Registered in the Ministry of Justice of the Kyrgyz Republic
as of August 23, 2004. Registration number 93-04
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Approved by Resolution No. 18/1 of the National Bank of the Kyrgyz Republic Board as of July 21, 2004 |
REGULATION
on Economic Ratios and Requirements Binding to be Fulfilled by the Commercial Banks of the Kyrgyz Republic
(As amended by the Resolutions of the NBKR Board No. 26/3 as of October 23, 2004, No. 26/5 as of August 25, 2005, No. 16/4 as of March 28, 2007, No. 38/14 as of August 22, 2007, No. 3/2 as of January 16, 2008, No. 26/2 as of June 10, 2009, No. 52/4 as of September 14, 2011, No. 18/8 as of April 25, 2012, No. 18/9 as of April 25, 2012, No. 43/1 as of November 16, 2012, No. 53/9 as of November 27, 2014, No. 58/14 as of December 24, 2014, No. 78/23 as of December 23, 2015, No. 7/3 as of February 10, 2016, No. 48/11 as of December 14, 2016, No.2017-P-12/25-5-(RLA) as of June 15, 2017, No.2017-P-12/34-1-(RLA) as of August 16, 2017, No. 2018-П-12/7-8-(RLA) as of February 28, 2018)
1. General Provisions
1.1. The Regulation covers all commercial banks, including the commercial banks that carry out the operations under the Principles of Islamic Banking and Finance, including the banks having an “Islamic window” taking into account the special terminology applied by them when carrying out banking operations and the State Development Bank of the Kyrgyz Republic (hereinafter – the “banks”).
(As amended by the Resolutions of the National Bank of the Kyrgyz Republic Board No. 38/14 as of August 22, 2007, No. 26/2 as of June 10, 2009, No. 43/1 as of November 16, 2012, No. 78/23 as of December 23, 2015, No.2017-P-12/25-5-(RLA) as of June 15, 2017)
1.2. The aim of this Regulation is to set economic ratios and requirements binding to be fulfilled by the banks.
1.3. In order to fulfill economic ratios and requirements specified in this Regulation and to mitigate risks, the banks are recommended to set the internal limits of the economic ratios and requirements that shall be lower than maximum and higher than minimum limits set by the National Bank of the Kyrgyz Republic (hereinafter – the National Bank).
(As amended by Resolution No. 2017-P-12/25-5-(RLA) of the National Bank of the Kyrgyz Republic Board as of June 15, 2017)
1.4. To achieve the aim and to fulfill the objectives of the National Bank, the Management Board of the bank can change the values of the economic ratios and requirements for a restricted period set in this Regulation using a separate resolution.
(As amended by Resolution No. 58/14 of the National Bank of the Kyrgyz Republic Board as of December 24, 2014)
2. Maximum Risk Exposure per One Borrower or a Group of Related Borrowers (К1)
2.1. The maximum risk exposure per one borrower or a group of related borrowers not related to the bank shall not exceed the following values:
- for the borrowers or the group of the related borrowers, except for the banks (К1.1) - 20%;
- for the banks (К1.3) - 30%.
2.2. The maximum risk exposure per one borrower or the group of the related borrowers related to the bank shall not exceed the following values:
- for the borrowers or the group of the related borrowers, except for the banks (К1.2) - 15%;
- for the banks (К1.4) - 15%.
2.3. The procedure for calculation of the maximum risk exposure per one borrower or the group of the related borrowers not related to the bank shall be determined in accordance with the Instruction on Restriction of Lending approved by the resolution of the National Bank of the Kyrgyz Republic Board.
2.4. The procedure for calculation of the maximum risk exposure per one borrower or the group of the related borrowers related to the bank shall be determined in accordance with Section 6 of the Instruction on Restriction of Lending and the Instruction on the Requirements to the Operations of the Bank with Affiliates and Bank-Related Parties approved by the resolution of the NBKR Board.
(As amended by the Resolutions of the National Bank of the Kyrgyz Republic Board No. 53/9 as of November 27, 2014, No.2017-P-12/25-5-(RLA) as of June 15, 2017)
3. Capital Adequacy Standards (К2)
3.1. The minimum size of the capital set by the Board of the National Bank:
3.1.1. The minimum size of the banks’ authorized capital.
(As amended by Resolution No. 26/2 of the National Bank of the Kyrgyz Republic Board as of June 10, 2009)
3.1.2. The minimum size of the own (regulatory) capital.
(As amended by the Resolutions of the National Bank of the Kyrgyz Republic Board No. 38/14 as of August 22, 2007, No. 26/2 as of June 10, 2009, No.2017-P-12/25-5-(RLA) as of June 15, 2017)
3.2. The capital adequacy ratios that are based on risk weighting of the assets and the off-balance sheet liabilities:
- the total capital adequacy ratio (К2.1) is no less than 12%;
- the Tier 1 capital adequacy ratio (К2.2) is no less than 6%.
(As amended by Resolution No. 2017-P-12/25-5-(RLA) of the National Bank of the Kyrgyz Republic Board as of June 15, 2017)
3.3. The leverage (К2.3) is no less than 8%.
3.4. The capital adequacy standards and the procedure for their calculation shall be determined according to the Instruction on Determining the Capital Adequacy Standards of the Commercial Banks of the Kyrgyz Republic approved by the resolution of the National Bank of the Kyrgyz Republic Board.
(As amended by the Resolutions of the National Bank of the Kyrgyz Republic Board No. 26/2 as of June 10, 2009, No.2017-P-12/25-5-(RLA) as of June 15, 2017)
4. Liquidity ratio (К3)
4.1. The liquidity ratio (К3.1) shall be maintained at the level no lower than 45%.
(As amended by the Resolutions of the National Bank of the Kyrgyz Republic Board No. 78/23 as of December 23, 2015, No. 2017-P-12/25-5-(RLA) as of June 15, 2017)
4.2. The liquidity ratio is determined according to the formula:
К3.1 = (LA / BL) * 100%, where:
1) LA is liquid assets, which include:
- the cash in the cash desks and the ATMs of the bank in the national and foreign currency;
- the funds on correspondent and other accounts, including in precious metals with the National Bank;
- the funds on correspondent accounts, including in precious metals, with the banks;
- the interbank deposits with the maturity of 7 days;
- the government treasury bills and other high liquid securities issued by the Government of the Kyrgyz Republic and the National Bank (hereinafter – the high liquid securities). These securities when calculating the liquidity ratio shall be accounted by deducting the premium (the discount) and the unrealized profit (losses);
- the gold small bars issued by the National Bank;
- the deposits with the banks that have a long-term credit rating no lower than "ВВ" or "Ва2", assigned by one of the rating agencies "Standard and Poor’s", "Fitch Ratings", "Moody’s Investors Service", "Japan Credit Rating Agency (JCR)", "Dominion Bond Rating Service (DBRS)", except for the affiliated banks, if the terms of the agreement envisage the possibility to withdraw a deposit within 7 days;
(As amended by Resolution No. 2018-P-12/7-8-(RLA) of the National Bank of the Kyrgyz Republic Board as of February 28, 2018)
- the high liquid securities purchased under the repo agreement;
- the government securities that have a long-term sovereign credit rating no lower than “A” assigned by the rating agency “Standard & Poor's” or the equivalent rating assigned by one of the rating agencies “Japan Credit Rating Agency (JCR)”, “Fitch Ratings”, “Dominion Bond Rating Service (DBRS)” and “Moody’s Investors Service”.
(As amended by Resolution No. 2017-P-12/25-5-(RLA) of the National Bank of the Kyrgyz Republic Board as of June 15, 2017)
2) BL is the liabilities of the bank, which for calculation of the liquidity ratio include:
- the demand deposits of legal entities and individuals in the national and foreign currency, except for the minimum required balance set by the agreement (that cannot be used until the agreement is terminated) as well as the funds in settlements;
(As amended by Resolution No. 2018-P-12/7-8-(RLA) of the National Bank of the Kyrgyz Republic Board as of February 28, 2018)
- the amount of the time deposit, if the terms of the agreement envisage the possibility of partial replenishment and partial withdrawal of the funds by the client prior to the maturity or prior to the start of other liabilities without a necessity to terminate the agreement and to pay a penalty interest rate, except for the minimum required balance set by the agreement;
(As amended by Resolution No. 2018-P-12/7-8-(RLA) of the National Bank of the Kyrgyz Republic Board as of February 28, 2018)
- any other liabilities including bills and other securities issued by the bank, liabilities on the securities sold under the reverse repo-agreement as well as off-balance sheet liabilities, the payments on which are due within 30 days after the reporting date.
In addition, the liabilities of the bank on SWAP and forward transactions are accounted based on the net value of the liabilities less the claims of the bank to the counterparty.
- the liabilities of the bank on metal demand accounts or with the maturity within the nearest 30 days.
(As amended by the Resolutions of the National Bank of the Kyrgyz Republic Board No. 78/23 as of December 23, 2015, No. 7/3 as of February 10, 2016, No. 48/11 as of December 14, 2016, No.2017-P-12/25-5-(RLA) as of June 15, 2017)
4.3. The classified interbank placements when calculating the liquidity ratio are not included into the liquid assets.
Note: “Regulation on Classification of Assets and Relevant Contributions to the Loan Loss Provisions Approved by the Resolution of the National Bank”.
4.4. Any liquid assets that are a security of the bank’s liabilities as well as the high liquid securities sold under the repo agreement shall be excluded from the liquid assets.
(As amended by the Resolutions of the National Bank of the Kyrgyz Republic Board No. 78/23 as of December 23, 2015, No.2017-P-12/25-5-(RLA) as of June 15, 2017)
4.5. The deposits accepted by the bank and that are a security of the assets provided to the clients shall not be included into the bank’s liabilities, if the bank has the required procedures and the control system guaranteeing that the pledge will not be withdrawn prior to the maturity of the loan.
The interbank loans received by the bank and having a security in the form of the pledged funds and/or a deposit with a counterparty bank shall not be included into the liabilities of the bank, if the bank has the required procedures and the control system guaranteeing that the loan can be completely repaid by the pledge.
(As amended by Resolution No. 2017-P-12/25-5-(RLA) of the National Bank of the Kyrgyz Republic Board as of June 15, 2017)
4.6. In order to mitigate the liquidity risk, the management of the bank shall perform daily assets and liabilities management. The bank shall observe the liquidity ratio within a reporting period (one month) based on the average weekly data. Within the reporting period the bank shall calculate the values of the average weekly liquid assets and the short-term liabilities of the bank (when calculating the average weekly values, only business days shall be included into the calculation) as of the reporting dates. The average indicators are calculated according to the method of the arithmetic average data calculation.
(As amended by Resolution No. 2017-P-12/25-5-(RLA) of the National Bank of the Kyrgyz Republic Board as of June 15, 2017)
4.7. The bank shall develop a liquidity risk management policy that shall include at least the following:
- daily measurement and monitoring of cash inflow and outflow as well as weekly monitoring of the maturity gaps in the bank’s assets and liabilities to control the daily need in the liquidity and to ensure fulfillment of the liabilities;
- forecast of the required liquidity;
- structure and assessment of the sustainability of the deposit base and other borrowings;
- cost of the resources;
- ability to borrow at the money market;
- quality of assets;
- fulfillment of the off-balance sheet liabilities;
- planning in the event of the liquidity crisis;
- liquidity management in the foreign currencies;
- internal control over the liquidity risk management;
- required management reporting.
4.8. The short-term liquidity ratio (К3.2) shall be maintained at the level no lower than 35%.
(As amended by the Resolutions of the National Bank of the Kyrgyz Republic Board No. 78/23 as of December 23, 2015, No.2017-P-12/25-5-(RLA) as of June 15, 2017)
4.9. The short-term liquidity ratio (К3.2) is determined according to the formula:
К3.2 = (HLA / STL) * 100, where:
1) HLA is the high liquid assets, which include:
а) the cash in the cash desks and the ATMs of the bank in the national and foreign currency;
b) the funds on correspondent and other accounts, including in precious metals, with the National Bank of the Kyrgyz Republic;
c) the funds on correspondent accounts, including in precious metals, with the banks that have a long-term credit rating no lower than “ВВ” or “Ва2”, assigned by one of the rating agencies “Standard and Poor’s”, “Fitch Ratings”, “Moody’s Investors Service”, “Japan Credit Rating Agency (JCR)”, “Dominion Bond Rating Service (DBRS)”, except for the affiliated banks.
d) the deposits with the banks that have a long-term credit rating no lower than “ВВ” or “Ва2”, assigned by one of the rating agencies “Standard and Poor’s”, “Fitch Ratings”, “Moody’s Investors Service”, “Japan Credit Rating Agency (JCR)”, “Dominion Bond Rating Service (DBRS)”, except for the affiliated banks, if the terms of the agreement provide for the possibility to withdraw a deposit within 7 days;
e) the notes of the National Bank of the Kyrgyz Republic;
f) the government securities issued by the Government of the Kyrgyz Republic, which will mature within 12 months;
(As amended by Resolution No. 2018-П-12/7-8-(RLA) of the National Bank of the Kyrgyz Republic Board as of February 28, 2018)
g) a portion of the government securities issued by the Government of the Kyrgyz Republic (except for the government securities specified in sub-clause “f”, Clause 4.9 of this Regulation), in the amount not exceeding 50% of the total amount of the liabilities to the Social Fund of the Kyrgyz Republic;
h) the high liquid securities purchased under the repo agreement;
i) 20% of the funds on the correspondent accounts with other banks, except for the affiliated banks, the banks specified in Sub-clause “c”, Sub-clause 1, of this Clause as well as the banks, where the direct banking supervision is imposed or the liquidation procedure is carried out;
j) for a branch of the foreign bank – the funds on the correspondent accounts with other branches of this foreign bank and opened in the currency of the specified state.
k) the government securities issued by the states that have a long-term credit rating no lower than “A” assigned by the rating agency “Standard & Poor's” or the equivalent rating assigned by one of the rating agencies “Japan Credit Rating Agency (JCR)”, “Fitch Ratings”, “Dominion Bond Rating Service (DBRS)” and “Moody’s Investors Service”.
l) (Became invalid as per Resolution No. 2018-П-12/7-8-(RLA) of the National Bank of the Kyrgyz Republic Board as of February 28, 2018)
2) STL is the short-term liabilities:
a) the demand deposits of legal entities and individuals in the national and foreign currencies, except for the minimum required balance set by the agreement (that cannot be used until termination of the agreement) and the funds in settlements;
b) the amount of a time deposit, if the terms of the agreement envisage the possibility of partial replenishment and partial withdrawal of the funds by the client prior to the maturity or prior to the start of other liabilities, without a necessity to terminate the agreement and to pay a penalty interest rate, except for the minimum required balance set by the agreement;
(As amended by Resolution No. 2018-P-12/7-8-(RLA) of the National Bank of the Kyrgyz Republic Board as of February 28, 2018)
c) other liabilities, including the off-balance sheet liabilities, the payments on which are due within 7 days. In addition, the bank’s liabilities on SWAP and forward transactions are accounted based on the net value of the liabilities less the claims of the bank to the counterparty;
d) 50% of the total amount of the liabilities to the Social Fund of the Kyrgyz Republic, not included into paragraphs “a”-“c” of this Sub-clause;
e) the liabilities on the depersonalized metal accounts of the individuals and the legal entities on demand and with the maturity within the nearest 7 days.
(As amended by the Resolutions of the National Bank of the Kyrgyz Republic Board No. 78/23 as of December 23, 2015, No. 7/3 as of February 10, 2016, No. 48/11 as of December 14, 2016, No.2017-P-12/25-5-(RLA) as of June 15, 2017)
4.10. Any liquid assets that are a security of the bank’s liabilities as well as the high liquid securities sold under the repo agreement are excluded from the liquid assets.
(As amended by Resolution No. 78/23 of the National Bank of the Kyrgyz Republic Board as of December 23, 2015)
4.11. In order to mitigate the short-term liquidity risk, the management of the bank shall perform daily assets and liabilities management. The bank shall observe the short-term liquidity ratio within a reporting week (7 calendar days) based on the average weekly data, including business days, days off and holidays. When calculating the average weekly data, the calculation shall include the daily data as of the end of an operation day. The average indicators are counted according to the method for calculation of the arithmetic average data.
(As amended by the Resolutions of the National Bank of the Kyrgyz Republic Board No. 78/23 as of December 23, 2015, No.2017-P-12/25-5-(RLA) as of June 15, 2017)
4.12. The instant liquidity ratio (К3.3) shall be maintained by the banks, the deposit base (accounts of the legal entities, the individuals and the Social Fund of the Kyrgyz Republic) of which is 8% and over of the deposit base of the whole banking system.
(As amended by the Resolutions of the National Bank of the Kyrgyz Republic Board No. 78/23 as of December 23, 2015, No.2017-P-12/25-5-(RLA) as of June 15, 2017)
4.13. The instant liquidity ratio (К3.3) is determined according to the formula:
К3.3 = (HLA / STL) * 100%, where:
1) HLA is the high liquid assets:
- the cash in the cash desks and the ATMs of the bank in the national and foreign currency;
- the funds on correspondent and other accounts with the National Bank of the Kyrgyz Republic;
- the funds on correspondent accounts with the banks that have a long-term credit rating no lower than “ВВ” or “Ва2”, assigned by one of the rating agencies “Standard and Poor’s”, “Fitch Ratings”, “Moody’s Investors Service”, “Japan Credit Rating Agency (JCR)”, “Dominion Bond Rating Service (DBRS)”, except for the affiliated banks.
- 20% of the funds on the correspondent accounts with other banks, except for the affiliated banks, the banks specified in paragraph four, Sub-clause 1 of this Clause as well as the banks, where the direct banking supervision is imposed or the liquidation procedure is carried out;
- for a branch of the foreign bank – the funds on the correspondent accounts with other branches of this foreign bank located on the territory of the OECD countries and opened in the currency of the specified states.
- the notes of the National Bank of the Kyrgyz Republic, except for the notes that are a security of the bank’s liabilities and also sold under the repo agreement;
- the government securities issued by the Government of the Kyrgyz Republic, which will mature within 7 days, except for the government securities that are a security of the bank’s liabilities and also sold under the repo agreement;
- the “overnight” deposits with the banks that have a long-term credit rating no lower than “ВВ” or “Ва2”, assigned by one of the rating agencies Standard and Poor’s, Fitch Ratings, Moody’s Investors Service, Japan Credit Rating Agency (JCR), Dominion Bond Rating Service (DBRS), except for the affiliated banks, which mature within the next (one) operation day.
2) STL is the short-term liabilities:
- the demand deposits of legal entities and individuals in the national and foreign currency, the funds in settlements;
- other liabilities, including the off-balance sheet liabilities, the payments on which will be due within a reporting operation day.
(As amended by Resolution No. 2018-P-12/7-8-(RLA) of the National Bank of the Kyrgyz Republic Board as of February 28, 2018)
2) STL is the short-term liabilities:
- the demand deposits of legal entities and individuals in the national and foreign currency, the funds in settlements;
- other liabilities, including the off-balance sheet liabilities, the payments on which will be due within a reporting operation day.
(As amended by the Resolutions of the National Bank of the Kyrgyz Republic Board No. 78/23 as of December 23, 2015, No. 48/11 as of December 14, 2016, No.2017-P-12/25-5-(RLA) as of June 15, 2017)
4.14. In order to mitigate the liquidity risk, the management of the bank shall perform daily assets and liabilities management. The bank shall observe the instant liquidity ratio as of the end of a reporting operation day.
(As amended by the Resolutions of the National Bank of the Kyrgyz Republic Board No. 78/23 as of December 23, 2015, No.2017-P-12/25-5-(RLA) as of June 15, 2017)
4.15. The risk management policy of the bank shall contain the provisions on risk management of the short-term and instant liquidity that shall include at least the following:
- daily measurement and monitoring of cash inflow and outflow as well as weekly monitoring of the maturity gaps in the high liquid assets and the short-terms liabilities of the bank to control the daily need in the short-term and instant liquidity and to ensure fulfillment of the short-term liabilities;
- forecast of the required short-term and instant liquidity;
- structure and assessment of the sustainability of the deposit base;
- cost of the resources;
- ability to borrow at the money market;
- quality of assets;
- fulfillment of the off-balance sheet liabilities;
- planning in the event of the liquidity crisis;
- liquidity management in the foreign currencies;
- internal control over the short-term and instant liquidity risk management;
- required management reporting.
(As amended by Resolution No. 78/23 of the National Bank of the Kyrgyz Republic Board as of December 23, 2015)
4.16. The list of the banks that shall observe the instant liquidity ratio (К3.3) and the value of the ratio (К3.3) for a specific bank are set by the Supervisory committee of the National Bank of the Kyrgyz Republic, in addition, the norms of the Regulation on the Systemacity Criteria of Commercial Banks and Non-banking Financial and Credit Institutions are accounted.
(As amended by the Resolutions of the National Bank of the Kyrgyz Republic Board No. 78/23 as of December 23, 2015, No.2017-P-12/25-5-(RLA) as of June 15, 2017)
4.17. The ratios (К3.1), (К3.2) and (К3.3) shall not be applied to the State Development Bank of the Kyrgyz Republic.
(As amended by Resolution No. 78/23 of the National Bank of the Kyrgyz Republic Board as of December 23, 2015)
5. Open Currency Position Limit (К4)
5.1. The open currency position limit (К4) shall not exceed the following values:
- for the limit of the long/short open currency balance sheet/off-balance sheet position in each currency (К4.1) – no more than 15% of the bank’s net total capital;
- for the total value of the long open currency positions (К4.2) – no more than 20% of the bank’s net total capital;
- for the total value of the short open currency positions (К4.3) – no more than 20% of the bank’s net total capital.
For the banks that carry out the operations with the precious metals, the open position limit (К4) in the precious metals shall not exceed the following values:
- for the limit of the long/short open currency balance sheet/off-balance sheet position in each type of the precious metals (К4.4) – no more than 15% of the bank’s net total capital;
- for the total value of the long open currency positions in the precious metals (К4.5) – no more than 20% of the bank’s net total capital;
- for the total value of the short open currency positions in the precious metals (К4.6) – no more than 20% of the bank’s net total capital
(As amended by Resolution No. 2017-P-12/25-5-(RLA) of the National Bank of the Kyrgyz Republic Board as of June 15, 2017)
5.2. The calculation of the open currency position limits is made according to the Instruction on the Procedure for Observance of the Open Position Limits by the Commercial Banks in the Kyrgyz Republic.
(As amended by the Resolutions of the National Bank of the Kyrgyz Republic Board No. 26/2 as of June 10, 2009, No. 2017-P-12/25-5-(RLA) as of June 15, 2017)
6. Maximum Risk Exposure Ratio on the Liabilities to the Individuals (К5)
(Section as amended by Resolution No. 16/4 of the National Bank of the Kyrgyz Republic Board as of March 28, 2007)
6.1. The maximum risk exposure ratio on time deposits of the individuals and other liabilities to the individuals (К5.1) is calculated according to the formula:
К5.1 = NTC / TDI * 100%, where:
NTC |
is the net total capital of the bank; |
TDI |
is the amount of the time deposits and other liabilities to the individuals, including bills, saving (deposit) certificates, bonds, checks, etc. |
6.2. The maximum risk exposure ratio on demand deposits of the individuals (К5.2) is calculated according to the formula:
К5.2 = NTC / DDI * 100%, where:
NTC is the net total capital of the bank;
DDI is the amount of the demand deposits of the individuals.
6.3. These ratios as well as their values can be set individually for a specific bank according to a decision of the Supervisory Committee of the National Bank.
These ratios shall not be applied to the State Development Bank of the Kyrgyz Republic.
(As amended by the Resolutions of the National Bank of the Kyrgyz Republic Board No. 43/1 as of November 16, 2012, No. 2017-P-12/25-5-(RLA) as of June 15, 2017)
6.4. The bank shall observe the maximum risk exposure ratio on the time deposits and other liabilities to the individuals (К5.1) on a daily basis and the maximum risk exposure ratio on the demand deposits of the individuals (К5.2) – within a reporting period (one month) based on the average weekly data. Within the reporting period, the bank shall calculate the average weekly values of the demand deposits of the individuals, into calculation of which only business days are included. The average values are calculated according to the method for calculation of the arithmetic average data.
6.5. On a daily basis, up to 9.00 the banks shall submit a report on compliance with the maximum risk exposure ratio on the time deposits and other liabilities to the individuals (К5.1) to the National Bank as of the end of the last operation day according to Appendix 1.
This report shall be submitted to the External supervision department in a hardcopy form certified by the signature of the bank’s manager.
(As amended by the Resolutions of the National Bank of the Kyrgyz Republic Board No. 18/9 as of April 25, 2012, No.2017-P-12/25-5-(RLA) as of June 15, 2017)
7. Maximum Risk Exposure on Unsecured Loans
7.1. The maximum risk exposure on the unsecured loans shall not exceed 50% of the bank’s net total capital.
7.2. The bank is entitled to exclude the loans disbursed under a surety of the members of the solidarity group from the calculation of the maximum risk exposure ratio on the unsecured loans if the terms and the criteria described in the Regulation on the Minimum Requirements to the Credit Risk Management in Commercial Banks and Other Financial and Credit Institutions Licensed by the National Bank of the Kyrgyz Republic are observed in terms of lending of the solidarity groups.
(As amended by the Resolutions of the National Bank of the Kyrgyz Republic Board No. 18/8 as of April 25, 2012, No.2017-P-12/25-5-(RLA) as of June 15, 2017)
7.3. The maximum volume of the deposits mobilized from the individuals and the legal entities shall not exceed 50 percent of the bank’s loan portfolio, if the volume of the loans disbursed to the members of the solidarity group in the loan portfolio of the bank is 50 and over percent.
In addition, the loans disbursed to the members of the solidarity group falling under all following criteria shall be excluded from the volume of the loans disbursed to the members of the solidarity group:
- for the amount no more than KGS 150,000 (to one SG);
- with the maturity of no more than 24 months;
- with the annuity repayment schedule;
- the interest rate is no more than 23% p.a.
(As amended by Resolution No. 2018-P-12/7-8-(RLA) of the National Bank of the Kyrgyz Republic Board as of February 28, 2018)
8. Maximum Risk Exposure on the Operations with Affiliates and Bank-Related Parties
8.1. The maximum risk exposure on the operations with the affiliates and/or bank-related parties in accordance with the resolution of the National Bank Board expressed as the amount of the total debt of the affiliates and/or bank-related parties shall not exceed 60% of the bank’s net total capital.
(As amended by Resolution No. 2017-P-12/25-5-(RLA) of the National Bank of the Kyrgyz Republic Board as of June 15, 2017)
9. Maximum Amount of Any Investments to Each Non-banking Organization
9.1. The maximum amount of any investments to each non-banking organization, including any financial investments and loans shall be no less than 15% of the bank’s own (regulatory) capital.
(As amended by the Resolutions of the National Bank of the Kyrgyz Republic Board No. 3/2 as of January 16, 2008, No. 26/2 as of June 10, 2009, No. 2017-P-12/25-5-(RLA) as of June 15, 2017)
9.2. The total amount of these investments cannot exceed 60% of the bank’s own (regulatory) capital.
(As amended by Resolution No. 2017-P-12/25-5-(RLA) of the National Bank of the Kyrgyz Republic Board as of June 15, 2017)
9.3. If the bank intends to invest the capital to any non-banking organization for purposes of the long-term investment in the amount exceeding 10 percent of its net total capital, in this event the bank is obliged to notify about it the National bank in writing attaching the following documents/information 40 calendar days prior to the start of the investment:
1) the information on the aim and the terms of the investment;
2) the calculation of the investment yield within the next two years;
3) the general information on the organization (name, location, business form, types of the activity, from what time it is at the market, information on owners and managers);
4) the information on presence of common interests between a non-banking organization and affiliates or bank-related parties;
5) the information on loans and other types of financing, whenever provided by the bank to this organization and their repayment;
6) the financial statements of the organization for the last two years (preferably certified by an external auditor);
To fulfill its functions in accordance with the legislation of the Kyrgyz Republic, the National Bank is entitled to request any additional information.
(As amended by the Resolutions of the National Bank of the Kyrgyz Republic Board No. 3/2 as of January 16, 2008, No. 43/1 as of November 16, 2012, No. 2017-P-12/25-5-(RLA) as of June 15, 2017)
9.4. The National Bank is entitled to send a claim to suspend the investment 10 days prior to the start of the expected investment as well as to terminate or to restrict the investment at any time after the bank has invested the funds, if:
- the results of the last inspection or the information received within the frameworks of the external supervision have shown the presence of the threat to the financial sustainability and the reliability of the bank or the interests of the depositors and other lenders of the bank;
- the investment will be related to the bank’s involvement into the unhealthy and unsafe banking practice with violation of the banking legislation, the prescriptions of the National Bank or the written agreements of the bank with the National Bank;
- the bank for any reasons cannot monitor this investment;
- the National Bank is aware of the facts evidencing the dingy business reputation of the non-banking organization and/or its officers as well as the facts that the previous activity of the non-banking organization and/or its officers has contributed to the bankruptcy or the significant financial losses of any legal entity;
- the bank has submitted incomplete documents/information or has submitted unreliable information.
(As amended by the Resolutions of the National Bank of the Kyrgyz Republic Board No. 3/2 as of January 16, 2008, No. 2017-P-12/25-5-(RLA) as of June 15, 2017)
9.5. When the bank creates or purchases an affiliated or daughter company, the bank shall meet the requirements of the Kyrgyz Law “On the National Bank of the Kyrgyz Republic, Banks and Banking Activity” and the regulatory legal acts of the National Bank determining the procedure for creation and/or purchase of a daughter or affiliated company by the bank.
(As amended by the Resolutions of the National Bank of the Kyrgyz Republic Board No. 3/2 as of January 16, 2008, No. 26/2 as of June 10, 2009, No. 2017-P-12/25-5-(RLA) as of June 15, 2017)
10. Maximum Amount of the Investments to the Immovable Property (Fixed Assets)
10.1. The maximum amount of the investments to the immovable property (fixed assets) ((9) See the note) shall not exceed 100% of the paid-in authorized capital of the bank.
10.2. For purposes of this Regulation, the immovable property stands for the immovable property (including one under construction/installed immovable property) that is owned by the bank or is at the bank’s disposal under a finance lease agreement and is used/will be used as the fixed assets.
(As amended by the Resolutions of the National Bank of the Kyrgyz Republic Board No. 3/2 as of January 16, 2008, No. 2017-P-12/25-5-(RLA) as of June 15, 2017)
10.3. The calculation of the maximum amount of the investments to the immovable property (fixed assets) shall include all immovable property, capital investments to leasehold improvement (under the operating and/or finance lease agreement) as well as any investments to the shares or the bonds or other similar debt liabilities of an enterprise possessing the premises of the bank and all loans disbursed to these enterprises and/or secured by their shares. All specified assets (except for the immovable property under the finance lease agreement) are included into calculation at their balance sheet value.
The immovable property that is at the bank’s disposal under the finance lease agreement shall be included into the calculation of the maximum amount of the investments to the immovable property (fixed assets) at the historical value less the current amount of the liabilities on the finance lease.
(As amended by the Resolutions of the National Bank of the Kyrgyz Republic Board No. 3/2 as of January 16, 2008, No. 2017-P-12/25-5-(RLA) as of June 15, 2017)
10.4. The bank may have the immovable property intended to create the conditions for work and leisure of the employees, if the balance sheet value of this property is included into the calculation of the maximum amount of the investments to the immovable property (fixed assets).
(As amended by the Resolutions of the National Bank of the Kyrgyz Republic Board No. 3/2 as of January 16, 2008, No. 2017-P-12/25-5-(RLA) as of June 15, 2017)
10.5. When reassessing the value of the immovable property, as a result of which the maximum amount of the investments to the immovable property (fixed assets) will be violated, the bank shall submit a liability letter to the National Bank that within 12 months after the reassessment, it will bring the amount of the investments to the immovable property (fixed assets) in accordance with the requirements of the National Bank.
(As amended by the Resolutions of the National Bank of the Kyrgyz Republic Board No. 26/2 as of June 10, 2009, No .2017-P-12/25-5-(RLA) as of June 15, 2017)
10.6. The property received by the bank for repayment of the debt on the disbursed loans can be accepted by the bank as the fixed assets if the requirements of the legislation are met and the following terms are fulfilled:
- accepting the property as the fixed assets will not entail the violation of the maximum amount of the investments to the immovable property;
- this property will be used for the purposes of the banking activity;
- the period of its putting into operation shall not exceed 18 months.
The property received for repayment of the debt on the disbursed loans can be accepted as the fixed assets only based on a decision of the Board of Directors, if the value of the accepted property exceeds 10% of the net total capital.
(As amended by Resolution No. 26/2 of the National Bank of the Kyrgyz Republic Board as of June 10, 2009)
11. Amount of the Investments to the Securities of Other States and the Non-government Debt Securities
(Section as amended by Resolution No. 52/4 of the National Bank of the Kyrgyz Republic Board as of September 14, 2011)
11.1. The total amount of the bank’s investments to the securities of the governments and the central banks of the states that have a long-term credit rating no lower than “A” or “А2” assigned by one of the rating agencies “Standard and Poor’s”, “Fitch Ratings” or “Moody’s Investors Service” shall not exceed 100% of the bank’s net total capital.
(As amended by the Resolutions of the National Bank of the Kyrgyz Republic Board No. 78/23 as of December 23, 2015, No. 48/11 as of December 14, 2016, No. 2017-P-12/25-5-(RLA) as of June 15, 2017)
11.2. The total amount of the bank’s investments to the non-government debt securities shall not exceed 50% of the bank’s net total capital.
12. Requirements to the Concentration Risk Management
12.1. The bank shall identify the concentration risk and manage it. The concentration risk is a possibility to bear the potential losses that can significantly deteriorate the financial position of the bank and lead to the impossibility to carry out the current operations, which can occur due to the concentration of the activity with definite persons, on the definite types of the instruments, the assets and the liabilities, the sectors of the economy, the regions and the countries. The concentration risk is not an isolated type of the banking risks, but generalized and can include the elements of the following banking risks: credit, sectoral, country (regional), as a result of the concentration of the activity on some types of the operations or on some sources of funding.
12.2. The bank shall develop a risk management policy, including the concentration risk. The concentration risk management policy (hereinafter - the policy) shall take into account the following issues:
- when working with an individual client (an individual or a legal entity), the bank shall consider a group of related parties as one client and all amounts of the various types of the bank’s assets provided to the group of related parties shall be summed up and considered as one asset;
- when mobilizing the funds, the bank shall consider a group of related persons as one client (the concentration of the funds mobilization from one client can negatively influence the activity of the bank). The bank shall reflect the activity regarding the sources of funding in the policy and shall specify the terms for acceptance of the deposits and other types of the liabilities (hereinafter – the deposits), determine the amounts of the large deposits and the criteria when different deposits shall be summed up and considered as one deposit in its internal documents;
- when investing the funds to the various sectors of the economy, the bank shall account the interrelation of the different sectors of the economy. The bank carrying out its activity in the definite sectors of the economy, oblasts and countries is exposed to the different types of the risks. Deterioration of the situation in these sectors of the economy, oblasts and countries exposes the bank to the risk of losses due to non-return and outflow of the placed and mobilized funds of the bank, respectively. One of the main criteria, on which the amount of these losses will depend, is the degree of the concentration risk;
- the sizes of the various pledges shall be evaluated by the bank. The concentration risk materializes if one type of the collateral security on the loans is concentrated in the bank. At that, the value of the pledge and the state of the client’s business can be absolutely unconnected;
- the bank shall carry out an analysis of each financial instrument to reveal its characteristics, due to which it carries the risks of the different type that can lead to the losses;
- interrelations of the different types of the risks and their impact on the concentration risk shall be evaluated by the bank. When the different types of the risks interact, the concentration risk can increase (for example, depreciation of the national currency of an importing client can increase the degree of his/her risk of non-return or the country risk, and on the whole, the concentration risk also increases);
- when managing the concentration risk, the bank shall assess the effectiveness of its activity diversification.
12.3. The Board of Directors and the Management Board of the bank shall have the information on the concentration risk of all types of the bank’s activity. The measurement system of the concentration risk shall unite the exposure to the concentration risk arising from the various types of the bank’s activity. The bank in order to determine the concentration risk assumed by the bank shall, at least, measure the following positions:
а) the amounts of the investments of the bank’s funds:
- to the definite types of the assets;
- per one borrower related to the bank and not related to the bank ((10) See the note);
- to the definite sector of the economy;
- to the oblast (the region) of the Republic;
- to the country;
b) the amounts of the definite types of the liabilities;
c) the amounts of the various types of the pledges.
12.4. The bank shall establish the system of the concentration risk restriction that will quantify the size of the maximum allowable concentration risk for the bank and this system shall be periodically reviewed. The bank shall, at least, set the following restrictions of the concentration risk:
- restrictions related to the concentration on some financial instruments;
- definite types of the assets in the unit weight from the amount of all assets;
- definite types of the liabilities in the unit weight from the amount of all liabilities;
- loans and other types of the debt of one borrower related to the bank in the unit weight from the net total capital. The value of the restriction set by the bank shall not violate the value of the ratios set by this Regulation;
- loans and other types of the debt of one borrower not related to the bank in the unit weight from the net total capital. The value of the restriction set by the bank shall not violate the value of the ratios set by this Regulation;
- investments, loans and equivalent assets invested in one oblast in the unit weight from all assets;
- investments, loans and equivalent assets invested in one country in the unit weight from all assets;
- investments, loans and equivalent assets invested in one sector of the economy in the unit weight from all assets;
- ten largest loans and equivalent assets provided by the bank to its clients in the unit weight from all loans provided by the bank;
- ten largest loans and equivalent assets provided by the bank to its insiders and affiliated companies in the unit weight from all loans provided by the bank;
- deposits of the individuals in the unit weight from total mobilized deposits;
- definite types of the liabilities mobilized by the bank from one sector of the economy in the unit weight from the amount of all liabilities of the bank;
- ten largest funding sources of the bank in the unit weight from the amount of all liabilities of the bank;
- definite types of the collateral security on the loans in the unit weight from the amount of all collateral securities.
The sector of the economy is determined depending on the type of the economic activity of an economic entity leading to receipt of the homogeneous set of products (goods or services). The bank shall set the restrictions of the concentration risk as per the sectors of the economy.
12.5. The bank shall at least monthly monitor the level of the concentration risk in all forms of its materialization, analyze the current situation and plan the activity of the risk management (analytical reports, tables, charts and diagrams) and all this shall be submitted to the management of the bank. The management of the bank shall periodically revise the concentration risk management policy.
12.6. The information on the concentration risk management shall be disclosed to the full when publishing the financial statements, including the quantitative indicators of the concentration risk assumed by the bank.
13. Procedure and Periods for Presentation and Publication of the Reporting on Fulfillment of the Economic Ratios and Maintenance of the Additional Capital Stock in the bank (“Buffer Capital” Index)
(Title of the section as amended by Resolution No. 78/23 of the National Bank of the Kyrgyz Republic Board as of December 23, 2015)
13.1. The banks shall on a daily basis comply with all economic ratios (except for the liquidity ratio, the short-term liquidity ratio and the maximum risk exposure ratio on demand deposits of the individuals). The liquidity ratio and the maximum risk exposure ratio on demand deposits of the individuals are observed within a reporting period (one month). The short-term liquidity ratio is observed within a reporting period (one week). The banks shall on a daily basis maintain an additional capital stock of the bank (“buffer capital” index).
The check of the banks’ compliance with the economic ratios and requirements, maintenance of the additional capital stock of the bank (“buffer capital” index) that shall be calculated daily/weekly can be carried out as of any date based on the accounting balance sheet.
(As amended by the Resolutions of the National Bank of the Kyrgyz Republic Board No. 16/4 as of March 28, 2007, No. 78/23 as of December 23, 2015, No. 2017-P-12/34-1-(RLA) as of August 16, 2017)
13.1-1. Maintenance of the additional capital stock of the bank (“buffer capital” index) is applied to the systemically important banks taking into account the norms of the Regulation on the systemacity criteria of commercial banks and non-banking financial and credit institutions.
(As amended by Resolution No. 2017-P-12/25-5-(RLA) of the National Bank of the Kyrgyz Republic Board as of June 15, 2017)
13.2. The reporting on fulfillment of the economic ratios shall be submitted to the National Bank as a part of the Statutory report according to the form of Appendix 1 hereof.
(As amended by Resolution No. 2017-P-12/25-5-(RLA) of the National Bank of the Kyrgyz Republic Board as of June 15, 2017)
13.3. The reporting on fulfillment of the economic ratios shall be published in the mass media of the republican significance in the state and/or official languages according to the form of Appendix 2 hereof.
13.4. The reporting shall be published within 30 days after the end of each quarter.
13.5. The bank selects the mass media for publication of the quarterly reporting in order to ensure its wide dissemination and availability to the users.
13.6. The information on the publication attaching the copy of the publication shall be submitted to the National Bank within 3 business days after publication.
(As amended by Resolution No. 2017-P-12/25-5-(RLA) of the National Bank of the Kyrgyz Republic Board as of June 15, 2017)
14. Final Provisions
14.1. If the bank fails to observe the economic ratios and requirements, fails to submit or submits unreliable and/or incomplete information and fails to observe the periods for publication of the reporting on fulfillment of the economic ratios, the National Bank is entitled to apply the enforcement measures to the bank in accordance with the legislation of the Kyrgyz Republic.
(As amended by Resolution No. 2017-P-12/25-5-(RLA) of the National Bank of the Kyrgyz Republic Board as of June 15, 2017)
Notes: (Became invalid as per Resolution No. 2017-P-12/25-5-(RLA) of the National Bank of the Kyrgyz Republic Board as of June 15, 2017)
Appendix 1
(As amended by the Resolutions of the NBKR Board No. 26/5 as of August 25, 2005, No. 16/4 as of March 28, 2007, No. 52/4 as of September 14, 2011, No. 78/23 as of December 23, 2015, No.2017-P-12/25-5-(RLA) as of June 15, 2017, No.2017-P-12/34-1-(RLA) as of August 16, 2017)
Economic ratios and requirements, additional capital stock of the bank (“buffer capital” index) |
Designation |
Calculation of the ratio and the additional capital stock of the bank (“buffer capital” index) |
Actual value of the ratio and the additional capital stock of the bank (“buffer capital” index) |
Set value of the ratio and the additional capital stock of the bank (“buffer capital” index) |
Deviation from the set ratio and the additional capital stock of the bank (“buffer capital” index) |
Maximum risk exposure per one borrower or a group of related borrowers |
К1.1 |
PR ------ ---- NTC |
|
no more than 20% |
|
К1.2 |
PR ----- ---- NTC |
|
no more than 15% |
|
|
К1.3 |
PR ----- ---- NTC |
|
no more than 30% |
|
|
К1.4 |
PR ----- ---- NTC |
|
no more than 15% |
|
|
Capital adequacy ratio |
К2.1 |
NTC ----- ---- NRA |
|
no less than 12% |
|
К2.2 |
NT1C ------ ---- NRA |
|
no less than 6% |
|
|
К2.3 |
NTC ----- ---- TA |
|
no less than 8% |
|
|
Liquidity ratio |
К3.1 |
LA ----- ---- BL |
|
no less than 45% |
|
Additional capital stock of the bank (“buffer capital” index) |
|
NTC ----- ---- NRA |
|
no less than __% (specify the value) |
|
* NT1C – net Tier 1 capital, NRA – net risky assets, TA – total assets,
|
Average values for a reporting period |
1 week |
2 week |
3 week |
4 week |
5 week |
LA – liquid assets |
|
|
|
|
|
|
BL – bank’s liabilities |
|
|
|
|
|
|
К3.1 ratio = (LA / BL) * 100% |
|
|
|
|
|
|
А. A daily report on compliance with the maximum risk exposure ratio on time deposits and other liabilities to the individuals (К5.1)
Date |
К5.1 |
||
NTC |
TDI |
Actual value |
|
1.04.07 |
|
|
|
2.04.07 |
|
|
|
3.04.07 |
|
|
|
4.04.07 |
|
|
|
... |
|
|
|
... |
|
|
|
... |
|
|
|
30.04.07 |
|
|
|
B. A report on compliance with the maximum risk exposure ratio on demand deposits of the individuals (К5.2)
Average values for a reporting period |
1 week |
2 week |
3 week |
4 week |
5 week |
NTC – net total capital of the bank |
|
|
|
|
|
DDI – the amount of the demand deposits of the individuals |
|
|
|
|
|
К5.2 = NTC / DDI * 100% |
|
|
|
|
|
C. A report on fulfillment of the National Bank’s requirements
Designation |
Actual value |
Set value |
Maximum risk exposure on the unsecured loans |
|
No more than 50% of NTC |
Maximum risk exposure on the operations with affiliates and bank-related parties |
|
No more than 60% of NTC |
Maximum amount of any investments to each non-banking organization |
|
No more than 60% of the bank’s own (regulatory) capital |
Maximum amount of the investments to the immovable property (fixed assets) |
|
No more than 100% of the paid-in authorized capital of the bank |
Total amount of the investments to the securities of the Governments and the Central banks of other states |
|
No more than 100% of NTC |
Total amount of the bank’s investments to the non-government debt securities |
|
No more than 50% of NTC |
D. A report on compliance with the short-term liquidity ratio (К3.2)
Date |
К3.2 |
||
HLA |
STL |
Actual value |
|
dd.mm.yyyy |
|
|
|
dd.mm.yyyy |
|
|
|
dd.mm.yyyy |
|
|
|
... |
|
|
|
Average value for a week |
|
|
|
position |
signature |
full name |
__________________________ |
___________________ |
______________________________ |
E. A daily report on compliance with the instant liquidity ratio (К3.3)
Date |
|
К3.3 |
||
|
HLA |
STL |
Actual value |
|
1.10.20__ |
|
|
|
|
2.10.20__ |
|
|
|
|
3.10.20__ |
|
|
|
|
... |
|
|
|
|
... |
|
|
|
|
... |
|
|
|
|
30.10.20__ |
|
|
|
|
position |
signature |
full name |
__________________________ |
___________________ |
______________________________"; |
Appendix 2
INFORMATION
on compliance with the economic ratios
for ________ quarter of 200__
as of ______________ 20__
Bank _____________
(As amended by the Resolutions of the NBKR Board No. 78/23 as of December 23, 2015, No. 2017-P-12/34-1-(RLA) as of August 16, 2017)
Economic ratios and maintenance of the additional capital stock in the bank (“buffer capital” index) |
Set value of the ratio |
Actual value of the ratio |
Maximum risk exposure per one borrower or a group of related borrowers not related to the bank (К1.1) |
no more than 20% |
|
Maximum risk exposure per one borrower or a group of related borrowers related to the bank (К1.2) |
no more than 15% |
|
Maximum risk exposure on the interbank placements with the bank not related to the bank (К1.3) |
no more than 30% |
|
Maximum risk exposure on the interbank placements with the bank related to the bank (К1.4) |
no more than 15% |
|
Total capital adequacy ratio (К2.1) |
no less than 12% |
|
Tier 1 capital adequacy ratio (К2.2) |
no less than 6% |
|
Leverage (К2.3) |
no less than 8% |
|
Liquidity ratio of the bank (К3.1) |
no less than 45% |
|
Number of the violation days according to the total value of the long open currency positions (К4.2) |
no more than 20% |
|
Number of the violation days according to the total value of the short open currency positions (К4.3) |
no more than 20% |
|
Additional capital stock of the bank (“buffer capital” index) |
|
NTC ----- ---- NRA |
Number of the violation days according to the total value of the long open positions in precious metals (К4.5) |
no more than 20% |
|
Number of the violation days according to the total value of the short open positions in precious metals (К4.6) |
no more than 20% |
|