" website, which was specially created by the National Bank and contains text information, teaching video lectures, clips, articles and many other things", – replied the Head of regulator.
During the visiting session, the Deputy Mr. Dastan Bekeshov suggested that the Bank should actively develop mobile banking, as it may make the population life simpler. Mr. Tolkunbek Abdygulov answered that banks were already developing that field; particularly certain financial institutions launched mobile purses. However, absence of physical infrastructure, automatic teller machines, terminals that should be imported from abroad, is a big obstacle in development of the mobile banking. Commercial banks are currently engaged in purchasing and installation of relevant equipment. Until the process is completed, there is no sense to promote these products.
