National Bank of the Kyrgyz Republic

Creation date: 2018-05-10

Approved

by Resolution No. 19/2 of the National Bank of the Kyrgyz Republic Board

as of June 14, 2013

REGULATION

on Minimum Requirements to Pricing Policy of Banking, Payment Services and Services Delivered by Microfinance Organizations

(As amended by Regulations of the National Bank KR Board No. 45/15 as of November 27, 2013, No. 48/11 as of December 14, 2016, No. 2017-P-14/23-16 as of June 8, 2017)

I. General Provisions

1. (Became invalid according to Resolution No. 2017-P-14/23-1 of the National Bank KR Board as of June 8, 2017)

2. The purpose of this Regulation is to ensure a systematic approach to the pricing of banking services of commercial banks, payment services of the payment system operators, payment organizations and the services of non-banking financial and credit institutions licensed and regulated by the National Bank of the Kyrgyz Republic (hereinafter referred to as the National Bank), including those operating under the Principles of Islamic Banking and Finance with account of a special terminology applied by them while conducting banking transactions (hereinafter referred to as parties delivering banking services) for compliance with the antitrust legislation of the Kyrgyz Republic.

(As revised by Resolution No.2017-P-14/23-16 of the National Bank KR Board as of June 8, 2017)

3. For the purpose of this Regulation, pricing policy is the activities of a party delivering banking services aimed at determination of the pricing strategy, which shall be formalized in the internal regulatory document of the party delivering banking services regulating a pricing process (fixing of prices) for different banking payment services (products) and the services delivered by microfinance organizations, and their change in accordance with the changes in a market situation.

4. Rates of interest and commission fees, and the rates for delivering banking payment services and the services delivered by microfinance organizations, shall be established by the parties delivering banking services individually in accordance with the legislation of the Kyrgyz Republic.

Information on the financial products, services provided by the parties delivering banking services, interest rates and tariffs posted in the Mass Media, official web-sites and other carriers (advertising brochures, roadside billboards, stands and others), as well as the information provided during consultations of the customers shall be true and complete.

(As revised by Resolution No.45/15 of the National Bank KR Board as of November 27, 2013)

4-1. The parties delivering banking services, except for the payment system operators and payment organizations (that are not the bank) shall be prohibited to conclude the adopter agreement on a fee basis with an affiliate and a bank-related party, as well as with any other person being the owner of a trademark, if a specified person is a beneficiary in full or in part under such agreement.

(As revised by Resolution No. 2017-P-14/23-16 of the National Bank KR Board as of June 8, 2017)

II. Requirements to Pricing Policy for the Parties Delivering Banking Services

5. Each party delivering banking services shall have a pricing policy approved by an authorized body of the management (Board of Directors – for banks and by an authorized body of the management/person – for other parties delivering banking services).

6. Executive body (the Management – for banks and authorized executive body/person – for other parties delivering banking services) shall be responsible for development and realization of a pricing policy.

7. The pricing policy shall provide at least the following:

1) objectives and tasks of the pricing policy of the party delivering banking services while performing asset-related and liabilities-related transactions with account of reasonableness of a risk and justification of remuneration;

2) requirement to conduct a market analysis of demand and prices to the banking payment services and the services delivered by microfinance organizations;

3) requirement to the analysis of structuring the rate interests, including interest and non-interest expenses for achievement of the level of profitability by the party delivering banking services;

4) the requirement to disclose the components, which go to make up the interest rates by all types of credits (including the cost of borrowed funds, the cost of credit servicing, operating expenses, the costs of forming a reserve for covering potential damages and losses, taxes, the planned rate of profitability (margin) and other costs due to objective factors, regional and other features of the functioning of the parties delivering banking services), and the lower and the upper interest rate limits acceptable for the party delivering banking services, as well as the requirements for the order of their application and periodic review;

5) requirements to disclosure of components on interest rates of all types of deposits, the lower and the upper limits of interest rates acceptable to the parties delivering banking services, and the requirements to their application and periodic review;

6) requirements to justifying the value of other banking payment services and the services delivered by microfinance organizations in the form of tariffs, commission fees, fixed payments and requirements to their application and periodic review;

7) the rationale for choosing the method for fixing prices for banking payment services and the services delivered by microfinance organizations to the parties delivering banking services, as well as requirements to the methods based on realistic prerequisites and peculiarities of conducting business activities of the parties delivering banking services;

8) the authorities of the management bodies and relevant structural units of the parties delivering banking services, their responsibility for achieving the objectives of the pricing policy and the implementation of the pricing strategy of the parties delivering banking services;

9) requirements for monitoring, control and analysis of the effectiveness of the pricing policy of the party delivering banking services;

10) requirements on the timely provision of information to customers on the conditions for delivery of banking payment services and the services delivered by microfinance organizations and their subsequent amendments and additions to the current interest rates and tariffs of the parties delivering banking services;

11) the frequency of the analysis of the current tariffs and the requirements for their revision and submission to the authorized management body for consideration.

III. Final Provisions

8. The pricing policy implemented by the party delivering banking services shall be transparent, shall comply with the requirements of the legislation of the Kyrgyz Republic for antimonopoly regulation, development of fair competition and protection of the rights of consumers of banking payment services and the services delivered by microfinance organizations.

9. The pricing policy shall be reviewed and approved by the authorized management body at least once a year, taking into account the results and new directions of the activity of the party delivering banking services.

10. A party delivering banking services shall be obliged to provide pricing policy and internal documents at the request of the National Bank of the Kyrgyz Republic.

In case of the introduction of amendments in the declared interest rates on deposits and credits, a party delivering banking services shall notify the Office of External Supervision of the National Bank of the Kyrgyz Republic of the relevant amendments with a detailed explanation of the reasons for these amendments, as well as submit internal documents and a copy of the decision (statement) of the authorized body of the party delivering banking services who approved them) within seven working days.

In case of the introduction of amendments in the declared tariffs for payment services, the payment system operators and payment organizations shall notify the Office of Payment Systems of the National Bank of the Kyrgyz Republic of the relevant amendments with a detailed justification of these amendments, as well as submit internal documents (a copy of a protocol and a copy of the decision (statement) of the authorized body of the payment system operator, payment organization who approved them) within seven working days.

(As revised by Resolutions No. 45/15 of the National Bank KR Board as of November 27, 2013, No. 2017-P-14/23-16 as of June 8, 2017)

11. The National Bank of the Kyrgyz Republic shall carry out the analysis of the pricing policy of the parties delivering banking services with respect of its compliance with the legislation of the Kyrgyz Republic.