National Bank of the Kyrgyz Republic

Creation date: 2022-06-08

Approved by

Resolution No.39/4

of the National Bank

of the Kyrgyz Republic Board

as of September 30, 2009

Regulation

on the Requirements to the Standard Agreements

Concluded under the Principles of Islamic Banking and Finance

(Amendments and addenda are approved by the Resolutions of the NBKR Board No. 32/8 as of August 28, 2013, No. 7/3 as of February 10, 2016, No. 49/8 as of December 21, 2016, No. 21/10 as of May 31, 2017, No.2022-П-12/9-4 dated February 24, 2022)

This Regulation shall be mandatorily used by the commercial banks licensed by the National Bank of the Kyrgyz Republic to conduct operations in accordance with the principles of Islamic banking and finance, as well as the banks that have an “Islamic window” (hereinafter referred to as the banks).

(As amended by Resolutions of the National Bank of the Kyrgyz Republic Board No. 21/10 as of May 31, 2017)

Section I. General Provisions

1.1. The purpose of this Regulation is standardization of the standard agreements concluded between a bank and a client to carry out the transactions that correspond to the principles of Islamic banking and finance.

1.2. The definitions set forth in the Law of the Kyrgyz Republic “On Banks and Banking Activity in the Kyrgyz Republic are used in this Regulation.

1.3. The standard agreement concluded in accordance with the principles of Islamic banking and finance shall meet the following requirements:

а) mandatory compliance with the Sharia’h Standards:

· agreements shall not provide for receiving interest income by the parties;

· an agreement cannot be concluded if it contains uncertainty (ambiguity) regarding the type, quantity of the subject of an agreement, and also uncertainty (ambiguity) with respect to the agreement term;

· it is not allowed to conclude the agreements connected with gambling, manufacture of tobacco and alcoholic products;

· agreements shall provide for exclusion of the speculative nature of a transaction, which is prohibited by the Sharia’h Standards;

b) freedom of making an agreement:

· an agreement shall be concluded on a voluntary basis. If one of the parties was forced to conclude an agreement for any reason, such agreement shall be invalid;

c) availability of the subject of an agreement:

· the subject matter of an agreement shall be available (exist) at the time of entering into an agreement;

· if the subject of an agreement is production of the goods in the future, the agreement shall provide for an accurate description of the goods’ properties and the period of its manufacture;

d) legality of the agreements:

· the terms of an agreement shall not violate the property rights of the third party (ies);

· actions arising from the terms of an agreement shall not contradict the legislation of the Kyrgyz Republic and the Sharia’h Standards, as wells as they shall not violate the public order and the moral and ethical principles of the parties to an agreement;

e) the following shall be obligatorily defined:

· subject of an agreement;

· the number and scope of the subject of an agreement;

· rights and obligations of the parties to an agreement.

If the terms of an agreement stipulate receipt of the profit, the agreement shall provide for distribution of profit between the parties.

1.4. The banks shall be entitled to approve in accordance with the established procedure the subtypes of standard agreements concluded to conduct certain transactions that correspond to the principles of Islamic of banking and finance.

1.5. All types of the standard agreements concluded by the bank in accordance with the principles of Islamic banking and finance shall be agreed in accordance with the established procedure with the bank’s Sharia’h Council.

1.6. The font used in the agreement with all appendices shall be the same throughout the text of an agreement. The font size shall be at least 12.

1.7. A client shall be entitled to repay an asset bearing credit risk ahead of schedule, provided that the bank is notified about it at least 30 days prior to the day of such repayment, moreover, a penalty shall not be imposed on a client in case of early repayment after six months from the moment of financing receipt. Early repayment by one member of the joint liability group (hereinafter referred to as the JLG) is possible with the written consent of the JLG participants.

Section II. Types of Standard Agreements Concluded under the Principles of Islamic Banking and Finance

Chapter 1. Mudaraba agreement

1.1. General provisions.

1.1.1. The Mudaraba agreement can be concluded in the following forms:

а) a restricted/special Mudaraba agreement, if an investor is entitled to establish a list of assets or objects for investing by a Mudarib. Meanwhile, a separate agreement shall be concluded between a Mudarib and the investor for each investment object;

b) an agreement on unrestricted/common Mudaraba, if a Mudarib is entitled to use the provided funds at his own discretion.

1.1.2. A Mudarib and an investor shall be the parties to the Mudaraba agreement. A bank can act both as an investor and as a Mudarib.

1.1.3. The Mudaraba agreement shall provide for a ban on misuse of the funds, including issue of the loans to third parties, and provision of gifts and donations for charitable purposes.

(As amended by Resolutions of the National Bank of the Kyrgyz Republic Board No. 21/10 as of May 31, 2017)

1.1.4. The Mudaraba agreement shall mandatorily contain a list of documents on the basis of which the parties are entitled to sign an agreement.

1.2. The Mudaraba agreement shall provide for the rights and obligations of the parties:

1.2.1. The rights and obligations of an investor provide for:

1) the duty of an investor to act in accordance with the terms of the agreement.

2) the duty of an investor to provide funds to the Mudarib within the terms established in the agreement;

3) the investor’s right to control expenditure of the funds provided by him;

4) the investor’s duty not to interfere with the current activities of the Mudarib for implementation of the agreement, limited to monitoring and consultations;

5) the investor’s right to advise Mudarib in the course of the agreement performance, including legal issues;

6) the investor’s right to check the progress of the agreement implemented by the Mudarib, and therefore the Mudarib submits to the investor any reports that the latter may request;

7) the investor’s right to receive profit within the terms established in the agreement;

8) the investor’s right to demand ahead of schedule from the Mudarib repayment of the amount provided under the agreement, including, at the expense of collateral provided by the Mudarib, in case of failure to fulfill or improper fulfillment of the terms of the Mudaraba agreement.

1.2.2. The rights and duties of the Mudarib shall include:

1) the duty of the Mudarib to act in accordance with the terms of an agreement;

2) the duty of the Mudarib to make all necessary efforts to achieve the purpose of an agreement - to obtain maximum profit;

3) the duty of the Mudarib to conduct full control over the quality of the business project being implemented in order to comply with the necessary requirements of the Sharia’h Standards and the terms of an agreement, as well as the financial discipline of funds spending;

4) the duty of the Mudarib to act personally (with participation of available labor resources) during fulfillment of an agreement. If in order to fulfillment of an agreement, execution of works outside the scope of the Mudarib’s activities/competence is required, the Mudarid shall be entitled to recruit third parties, who have the necessary knowledge or licenses and permits for performance of work under this agreement;

5) the duty of the Mudarib to act in good faith and in the manner that is the best for fulfillment of an agreement and achievement of the purpose thereof, in accordance with the terms of an agreement and the requirements of the law, and in the absence of such conditions and requirements - in accordance with the traditional business turnover or other commonly imposed requirements;

6) the right of the Mudarib to use the funds received from an investor only for those purposes stipulated in the Mudaraba agreement;

7) the duty of the Mudarib to maintain accounting of the use of funds received from an investor and funds (income) received during fulfillment of an agreement allowing to determine the profit received, which shall be distributed between the parties to the agreement, during the validity of the Mudaraba agreement. The Mudarib shall document all expenses related to fulfillment of the Mudaraba agreement;

8) the right of the Mudarib to independently conduct business activities without participation of an investor during fulfillment of an agreement, meanwhile the Mudarib can consult with an investor for the effective fulfillment of the Mudarab agreement;

9) the right of the Mudarib to receive remuneration in accordance with the Mudaraba agreement

1.3. Term of an agreement

The validity and fulfillment of an agreement shall be determined by the parties.

1.4. Method of collateral provision.

The agreement shall provide for the investor’s opportunity to obtain collateral from the Mudarib in order to secure the funds provided, as well as the investor’s right to collect the collateral to cover losses in case of unlawful actions, negligence or violation of an agreement by the Mudarib, as a result of which losses occurred.

1.5. Distribution of profit or payment of remuneration.

1.5.1. The Mudaraba agreement shall provide for the terms that the profit of each party to an agreement is determined in the share (percentage) ratio of the profit received by the Mudarib in the course of using the funds provided by an investor.

1.5.2. The following conditions shall be obligatorily included in the Mudaraba agreement:

1) if, as a result of the agreement fulfillment, the Mudarib has not made profit and has received losses, an investor incurs losses in the amount of provided funds, and the Mudarib in this case does not receive remuneration for his work. This rule for allocation of losses is effective if the losses arose not through the fault of the Mudarib;

2) if loss occurs as a result of the guilty or wrongful actions of the Mudarib, the losses shall be reimbursed at the expense of the Mudarib. Meanwhile, an investor shall be entitled to receive from the Mudarib the funds transferred under the agreement at the expense of collateral, and in case of insufficient collateral - at the expense of other assets of the Mudarib.

(As amended by Resolutions of the National Bank of the Kyrgyz Republic Board No. 49/8 as of December 21, 2016)

1.6. Termination of the Mudaraba agreement.

The Mudaraba agreement shall provide for the possibility of its termination in the following cases:

1) upon expiration of the agreement term;

2) as may be agreed by the parties to an agreement;

3) or in other cases provided for by an agreement.

An example of a standard Mudaraba agreement (restricted) is given in Aappendix 1 to this Regulation.

Chapter 2. Murabaha agreement

2.1. General provisions of the Murabaha agreement.

2.1.1. The parties to the Murabaha agreement may be a bank and a client, which/who has applied for purchase of a certain product by the bank or the goods owned by the bank at the time of the client’s request.

(As amended by Resolutions of the National Bank of the Kyrgyz Republic Board No. 21/10 as of May 31, 2017)

2.1.2. Under the Murabaha agreement, the bank undertakes, in its own name, to acquire at the client’s request the subject of the agreement, or the subject of the agreement owned by the bank at the time of the client’s request, and sell it to the latter by installments.

(As amended by Resolutions of the National Bank of the Kyrgyz Republic Board No. 21/10 as of May 31, 2017)

2.1.3. When selling the subject of an agreement to a client under the Murabaha agreement, a bank shall have the ownership right for the subject of an agreement.

2.1.4. The ownership right for the subject of an agreement passes to the client after full payment of the price of the subject of an agreement, unless otherwise stipulated by the terms of an agreement.

2.1.5. A bank can conclude an purchase and sale agreement independently and through an agent. As an agent, a bank can appoint a client, meanwhile a client acts at the expense of and on behalf and instruction of the bank, under the terms stipulated in the agency agreement, which shall reflect the following: the subject of an agreement, the names of the parties and the goods, conditions, terms of payment, documents confirming the operation of purchase and sale, other conditions.

If a client acts on behalf of the bank as an agent, the following conditions shall be observed:

а) the bank itself shall pay to the Seller for the goods without crediting the funds to the account of a client acting as an agent. The bank may provide funds to a client acting as an agent only in the following cases:

- if the seller of the goods is an individual entrepreneur who works in accordance with the current legislation of the Kyrgyz Republic;

- when the goods are purchased outside the Kyrgyz Republic.

At the same time, the size of the aggregate amount of funds provided to the clients acting as the agents within the framework of agency agreements shall be established by the National Bank;

b) the bank shall take documentary evidence from the seller that the sale was made.

2.1.6. All documents and agreements related to the sale and purchase of the subject of an agreement shall be on behalf of the bank, even if a client acts as a bank’s agent.

2.1.7. The bank shall obtain the subject of an agreement from the territory of the supplier or any other place that was specified in the delivery terms.

2.1.8. The bank may include the following conditions in the Murabaha agreement:

a) the bank shall not be liable for any or all defects in the goods after the goods have passed into possession of a client and a client shall be entitled to apply directly to the supplier for compensation;

(As amended by Resolutions of the National Bank of the Kyrgyz Republic Board No. 21/10 as of May 31, 2017)

b) if a client refuses to purchase the subject of an agreement after fulfillment of the Murabaha agreement, the bank shall be entitled to sell the subject of the Murabaha agreement to a third party, having assigned to a client the obligations to recover the bank’s expenses not covered by the cost of the sold goods related to purchase of the subject of an agreement.

2.1.9. The bank shall not be entitled to conduct Murabaha transactions:

a) in relation to precious metals (gold, silver, etc.) and any currency;

(As amended by Resolutions of the National Bank of the Kyrgyz Republic Board No. 21/10 as of May 31, 2017)

b) with working capital, where accounts receivable are used as collateral for the assets;

c) when refinancing a transaction.

2.1.10. The bank can sell the subject of an agreement if a client delays payments for more than the term specified in the agreement. If the bank sells the subject of an agreement, then those payments that have already been received from a client shall be reimbursed.

2.1.11. If a bank has received a pledge from a client, the client orders the bank to sell the pledge to cover the debt without applying to the court.

2.2. The Murabaha agreement shall provide for the price and payment procedure.

2.2.1. The Murabaha agreement shall provide for that the selling price of the subject of an agreement by the bank shall be determined by the parties as the sum of the purchase price and the agreed markup agreed by the parties. The markup may be set as:

- a fixed lump-sum amount paid;

- share of the value of the subject of an agreement.

An essential condition for the Murabaha agreement is mandatory indication and allocation in the selling price of the markup amount.

2.2.2. The Murabaha agreement may provide for that payment of the price for the subject of an agreement will be made by regular contributions on a short-term or long-term basis. And if a client does not make a regular payment for the subject of an agreement sold in installments within the established time limits, a client shall pay a forfeit (penalty, fine), meanwhile the amount of a forfeit accrued for the entire period of an agreement shall not exceed 20 percent of the amount of provided financing. At the same time, funds received in the form of a forfeit (penalty, fine) shall be directed to charitable purposes to the organizations that are not affiliated with the financial institution. Penalties and fines may be applied in the cases stipulated by the Sharia’h Standards.

2.2.3. The Murabaha agreement shall provide for that the costs included in the price of the subject of an agreement purchased under the Murabaha agreement include:

- insurance expenses;

-subsequent expenses of a bank related to purchase of the goods, as well as transportation costs, import duties and other expenses.

2.2.4. The Murabaha agreement shall stipulate that a bank, in proof of conclusion of aforementioned agreement and in securing execution thereof, may receive an advance from a client against payments due under the Murabaha agreement

2.2.5. When entering into the Murabaha agreement, all terms under which the transaction will be executed shall be stipulated, including:

a) the condition that all bank expenses, including payments to a third party, shall be included by the bank in the selling price. At the same time, expenses related to payment of the salaries to the bank’s employees cannot be included in expenses;

b) the selling price;

c) the amount of markup - the remuneration that the bank will receive from this transaction.

At the same time, the selling price or the markup cannot be set in an uncertain way, for example, depending on any indicators that will be known in the future. The selling price and markup, which depend on the indicators known to the client in advance, may not be set at the stage of entering into an agreement. The size of the markup cannot depend on time factors.

2.2.6. The Murabaha agreement may provide for the bank’s right to demand early repayment from a client in case of unreasonable delay in the next installment, subject to prior notification to the client of the payment terms.

2.2.7. The Murabaha agreement shall provide for the bank’s right in the event of the client's delay in payment for the subject of an agreement for a longer period compared to the one stipulated by an agreement, at its discretion:

a) to sell the goods to third parties with reimbursement to the client of the funds received from the latter for partial payment for the subject of an agreement, if any;

b) not to register the client’s ownership right for the goods until the subject of an agreement is paid in full.

2.2.8. A bank shall not charge from a client the fee and payment for the possibility of providing financing under the Murabaha agreement.

2.2.9. The expenses for preparation of the documents under the Murabaha agreement shall be divided between a bank and a client, unless otherwise provided for by an agreement. Meanwhile, all expenses of the parties shall be distributed among them fairly and taking into account the actual amount of work performed by each of the parties.

2.2.10. A bank may charge for preparation of a feasibility study if it is compiled at the request of a client and for his/her/its benefit and a client has agreed to pay for it.

2.3. Provision of the agreement fulfillment.

2.3.1. In order to ensure proper performance of the client’s obligations under the Murabaha agreement, a bank shall conclude with a client a pledge agreement for funds or other type of security. The funds transferred as a pledge cannot be invested by the bank, unless otherwise provided for by an agreement.

2.3.2. According to the client’s application, the amount transferred as a pledge can be credited against payment for the goods in accordance with the Murabaha agreement.

2.3.3. A bank shall return the pledge after a client fulfills his/her/its obligations under the Murabaha agreement.

2.3.3. A bank bears all risks associated with damage, destruction or loss of the goods during transportation or storage and, they cannot be covered by a pledge.

The sample of the standard Murabaha agreement is given in Appendix 2 to this Regulation.

Chapter 3. Ijarah Muntahiyah Bittamlik Contract

3.1. The Ijarah Muntahiyah Bittamlik Contract is a transaction that includes an Ijarah contract, under which a customer undertakes to redeem the leased property (asset), either at the end or in stages during the Ijarah period, in accordance with the Contract.

3.1.1. The Ijarah Muntahiyah Bittamlik Contract consists of the following documents:

- Customer’s application for the subject matter of the Ijarah Muntahiyah Bittamlik Contract;

- Ijarah contract to the basic Ijarah Muntahiyah Bittamlik Contract;

- Certificate of Acceptance and Transfer under the Ijarah Muntahiyah Bittamlik Contract;

- A promise to transfer ownership under the Ijarah Muntahiyah Bittamlik Contract.

3.2. General Provisions of the Contract.

3.2.1. The Ijarah Muntahiyah Bittamlik Contract is concluded by the bank on the basis of the customer’s application, as well as financial and legal documents necessary for making a decision on signing the Contract.

3.2.2. The contractual parties are the Lessee and the Lessor. The Bank acts as the Lessor.

3.2.3. The subject matter of the Ijarah Muntahiyah Bittamlik Contract may be any movable and immovable property, or a share in certain assets that may be in the indivisible shared ownership of the Lessor and the Lessee, regardless of whether they are partners or not.

3.2.4. The subject matter of the Ijarah Muntahiyah Bittamlik Contract may be insured.

3.2.5. The subject matter of the Ijarah Muntahiyah Bittamlik Contract should be used to ensure its security, and the benefits derived from the Ijarah Muntahiyah Bittamlik Contract shall comply with the legislation of the Kyrgyz Republic and the Sharia’h requirements.

3.2.6. The basis for the transfer of ownership of the subject matter of the Ijarah Muntahiyah Bittamlik Contract is an indication to the effect in the Donation or Sale Contract, which contains a promise to transfer ownership of the property by one of the following methods:

1) To sell for the agreed price or through an accelerating payment the remaining part of the lease amount;

2) To donate (transfer) it without indicating a reason;

3) To donate it after all payments are made.

3.2.7. The transfer of ownership to the property is carried out on the basis of a Donation or Sale Contract, which is concluded separately from the Ijarah Muntahiyah Bittamlik Contract and the promise given.

3.2.8. A promise to transfer ownership to the property by one of the methods provided for in Paragraph 3.2.6. is binding on the promisor. However, the promise should only be binding on one party, while the other party has a choice. This is necessary to avoid a mutual (binding) promise, which is prohibited by the Sharia’h law, as it is similar to the contract.

3.2.9. The contract shall provide for the conditions of the contract execution in the event of Force Majeure.

3.3. Rights and Obligations of the Parties:

3.3.1. Rights and Obligations of the Lessee:

1) To own and use the leased property on the terms specified in this Contract;

2) To impose requirements to the Lessor regarding the quality and completeness of the property at the time of acceptance of the leased property;

3) To refuse the leased property from the moment of signing the Contract until the moment of receiving the property, subject to compensation to the Bank for losses, as well as all expenditures associated with the purchase and registration of property, etc.;

4) To handle the property conscientiously both in terms of the period, conditions, methods of use, and in relation to the maintenance of the property;

5) To use the property only for its intended purpose in accordance with the Sharia’h standards, maintain it and comply with the rules of operation;

6) Not to carry out significant changes affecting the integrity of the property, except for the case when the written consent of the Lessor to perform such actions has been received;

7) Be liable for damage incurred by the Lessor through the fault of the Lessee.

8) To pay a certain amount by agreement of the parties, as a guarantee of the performance of their obligations to lease the property. The deposited amount is used only to compensate for damages in case of violation by the Lessee of the obligation to lease the property. By agreement with the Lessee, the Lessor may use it for investment on the basis of a Mudarabah contract concluded between the Lessor and the Lessee. This amount can be accepted towards the payment of regular lease amounts;

9) To conclude a sublease contract on terms different from the Ijarah Contract, with the consent of the Lessor, taking into account the requirements of the legislation of the Kyrgyz Republic and the Sharia’h.

3.3.2. Rights and Obligations of the Lessor:

1) In the case of property insurance, the insurance costs are borne by the Lessor, which are subject to reimbursement by the Lessee to the Lessor. If it is not possible to insure property in accordance with the Sharia’h standards, then the property can be insured by the traditional method, subject to the appropriate approval of the Sharia’h Board of the bank. After signing the contract, the Lessor cannot charge the Lessee any funds in excess of the established lease amount, with the exception of a penalty charged for the delay in the lease payment. The Lessor may also appoint the Lessee as an agent for property insurance at the expense of the Lessor;

2) The Lessor may purchase or manufacture the property described in the specifications at the request of the Lessee;

3) The Lessor may sell the leased property to a third party, informing him of the existence of the Ijarah Muntahiyah Bittamlik Contract, also informing the Lessee 30 calendar days in advance. In this case, all rights and obligations of the Lessor under the Contract will be transferred to the new owner;

4) The Lessor, in agreement with the Lessee, carries out the main overhaul of movable and immovable property that is the subject matter of the Ijarah Muntahiyah Bittamlik Contract. At the same time, changes are made to the lease payment schedule according to the expenses incurred. The Lessee performs current or periodic (normal) technical repairs of immovable and immovable property that is the subject matter of the Ijarah Muntahiyah Bittamlik Contract at his own expense;

5) The Lessor shall be liable for the leased property during the term of the Ijarah Muntahiyah Bittamlik Contract, unless the Lessee commits any misconduct or negligence in relation to the leased property.

3.4. Contract Duration

The Ijarah Muntahiyah Bittamlik Contract may be terminated:

1) By mutual agreement;

2) In case of violation of the terms or termination of lease payments;

3) In case of damage to the leased property;

4) Upon expiration of the Ijarah Muntahiyah Bittamlik Contract;

5) In case of selling property to the Lessee.

The Ijarah Muntahiyah Bittamlik Contract does not terminate due to the death of either party. In the event of the Lessee’s death, his rights and obligations under the Ijarah Muntahiyah Bittamlik Contract pass to the heir. However, the Lessee’s heirs may terminate the Ijarah Muntahiyah Bittamlik Contract in case of providing evidence that the performance of the Ijarah Muntahiyah Bittamlik Contract is onerous or there is no need for the Ijarah Muntahiyah Bittamlik Contract after the death of the ancestor.

A sample model Ijarah Muntahiyah Bittamlik Contract is given in Appendix 3 to the Regulation “On the Requirements for Model Contracts Concluded under the Principles of Islamic Banking and Finance.”

(As amended by Resolution No.2022-П-12/9-4-(RLA) of the National Bank of the KR Board dated February 24, 2022)

Section III. Final Provisions

3.1. A bank, at its own discretion, may introduce additional terms, that are not inconsistent with this Regulation and the Sharia’h Standards, to the agreement concluded in accordance with the principles of Islamic banking and finance.

Appendix 1

to the Regulation

“On the requirements to the standard

agreements concluded under

the principles of Islamic banking

and finance”

Mudaraba agreement (restricted/special).

No. _______

Bishkek city

________________ _____, 200_

________________________________________________________________________ in the person of ___________________________________________________ acting on the basis of the _________________________________________________________________, hereinafter referred to as the “Bank” on the one hand, and ___________________________________________ in the person of ____________________________________________________________ acting on the basis of the ___________________________________________________________, hereinafter referred to as the “Mudarib” on the other hand, collectively referred to as the “Parties”, concluded this agreement as follows.

1. Subject of the agreement.

1.1. In accordance with this agreement, the Bank provides the funds to the Mudarib, and the Mudarib uses these funds applying his/her/its own labor resources, and, if necessary, hiring other organizations provided that there are necessary permits, for implementation of a business project for ____________________________________________________________________________ in order to obtain profit and distribute thereof among the Parties in accordance with this Agreement.

The Mudarib undertakes to ______________________________________________, as well as to perform all legal and factual actions within his competence and ensure _____________________________________________________ no later than the expiry of __________________________________________ from the date of signing this agreement.

1.2. The Mudaraba under this agreement shall be restricted/special, therefore the Mudarib is entitled to send provided funds strictly to _____________________________________________________________________________

1.3. The value of ___________________________________________ (business project) is determined by the parties in the amount of KGS___________________________________________.

1.4. The Mudaraba under this agreement shall be open, in this respect the Bank is entitled upon the first request to obtain ahead of schedule from the Mudarib the money provided if the Mudarib violates the terms of the agreement, and the Bank is not entitled to demand a part of the profit.

2. Financing procedure

2.1. The Bank, in accordance with this agreement, shall provide the Mudarib with the funds in the amount of KGS____________________________________________.

2.2. The Mudarib, with the assistance of the Bank, shall confirm:

- the schedule of works on __________________________________________, which is Appendix 1 to this agreement;

- the schedule of work financing provided by the Parties, which is Appendix 2 to this agreement.

The Bank shall provide funds in tranches, according to the schedule of work financing, which is Appendix 2 to this agreement, within the limits provided by this schedule. The total amount of the funds financed by the Bank shall not exceed the amount specified in paragraph 2.1. of this Agreement.

2.3. The Bank shall provide each subsequent tranche only if the Mudarib submits a report on the use of the previous tranche satisfying the Bank.

2.4. The Bank shall provide each tranche to the Mudarib on the application thereof by transferring the funds to his account, or to the account of the suppliers and contractors who have concluded contractual relations with the Mudarib. Each application shall be provided by the Mudarib to the Bank at least 3 (three) days before the date of the funds transfer, and the amount specified in the application cannot exceed the amount specified in the schedule of the funds transfer.

2.5. In case of an increase in the cost of __________________________________ (business project), the schedule of investments necessary for completion of ____________________________ (business project) shall be determined by the parties in the additional agreement.

2.6. Transfer of funds to the accounts of the Suppliers, at the request of the Mudarib, or cash withdrawal to the Mudarib shall be considered proper fulfillment of the obligations by the Bank.

2.7. 100% (one hundred) percent of funds received during implementation of the __________________________________ (business project) or after completion thereof, from the persons acquiring ________________________________ (the results of the business project), shall be sent to the Mudarib for reimbursement of funds received from the Bank for this project, which are specified in paragraph 2.1. of this Agreement. The remaining amount shall be distributed according to paragraphs 3.1. and 3.2. of this Agreement. The Mudarib shall transfer to the Bank the amounts indicated in this paragraph within 5 working days from the date of entering by the Mudarib into the agreement on implementation of _______________________________ (the results of the business project).

2.8. If in the course of implementation of paragraph 2.7. the Mudarib has fully repaid the debt to the Bank, in the amount according to paragraph 2.1. with the account of paragraph 3.3., the remaining part of incoming funds shall be distributed by the parties in the following proportion: _____% to the Bank, _____% to the Mudarib. The Mudarib shall transfer to the Bank the amounts specified in this paragraph within 5 working days from the date the Mudarib entered into the agreement on __________ (the result of the business project).

3. Procedure for profit and loss distribution.

3.1. Funds in the amounts specified in paragraph 2.1., subject to redemption in accordance with paragraph 2.7. and 2.8. and an increase in the cost of ______________________________ (business project) in accordance with paragraph 3.3., from implementation of _________________ (the results of the business project), shall be transferred to repay the Mudarib’s debts to the Bank.

3.2. The amount of funds upon implementation of _______________________ (the results of the business project) specified in paragraph 1.2. of this Agreement, remaining after distribution thereof in accordance with paragraph 3.1. of this Agreement shall be distributed in the following proportion:

a) ______% to the Bank;

b) ______% to the Mudarib.

3.3. In case of an increase in the cost of _____________________________ (business project) specified in paragraph 1.2. of this Agreement, this appreciation shall be financed as follows:

a) ______% of the amount necessary to complete _______________________ (business project) shall be invested by the Bank;

b) ______% of the amount necessary to complete _____________________________ (business project) shall be invested by the Mudarib.

3.4. In case of an increase in the cost of _______________________ (business project) specified in paragraph 1.2. of this Agreement, upon approval by the parties, the final amount is additionally determined in paragraph 2.1, with the corresponding adjustments in paragraph 3.1. and 3.2.

3.5. Distribution of the amounts to be allocated according to Chapter 3 shall be made within 5 days from the date the Mudarib enters into an agreement for implementation of _____________________________________ (the results of the business project) or a part thereof within _______________________.

3.6. If losses occurred in the course of implementation of an agreement due to Mudarib’s guilty or unlawful actions, these losses shall be covered by the Mudarib. Meanwhile, the Bank shall be entitled to receive from the Mudarib the amount transferred earlier under the agreement at the expense of collateral (pledge), and in case it is not sufficient, at the expense of other property of the Mudarib.

The absence of guilt shall be proved by the Mudarib.

(As amended by Resolutions of the National Bank of the Kyrgyz Republic Board No. 49/8 as of December 21, 2016)

4. Rights and obligations of the Bank.

4.1. The Bank is obliged:

(a) to provide the Mudarib with the agreed amount in the manner prescribed by the agreement (paragraphs 2.2., 2.3., 2.4., and 2.5.);

(b) to monitor expenditure of the funds received through tranches;

(c) not to interfere with the Mudarib’s current activities carried out for fulfillment of an agreement, limited to general supervision and consultations;

(d) to agree with the Mudarib the price for implementation of _______________________ (the results of the business project) specified in paragraph 1.2. At the same time, the Parties agreed that specified in paragraph 1.2. ___________________________________ (the result of the business project) shall be implemented during the term of this Agreement at the price mutually agreed by the parties, which is not less than KGS ______________________ per unit of the goods.

4.2. The Bank’s rights:

(a) The Bank shall be entitled to advise the Mudarib in the course of implementation of this Agreement, including legal issues and the issues of construction expertise involving relevant organizations;

(b) The Bank shall be entitled to monitor the progress of using the amount received by the Mudarib;

(c) The Bank shall be entitled to verify the progress of implementing this agreement by the Mudarib, in this respect the Mudarib at least submits to the Bank any reports requested by the latter;

(d) The Bank shall be entitled to provide the Mudarib with the services specified in the Bank’s license and in the appendix thereto;

(e) The Bank shall be entitled to receive the amounts specified in the agreement within the terms stipulated in the agreement;

(f) In case of failure to fulfill the terms of this Agreement, the Bank shall be entitled to demand from the Mudarib repayment of the amount provided under the Agreement, including at the expense of the pledge.

5. Rights and obligations of the Mudarib.

5.1. Mudarib is obligated:

(a) to act in accordance with the requirements of the agreement;

(b) to take all necessary efforts to achieve the purpose of the agreement - to obtain maximum profit;

(c) to maintain full control over the quality of ________________________ (a business project being implemented) in order to comply with the necessary requirements of the standards, norms and regulations, etc., as well as the financial discipline of funds spending;

(d) to act personally (with involvement of available labor resources) during fulfillment of an agreement. If to implement an agreement it is necessary to commit certain actions, which do not fall in the sphere of the entrepreneur’s activity due to the established practice, the Mudarib shall be entitled to attract third parties who have the necessary licenses and permits for carrying out the work under this Agreement;

(e) to act in good faith and in the manner that is the best for fulfillment of the agreement and achievement of the purpose, in accordance with the terms of an agreement and the requirements of the laws, and in the absence of such conditions and requirements - in accordance with the traditional business turnover or other requirements usually imposed;

(f) to use the funds received from the Bank in accordance with the terms of the agreement. In the course of implementation of the agreement, the Mudarib shall not be entitled to use the funds provided for purposes not provided for in this Agreement;

(g) to keep records of the use of funds (income) received from the Bank and being received during implementation of this Agreement, which allows, during the validity of this Agreement, to determine received profit to be distributed between the parties to the agreement. All costs related to fulfillment of this Agreement shall be documented and accounted. The report on incomes and expenditures for the previous month shall be provided up to the 5th day on a monthly basis;

(h) to provide the reports satisfactory to the Bank on the use of the previous tranche, before receiving the subsequent tranche, provided for in paragraph 2.3. and paragraph 2.5. of this Agreement;

(i) to agree with the Bank the implementation price of ______________________________ (the results of the business project) specified in paragraph 1.2.;

(j) not to terminate this Agreement until full implementation thereof;

(k) to notify the Bank within 3 business days of implementation of ____________________________ (the results of the business project).

5.2. The Mudarib is entitled:

(a) to independently, without the Bank’s participation, conduct business activities during the performance of the agreement, however, the Mudarib shall be obliged to consult with the Bank for the effective implementation of the agreement;

(b) to receive remuneration for fulfillment of this Agreement, in accordance with paragraph 3.2.

6. Methods to ensure fulfillment of obligations under the agreement

6.1. In order to ensure proper performance of the obligations under this Agreement, the Mudarib undertakes to provide the Bank with a pledge _______________________________________________________________ (hereinafter referred to as the “pledged property” or “pledged item”).

6.2. The Mudarib, who failed to fulfill or improperly fulfilled the obligation under this Agreement, shall be liable if he does not prove that proper fulfillment was impossible due to force majeure, that is, extraordinary circumstances that are unavoidable under these conditions.

6.3. If in the course of fulfillment of the agreement the losses occurred as a result of the Mudarib’s guilty or unlawful actions, these losses shall be covered by the Mudarib. At the same time, the Bank shall be entitled to receive from the Mudarib the amount transferred earlier under the agreement at the expense of collateral, and, if it is not sufficient - at the expense of the Mudarib’s other property.

The absence of guilt shall be proved by the Mudarib.

(As amended by Resolutions of the National Bank of the Kyrgyz Republic Board No. 49/8 as of December 21, 2016)

7. Violation of the obligations and responsibility.

7.1. The Mudarib is believed to violate his obligations under this Agreement, if the subparagraphs specified in paragraph 5.1 of this Agreement are violated.

7.2. If a penalty is imposed in accordance with the Sharia’h Standards for violation of the terms of the agreement as a result of the Mudarib’s guilty or unlawful actions, the amount of the penalty assessed for the entire period of the agreement shall not exceed 20 percent of the amount of financing. The funds received in the form of a penalty shall be sent to charitable purposes. The bank’s Sharia’h Council shall ensure control over the targeted use of the funds received in the form of a penalty.

(As amended by Resolutions of the National Bank of the Kyrgyz Republic Board No. 49/8 as of December 21, 2016)

8. Termination of obligations under the agreement

8.1. The procedure for agreement termination on the initiative of any party.

Each of the parties to the agreemet may terminate it unilaterally, notifying the other party 10 days before the actual termination, except for the following cases:

(a) when the Mudarib started to fulfill the agreement and is already using the funds in the course of entrepreneurial activity;

(b) if the Parties have determined the period during which the agreement will be valid.

8.2. Other grounds for termination of the obligation:

(a) improper performance of the agreement;

(b) approval of the parties;

(c) when the Mudarib incurred losses in the amount equal to the amount of funds provided to him, and the Bank has fully repaid the amount transferred earlier at the expense of the Mudarib’s collateral if the losses arose due to the Mudarib’s fault or his wrongful actions/omissions.

9. Term and termination of the agreement.

9.1. This Agreement shall enter into force from the moment of signing thereof and shall be terminated after implementation of _____________________________________ (the results of the business project) specified in paragraph 1.2. of this Agreement, and transfer of funds received from the sale to the Bank, or by agreement of the parties, executed proper in writing in the form of an additional agreement.

The implementation of ________________________________ (business project) specified in paragraph 1.2. of this Agreement shall be carried out within the period not exceeding ___ months from the date of completion __________________________________________ (business project).

9.2. The inability of the Bank to exercise or defend any of its rights under this Agreement or delay in implementation thereof, or the inability to exercise or defend any judicial remedy they may have against the Mudarib, or delay in implementation or defending of such judicial remedy does not prejudice such right or remedy and shall not be interpreted as a rejection from them.

9.3. In case of early termination of this Agreement on the initiative of the Mudarib, the Mudarib shall repay to the Bank the amount invested by the Bank at the time of termination of this Agreement taking into account paragraphs 2.1, 2.2, and 2.5 of this Agreement, and shall pay a penalty in the amount of KGS _______________. Meanwhile, the amount of a forfeit accrued for the entire duration of the agreement shall not exceed 20% of the amount of financing. The funds received in the form of a penalty shall be sent to charitable purposes. The bank’s Sharia’h Council shall ensure control over the targeted use of the funds received in the form of a forfeit.

(As amended by Resolutions of the National Bank of the Kyrgyz Republic Board No. 49/8 as of December 21, 2016)

10. Unforeseen circumstances (Force Majeure)

10.1. Neither Party shall be liable in the event of non-fulfillment or untimely fulfillment of any obligations under the Agreement and shall not be entitled to demand compensation for losses incurred or compensation for lost revenues, if such failure or delayed fulfillment is due to force majeure circumstances, the presence of which is confirmed in writing by an authorized state or administrative body.

If it is impossible to obtain such confirmation, the burden of proving the occurrence of force majeure circumstances shall be imposed on the violating Party.

10.2. Force majeure circumstances include: natural disasters (floods, earthquakes, storms, fires and other natural or technical disasters), epidemics, military actions, sabotage.

In these cases, the Party that failed to fulfill or untimely fulfilled any obligations under the Agreement shall immediately inform the other Party about the occurrence of force majeure circumstances and their consequences (providing notification and other information about force majeure to the other Party) and take all possible measures with a view to limiting as far as possible any negative consequences caused by these circumstances.

10.3. If the Party, which did not perform its obligations due to the force majeure circumstances, does not notify the other Party within 10 days from the date of such events, such Party shall lose the right to refer to these circumstances as force majeure, except the cases, if these circumstances do not allow to notify the other Party within the specified time.

10.4. If the force majeure circumstances are of such a nature that the purposes of the Parties that caused the conclusion of the Agreement are damaged substantially and irreparably or performance of the obligations of any of the Parties under the Agreement becomes extremely difficult for more than six (6) consecutive months, the Parties, within one month after occurrence of these circumstances or a six-month failure to perform obligations by one of the Parties caused by these circumstances, shall take a joint decision on the further fate of the Agreement.

11. Governing law and disputes settlement.

11.1. This Agreement shall be governed and interpreted in accordance with the legislation of the Kyrgyz Republic.

11.2. Any disagreement that may arise between the parties to this Agreement and any claim brought by one party against the other party arising from this Agreement that has not been settled by agreement of the parties shall be resolved by judicial procedure in accordance with the legislation of the Kyrgyz Republic.

12. Notices.

12.1. (Became invalid as per Resolution No. 7/3 of the National Bank of the Kyrgyz Republic Board as of February 10, 2016).

12.2. This Agreement shall be made and signed in 3 copies, one for a notary’s office and one for each of the parties. All copies of the text of this Agreement signed by both parties shall have equal legal force.

12.3. All amendments and additions to this Agreement shall be drawn up in the form of additional agreements in writing, and shall be signed by the authorized representatives of the parties.

12.4. Any notice or request that shall be given or made under this Agreement by each party shall be in writing, with subsequent confirmation. Any notice or request shall be deemed to have been handed in or properly made when delivered from hand to hand, sent by mail or other means of communication (telefax, e-mail, etc.) to the address specified in paragraph 12.6 or to such address as the addressee indicated in the notice sent to the party sending such notice or making such a request.

12.5. The Parties hereby confirm that they have been acquainted with and agree with the terms of this Agreement.

12.6. In order to achieve the objectives specified in the above Article 12.4, the parties submitted the following addresses:

Bank:		Mudarib:
Chairman of the Board (or a person who received a power of attorney) ____________________________ ____________________________ (signature, seal)		Passport: ________________ issued by ___________________ MIA ________ Certificate of registration of a private entrepreneur Reg. No. ____________, GCEO ___________ Residing at the address: ________________________________ ____________________________ ____________________________ (signature, seal)

Appendix 2

to the Regulation

“On the requirements to the standard

agreements concluded under

the principles of Islamic banking

and finance”

Murabaha agreement

Bishkek city

________________ ______, 2009

________________________________________________________________________ in the person of ___________________________________________________, acting on the basis of the _________________________________________________________________, hereinafter referred to as the “Bank” on the one hand, and ___________________________________________ in the person of ____________________________________________________________ acting on the basis of the ___________________________________________________________, hereinafter referred to as the “Client” on the other hand, collectively referred to as the “Parties”, in view of the fact that

the Client applied to the Bank for an application for financing under the Islamic principles through acquisition by the Bank by order of the Client from

_____________________________________________________________________________

(seller of the goods)

of the following goods:

_____________________________________________________________________________

(name of the goods)

_____________________________________________________________________________

(quantity of the goods)

_____________________________________________________________________________

(other characteristics of the goods)

(hereinafter referred to as the “Goods”) and the subsequent sale by the Bank of this Goods to the Client under the Murabaha agreement,

and since the Parties made a preliminary exchange of the letters during which the Client offered the Bank to purchase the Goods for the purpose of subsequent sale by the Bank of this Goods to the Client under the Murabaha agreement and gave the Bank a promise to buy this product from the Bank, under the Murabaha agreement,

and the Bank accepted the offer and undertook to purchase the Goods by the Client’s order after which to sell the Goods to the Client under the Murabaha agreement,

have concluded this agreement as follows:

1. The Bank shall sell, in accordance with the terms and conditions of this Agreement, and the Client shall purchase based on an installment plan the Goods at the selling price of the Goods specified in paragraph 5 of this Agreement. Meanwhile, the Bank reserves the right to check the financial status of the Client until the full payment of the selling price of the Goods.

2. The alienated Goods shall belong to the Bank on the basis of ownership right, has not been sold to anyone, has not been donated, pledged, leased, transferred for free use, is not in dispute, under the prohibition (arrest), and is free from the rights of third parties.

3. The alienated Goods shall be transferred by the Bank to the Client under the acceptance certificate within ___ days from the date of __________________________________________________.

From the moment of signing by the Parties of the Goods acceptance certificate, the risk of accidental loss or damage to the Goods, as well as all risks related to the safety and content of the Goods shall be transferred to the Client, from that moment the Bank is not responsible for the condition and safety of the Goods.

4. By signing the acceptance certificate of the Goods, the Client expresses his agreement with the quality and condition of the purchased Goods. If the Client does not sign the Goods acceptance certificate, the Bank shall be entitled to refuse to execute this Agreement, terminate it unilaterally, and then sell the Goods to third parties and to enforce the pledged property in the order determined in accordance with the pledge agreement.

5. By agreement of the Parties, the selling price of the Goods shall be determined in the amount of KGS_____________________________, of which:

a) KGS ___________________________________________ - the price of purchase by the Bank of the alienated Goods,

b) KGS___________________________________________ - the amount of fees, taxes and duties paid by the Bank and provided for by the legislation of the Kyrgyz Republic,

c) KGS ___________________________________________ - the amount of the Bank’s expenses incurred due to purchase by the Bank of the Goods and entering into this Agreement,

d) KGS ___________________________________________ - the amount of the markup.

6. The Client shall pay to the Bank the selling price of the Goods within ______ months from the date of signing by the Parties to this Agreement by regular installments according to the payment schedule. The Client shall make monthly payments under this agreement in accordance with the payment schedule to the cashier’s office in cash or by transfer to the Bank’s account. In this case, the final settlement shall be made no later than on ______________ ____, 200__.

7. Since the final settlement, the Parties will not have any claims against each other. At the same time, the Parties are notified that in case of a dispute between the Parties, the selling price of the Goods specified in this Agreement shall be the initial price.

8. The proper performance of the Client’s obligations under this Agreement shall be secured by the pledge agreement No. ______ as of ______________________, concluded between the Parties to this Agreement and __________________________________________________________________ (hereinafter referred to as the “pledge agreement”).

9. If the Client fails to fulfill or improperly fulfills its obligations under this Agreement, the Bank shall be entitled to enforce the pledged property in the order specified in accordance with the pledge agreement.

10. This agreement shall enter into force upon signature by the Parties. The ownership right for the Goods passes from the Bank to the Client from the moment of signing by the Parties of the Goods acceptance certificate.

11. If the Client fails to make a regular payment in the period established by the payment schedule for the Goods sold in installments, the Client shall pay a penalty in the amount of _________% of the financing amount. At the same time, the amount of the forfeit accrued for the entire term of the agreement shall not exceed 20% of the amount of financing. The funds received in the form of a penalty shall be sent to charitable purposes. The bank’s Sharia’h Council shall ensure control over the targeted use of funds received in the form of a forfeit.

(As amended by Resolutions of the National Bank of the Kyrgyz Republic Board No. 49/8 as of December 21, 2016)

12. The contents of this Agreement are explained to the Parties; the Parties are acquainted and agree with all the terms of this Agreement.

13. The Parties confirm that they know the language in which this agreement is prepared for signing, they are not incapacitated, they do not suffer from diseases that prevent understanding the essence of this Agreement, as well as that there are no circumstances that force them to make a deal on extremely unfavorable terms.

14. All costs associated with the conclusion of this Agreement shall be borne by __________________________________________.

15. All appendices provided for in this Agreement are its integral part (they are attached).

16. This agreement is made in 2 copies in ________________ language, one copy for each of the Parties. All copies shall be of equal legal force.

Signatures:

1. ______________________________________________________

2. ______________________________________________________

Appendix 3

to the Regulation

“On the Requirements for Model Contracts

Concluded under the Principles of

Islamic Finance”

CUSTOMER'S APPLICATION

For the Subject Matter of the Ijarah Muntahiyah Bittamlik Contract

_____________________________________ requests to purchase and transfer the following property under the Ijarah Contract on the following conditions:

Information in the subject matter of the Ijarah contract
Name of the subject matter (make, model and others)
Cost
Quantity
Other essential characteristics of the subject matter necessary for a customer.
Condition of the subject matter (new or pre-owned)
Information about a supplier / seller of the subject matter of the Ijarah contract

Terms of transaction

Date of application for the Ijarah Contract “__” ____________, 20__

___________________

(Signature)

IJARAH CONTRACT

To the Basic Ijarah Muntahiyah Bittamlik Contract

City ________

“__” ________________ 20____

________________________________________________________________________ represented by __________________________________________________ , acting under the _________________________________________________________________ , hereinafter referred to as the “Lessor”, on the one hand, and _____________________________________ represented by _________________________________________________________________, acting under ________________________________________________________________, hereinafter referred to as the “Lessee”, on the other hand, jointly referred to as the “Parties”, have entered into this Ijarah Muntahiyah Bittamlik Contract as follows.

1. Subject Matter of the Contract

1.1. In accordance with this Contract, the Lessor acquires ownership from the Seller of _________________________ (hereinafter referred to as the Property) upon the application of the Lessee and leases it to the Lessee for temporary possession and use for an agreed period, and on a paid basis.

1.2. The Lessor transfers to the Lessee: _________________________________, for use to ______________________________________________________________.

1.3. The characteristics of the property are indicated in the Transfer Certificate at the time of its transfer to the Lessee (Appendix 1).

1.4. The lease payment becomes mandatory from the moment the contract is concluded. The right of the Lessor to lease payments comes after signing the Acceptance Certificate and from the time when the Lessee begins to use the property or when the Lessor makes the use of the property available to the Lessee. The Lessee undertakes to make lease payments within the time limits specified in Paragraph 1.6. hereof.

1.5. The subject matter of the Contract hereunder is owned by the Lessor during the entire term of this Contract, and the Lessee is the user of the property.

1.6. The lease term of the property is set from “____” _________________ 20___ to “____” __________________ 20___

2. Rights and Obligations of the Parties

2.1. The Lessee has the right:

2.1.1. To own and use the leased property on the terms specified herein;

2.1.2. To file claims to the Lessor regarding the quality and completeness of the Property at the time of acceptance of the leased property;

2.1.3. To refuse the leased property from the moment of signing the Contract until the moment the Property is received for use, subject to reimbursement to the Lessor of the costs associated with the registration of the property.

2.2. The Lessee undertakes:

2.2.1. To handle the property conscientiously both in terms of the period, conditions, methods of use, and in relation to the maintenance of the property;

2.2.2. To use the property only for its intended purpose in accordance with the Sharia’h standards, maintain it and comply with the rules of operation;

2.2.3. Not to carry out significant changes affecting the integrity of the property, except for the case when the written consent of the Lessor to perform such actions has been received;

2.2.4. Be liable for damage incurred by the Lessor through the fault of the Lessee;

2.2.5. To pay a certain amount by agreement of the parties, as a guarantee of the performance of their obligations to lease the property. The deposited amount is used only to compensate for damages in case of violation by the Lessee of the obligation to lease the property. By agreement with the Lessee, the Lessor may use it for investment on the basis of a Mudarabah contract concluded between the Lessor and the Lessee. This amount can be accepted towards the payment of regular lease payments;

2.2.6. To conclude a sublease contract on terms different from the Ijarah Contract, with the consent of the Lessor, taking into account the requirements of the legislation of the Kyrgyz Republic and the Sharia’h.

2.3. The Lessor has the right:

2.3.1. To possess the ownership of the Property until the Lessor transfers ownership of the Property to the Lessee;

2.3.2. To transfer all his rights and obligations under this Contract to a third party by mutual agreement of the parties with the obligatory conclusion of the relevant Ijarah Muntahiyah Bittamlik Contract in accordance with the legislation of the Kyrgyz Republic;

2.3.3. To check the intended use of the leased property at any time during the entire lease term under this Contract;

2.3.4. To collect an amount in excess of the due lease payment or an additional share of the due lease amount in the event that the Lessee unreasonably delays the lease payment, indicating that the amount will be directed to charitable purposes in accordance with the internal policy of the bank, approved by the Sharia’h Board;

2.3.5. To require the Lessee to repay overdue lease payments in the event of an unreasonable delay in the next installment of lease payments, subject to the Lessee’s reminder of the payment deadlines.

2.4. The Lessor undertakes:

2.4.1. To provide the Property to the Lessee on the terms specified herein;

2.4.2. To ensure the complete safety of the original documents establishing the ownership of the Property for subsequent transfer to the Lessee after the latter fulfills all his obligations;

2.4.3. At the written request of the Lessee, provide an account statement;

2.4.4. To carry out the overhaul of movable and immovable property that is the subject matter of the Ijarah Muntahiyah Bittamlik Contract in agreement with the Lessee. In this case, the lease payment schedule is updated according to the expenditures incurred;

2.4.5. Be liable for the Leased Property during the term of the Lease, if the Lessee does not commit any misconduct or negligence in relation to the Leased Property.

3. Lease Security

3.1. Proper fulfillment of the customer’s obligations hereunder is secured by Collateral Contract No. _____ dated ____________________, concluded between the contractual parties.

3.2. Full and timely payment of debts, other fees, as well as the proper performance of other obligations of the Lessee under this Contract is backed by collateral.

3.3. In case of non-fulfillment or improper fulfillment by the Lessee of the obligations stipulated by this Contract, the Lessor has the right to foreclose on the property to be collateralized in the manner determined in accordance with the Collateral Contract.

4. Termination of Obligations

Under the Contract and Settlement Procedure

4.1. Disputes and disagreements are settled in the manner prescribed by the legislation of the Kyrgyz Republic. In case of impossibility to resolve disputes by agreement of the parties, they are referred to the judicial authorities under the established procedure.

4.2. This Contract may be terminated:

1) By mutual agreement;

2) In case of violation of terms or termination of lease payments;

3) In case of damage to the leased property;

4) Upon expiration of the term of the Ijarah Muntahiyah Bittamlik Contract;

5) In case of selling property to the Lessee.

5. Circumstances of Insuperable Force (Force Majeure)

5.1. If the Lessee’s failure to perform his obligations or their improper performance under this Contract is the result of circumstances of insuperable force, such as flood, fire, earthquake and other natural or man-made disasters, as well as military actions, blockade, acts or actions of state bodies, the introduction of an emergency provisions, riots, etc., the obligations of the Lessee under this Contract do not terminate, and the terms of performance can be proportionally postponed with the consent of the Lessor for the duration of such circumstances.

5.2. The Parties are released from liability for non-fulfillment or improper fulfillment of their obligations under this Contract, if it is caused by the circumstances of insuperable force (Force Majeure), the existence of which is confirmed in writing by an authorized state or administrative body.

If it is impossible to obtain such confirmation, the burden of proving the Force Majeure lies with the breaching party.

5.3. Force Majeure include: natural disasters (floods, earthquakes, fires and other natural or man-made disasters), epidemics, the introduction of martial law in the relevant territory, riots.

In these cases, the affected party s obliged to notify the other party immediately in writing of the occurrence of Force Majeure and their consequences, as well as take all possible measures to limit as much as possible any negative consequences caused by these circumstances.

6. Concluding Provisions

6.1. The Lessee confirms that he has read the contents of this Contract and accepts all the conditions specified herein, as well as receiving an explanation from the Lessor about all the consequences of non-fulfillment or improper fulfillment of the obligations.

6.2. This Contract shall enter into force from the date of its signing by the parties and is valid until the Lessee performs all his obligations under this contract in full.

6.3. This Contract is made in ___ copies, each party holding one copy. All copies of the text of this contract signed by the parties are of equal legal force.

6.4. All changes and additions hereto are executed by an additional agreement signed by the parties, and are an integral part of this Contract. At the same time, all changes and additions hereto should not contradict the legislation of the Kyrgyz Republic in force, as well as the rules and principles of the Sharia’h.

6.5. After the parties perform their obligations in accordance with this Contract in full, they do not have any claims to each other.

6.6. Annexes to this contract are its integral part.

7. Details and Signatures of the Parties

Lessor	Lessee



______________________(Position)
______________________ (Full name)
_______________________signature, seal

Appendix 1

CERTIFICATE

of Transfer and Acceptance to Ijarah Muntahiyah Bittamlik Contract

No. __ dated “____ ”__________ 20__

We, the undersigned, on behalf of ____________, on the one hand, and on behalf of ____________, on the other hand, have drawn up this Certificate stating that the Lessor has transferred, and the Lessee has accepted:

Ser. No.	Name of equipment/property	Description of equipment/property	Quantity	Note

This Certificate has been drawn up on “____ ”__________ 20__ in two originals, each party holding one copy.

Details and Signatures of the Parties

LESSOR	LESSEE



______________________(Position)
______________________ (Full name)
______________________signature, seal

PROMISE OF OWNERSHIP

Transfer under the Ijarah Muntahiyah Bittamlik Contract

City __________

“____” ________________ 20____

2. Subject Matter of the Promise

1.1. The Lessor gives a promise to the Ijarah Muntahiyah Bittamlik contract No. __________ dated _____________ to transfer ownership of the property from the Lessor to the Lessee at the end of the Ijarah Muntahiyah Bittamlik Contract, provided that all the contractual terms are fulfilled without violations.

1.2. This is a bare promise, according to which the Lessor undertakes that if the Lessee repays all lease payments in a timely manner and in full, the Lessor undertakes (one of the following options is selected):

1) To sell the remaining part of the lease amount for the agreed price or through an advanced payment;

2) To donate (transfer) it without indicating a reason;

3) To donate it after all payments are made under the Contract.

1.3. The promise is bare and binding only on the Lessor.

1.4. This obligation is drawn up in 2 originals, once copy is transferred to the Lessee.

3. Lessor’s details

Lessor

______________________(Position)

______________________ (Full name)

(As amended by Resolution No.2022-П-12/9-4-(RLA) of the National Bank of the KR Board dated February 24, 2022)