|
|
|
Approved by the Resolution of the Board of the National Bank of the Kyrgyz Republic dated December 23, 2013 N 52/7 |
REGULATION
on minimum requirements for credit risk management in credit unions operating in accordance with Islamic principles of banking and financing
(As amended by the Resolutions of the Board of the National Bank of the Kyrgyz Republic dated February 10, 2016 No. 7/3, November 30, 2016 No. 47/6, May 31, 2017 No. 21/11)
Chapter 1. General Provisions
1. This Regulation applies to credit unions licensed by the National Bank of the Kyrgyz Republic (hereinafter referred to as the National Bank) to conduct operations in accordance with the Islamic principles of banking and financing (hereinafter referred to as credit unions).
(As amended by the Resolution of the Board of the National Bank of the Kyrgyz Republic dated May 31, 2017 No. 21/11)
2. The purpose of this Regulation is to form an adequate credit risk management system in credit unions when carrying out operations in accordance with the Islamic principles of banking and financing.
3. This Regulation uses the definitions set forth in the laws of the Kyrgyz Republic "On the National Bank of the Kyrgyz Republic, banks and banking activities", "On credit unions" and regulatory legal acts of the National Bank.
(As amended by the Resolution of the Board of the National Bank of the Kyrgyz Republic dated May 31, 2017 No. 21/11)
4. Credit risk is the risk that customers/suppliers/partners will not fulfill their obligations in accordance with the terms and conditions of the contract, which may have a negative impact on the capital of a credit union or its profit.
Credit risk is associated both with a delay in payment due to the fault of a member-client/supplier/partner of a credit union (hereinafter referred to as the client) due to its insolvency, and with the quality of collateral, type of client by form of ownership, industry affiliation, availability and types of guarantees and the reliability of the guarantors themselves , assessment of the fulfillment of previously given financing obligations, prospects for the further development of the borrower, etc.
Credit risk is present in all activities of a credit union, where a positive result depends on the fulfillment by customers or counterparties of obligations to the credit union, stipulated by agreements and / or contracts.
The purpose of credit risk management is to determine the degree of exposure of a credit union to credit risk, identify the causes of its occurrence and determine internal and external risk trends, on the basis of which credit risk can be predicted, and take the necessary measures to minimize it to an acceptable level.
5. Operations and transactions carried out by a credit union must comply with Shariah standards and regulatory legal acts of the Kyrgyz Republic.
6. Compliance of operations and transactions carried out by a credit union with Sharia standards (principles) is ensured by the Sharia Council established in a credit union or associations of credit unions.
7. When performing its functions, the Sharia Council must be independent from the Board of the credit union.
8. The regulation on the Sharia Council should determine:
- organization of work of the Sharia Council (regulations) - the composition of the council, the procedure for holding meetings;
- powers and responsibilities of the Sharia Council;
- procedure for interaction with the Management Board and the Funding Committee.
9. When carrying out activities in accordance with Islamic principles of financing, the general conditions for the provision of all products and model contracts must be approved by the Shariah Council for their compliance with Shariah standards. If changes and additions are made to the terms of a particular agreement that change the terms of the agreement, they must also be approved by the Shariah Council.
The agreement can be amended and supplemented by the credit union (in terms of clarifying its terms, taking into account the specifics and details of the transaction for the placement of funds) without additional approval from the Shariah Council, provided that all essential (basic) conditions of the standard agreement approved by the Shariah Council remain unchanged in it .
10. Decisions made by the Shariah Board must be available to both the client of the credit union and third parties. The credit union is obliged to provide an explanation of the decision of the Sharia Council. At the same time, the explanation provided to the clients must be previously agreed with the Shariah Council.
Chapter 2. Credit risk management
11. The board of the credit union must ensure that there is an effective credit risk management system with the establishment of rights and obligations for all aspects of credit risk management and monitoring, as well as appropriate tools to identify, assess and control credit risk.
12. Credit risk identification is an ongoing process that should be focused on identifying risks.
(As amended by the Resolution of the Board of the National Bank of the Kyrgyz Republic dated November 30, 2016 No. 47/6)
13. Measurement of credit risk should be carried out taking into account the external and internal conditions of a given credit union. The risk measurement tools used by a credit union should reflect the complexity and levels of risk the credit union accepts. A credit union needs to periodically evaluate the risk measurement tools it uses.
14. A credit union must establish and set out in policies, rules and procedures limits that define the rights and responsibilities of employees of a credit union. The control limits must be adjustable, i.e. the credit union should be able to make changes to the specified limits in the manner set out in the policies. Controls must comply with Sharia rules and standards, legal requirements, and internal policies and procedures of the credit union and ensure the integrity of the risk management process.
15. Credit risk monitoring reports should be periodic, accurate, timely and should be submitted to the responsible persons of the credit union for taking the necessary corrective actions.
16. Financing operations of a credit union are carried out in accordance with its internal financing policy approved by the General Meeting of Participants of a Credit Union. The general meeting of credit union members should periodically review the adequacy of the funding policy.
The board of the credit union is responsible for the implementation of the policy of the credit union on the implementation of operations on Islamic principles of financing, for which it must develop and implement in the activities of the credit union policies and procedures for identifying, measuring, monitoring and controlling credit risk.
Chapter 3
17. The policy of the credit union on the implementation of operations on Islamic principles of financing (hereinafter referred to as the Policy) should determine the strategy, criteria, parameters and procedures that the employees of the credit union are required to follow in providing, arranging financing, monitoring and managing risks.
The policy of the credit union should reflect the issues of possible provision of periodic training of employees on financing and monitoring, issues of analysis and assessment of the solvency of the client/partner, taking into account the policy implemented in the credit union for assessing the solvency of clients/partners, work with distressed assets that carry credit risk, as well as other financing issues, including communication with clients/partners, and other requirements of the legislation of the Kyrgyz Republic and the principles of responsible financing.
(As amended by the Resolution of the Board of the National Bank of the Kyrgyz Republic dated May 31, 2017 No. 21/11)
18. The Policy should reflect the main provisions regarding the issuance of assets that carry credit risk:
1) general provisions, including:
- types of assets bearing credit risk, depending on the purpose of financing and other conditions;
- financing currency;
- quantitative limits of financing;
- terms of financing;
- Criteria for assessing the solvency of customers;
- mark-up/income on assets bearing credit risk and methods of their calculation;
- requirements for financial information of clients;
- geographical restrictions;
- concentration of funding (by customer groups, geographic area, industry and other factors);
- restrictions on assets bearing credit risk, issued to members of the management bodies of a credit union;
- Criteria for assessing the value and acceptability of collateral;
- and other;
2) the procedure for registration of assets bearing credit risk, including:
- forms of documents;
- the procedure for providing assets bearing credit risk;
- the procedure for approving assets bearing credit risk;
- requirements for collateral and documentation (types of collateral, asset coverage ratio, assessment of market value and its location, right to dispose of collateral, collateral valuation methods);
- control over the correct registration of assets bearing credit risk;
3) requirements for managing assets that carry credit risk:
- the procedure for managing assets bearing credit risk, including;
- the requirement to maintain an adequate customer file;
- control over the execution of contracts;
- frequency of collateral monitoring;
- conditions for extension or renewal of overdue assets bearing credit risk;
- classification and formation of a reserve to cover potential losses and damages (PLL);
- the procedure for reclassifying restructured assets bearing credit risk;
- analysis and monitoring of targeted use of funding;
4) the procedure for identifying, analyzing and returning overdue and outstanding financing debts that carry credit risk.
(As amended by the Resolution of the Board of the National Bank of the Kyrgyz Republic dated November 30, 2016 No. 47/6)
18.1. In order to organize work on assessing the risk of executing financing transactions, a credit union is obliged to conclude an agreement on the exchange of credit information with one or more credit bureaus, and also provide at least one credit bureau with credit information available in the credit union.
Credit information must be accurate and up-to-date based on evidence.
The internal documents of a credit union for the management of financing activities should contain the procedure and requirements regarding the organization of work on the exchange of credit information:
- to ensure the storage and protection of credit information from unauthorized access, destruction, modification, use or disclosure;
- on the prohibition of disclosure of information by a credit union and its employees who have gained access to information in the process of exchanging credit information, as well as after the termination of their employment agreement (contract).
In addition, the internal documents for managing financing activities reflect the main conditions and obligations when concluding an agreement on the exchange of credit information with a credit bureau, including:
- timely reporting to the credit bureau of changes and updates to credit information;
- making changes at the request of the subject of credit information in the credit information submitted to the credit bureau;
- ensuring the uninterrupted functioning of the data transmission system to the credit bureau in accordance with the agreement on the exchange of credit information.
The credit union is responsible for the distortion of credit information transmitted to the credit bureau, as well as for the completeness of the transmitted information, including with respect to all clients in accordance with the legislation of the Kyrgyz Republic and the regulatory legal acts of the National Bank.
(As amended by the Resolution of the Board of the National Bank of the Kyrgyz Republic dated November 30, 2016 No. 47/6)
19. Within the limits of the requirements established by the legislation of the Kyrgyz Republic and the regulatory legal acts of the National Bank, the credit union independently determines the types of assets that carry credit risk, forms a financing portfolio and sets the markup / income on assets that carry credit risk.
Chapter 4. Credit Union Financing Committee
20. The body directly implementing the Policy is the Credit Union Financing Committee, elected by the General Meeting of Founders of the credit union. All issues relating to the issuance of assets that carry credit risk must be decided by the Funding Committee.
(As amended by the Resolution of the Board of the National Bank of the Kyrgyz Republic dated November 30, 2016 No. 47/6)
20-1. The credit union is obliged to regularly improve the level of knowledge of its employees in terms of responsible financing.
(As amended by the Resolutions of the Board of the National Bank of the Kyrgyz Republic dated November 30, 2016 No. 47/6, May 31, 2017 No. 21/11)
21. The activity of the Committee for Financing is regulated by the Regulations on the Committee for Financing, which is approved by the Board of the credit union, within the powers established by the legislation of the Kyrgyz Republic and the Charter of the credit union.
22. The Regulations on the Financing Committee should determine:
- organization of the work of the Financing Committee - composition, procedure for holding meetings, a list of documents required for decision-making;
- powers and responsibilities of the Funding Committee;
- other issues related to the work of the Funding Committee.
Chapter 5. Organization of the work of a credit union to provide assets bearing credit risk
§ 1. Analysis of applications for assets bearing credit risk
23. Work on provision of an asset bearing credit risk begins from the moment of acceptance from the client of an application for receiving an asset bearing credit risk, which must specify the purpose of obtaining an asset bearing credit risk, the required amount, term and the conditions under which it will be received, information on the sources of repayment of financing and collateral.
24. All applications for receipt of assets bearing credit risk submitted for consideration must be recorded in the register, regardless of the decision taken on the application.
The internal policies of the credit union should determine the time period for consideration of the application.
(As amended by the Resolution of the Board of the National Bank of the Kyrgyz Republic dated November 30, 2016 No. 47/6)
25. In general, each review of an application for an asset that carries credit risk should be based on the policy of the credit union and focus on the following key factors in conducting a client/partner creditworthiness analysis:
1) the right to receive funding. The finance officer must ensure that the client is eligible to receive the asset that carries the credit risk and sign the finance agreement;
2) the nature of the client. The Funding Officer must determine that the client is responsible for obtaining funding, fully answers questions from the credit union, and will make every effort to pay debts. When analyzing, one should also take into account whether the client used assets that carry credit risk in other financial and credit organizations in the past, how the return was made, his discipline, readiness to fulfill his obligations. You should also take into account his reputation both professionally and in general human terms and consider the length and experience of the client in this industry, his successes and achievements. In addition, with the consent of the client, the credit union must request information (credit report) about him and, at the discretion of the credit union, about persons related to the client / partner, if they have their consent in accordance with the law, in one or more credit bureaus.
A credit union must maintain the confidentiality and security of a credit report received from a credit bureau, not disclose the credit information contained therein to third parties, and use the credit report only for the purposes established by law.
The credit union is responsible for the misrepresentation of the information contained in the credit report;
3) cash. The main question that a finance officer must answer when reviewing an application for an asset bearing credit risk is whether the client will be able to obtain sufficient funds in the form of income and cash flow to repay the asset bearing credit risk. credit risk;
4) provision. When evaluating collateral, the finance officer should consider whether the client has sufficient quality assets to provide the necessary collateral for the credit risk asset;
5) guarantee (guarantee). If a guarantee (guarantee) is used as collateral for an asset that carries credit risk, then work should be carried out to study the guarantor (guarantor), his professional reputation, solvency, responsibility and readiness to fulfill his obligations.
(As amended by the Resolutions of the Board of the National Bank of the Kyrgyz Republic dated November 30, 2016 No. 47/6, May 31, 2017 No. 21/11)
26. After a full study of all documents, a decision is made to issue or refuse to issue an asset that carries a credit risk.
27. If the issue of issuing an asset that carries a credit risk is resolved positively for the client/partner, then a dossier on the financing of the client/partner is formed from the documents received.
The credit union must develop internal documents for working with data containing requirements for ensuring the safety and security of data. Employees of a credit union, when collecting information and conducting interviews with a client / partner, must give a clear explanation of the cases in which, in accordance with the law, data of a client / partner can be used.
The use of photographs or video recordings with the image of the client/partner, audio recordings and other information about the client/partner in advertising, marketing materials and other public purposes requires the written consent of the client/partner.
In case of refusal to issue financing, the credit union must notify the client/partner in writing of the decision taken, with justification of the reason for the refusal.
(As amended by the Resolution of the Board of the National Bank of the Kyrgyz Republic dated May 31, 2017 No. 21/11)
27-1. A credit union cannot issue financing for mortgages (acquisition / construction of housing under Murabaha agreements, etc.) and for consumer purposes in foreign currency to an individual client, with the exception of persons carrying out entrepreneurial activities on the basis of a certificate or patent. It is not allowed to index payments for such financing in terms of a currency other than the currency of the financing agreement.
(As amended by the Resolutions of the Board of the National Bank of the Kyrgyz Republic dated February 10, 2016 No. 7/3, November 30, 2016 No. 47/6)
28. (No longer valid in accordance with the Resolution of the Board of the National Bank of the Kyrgyz Republic dated November 30, 2016 No. 47/6)
§ 2. Requirements for a financing agreement and the procedure for its conclusion
(Paragraph as amended by the Resolution of the Board of the National Bank of the Kyrgyz Republic dated November 30, 2016 No. 47/6)
29. The financing agreement concluded between the credit union and the client, with all annexes to it and other agreements / agreements, are drawn up in the state or official language (with the right to choose the language for the client). The number of original copies of the financing agreement must be no less than the number of parties to the agreement. The credit union must ensure the safety of original copies of the financing agreement in accordance with the legislation of the Kyrgyz Republic.
The text of the financing agreement must be accessible for perception and understanding by the client. The rights and obligations of the client arising from the terms of the financing agreement must be reflected in a separate section of the financing agreement. Throughout the text of the financing agreement and in all annexes to it, the font must be the same and its size must be at least 12.
(As amended by the Resolution of the Board of the National Bank of the Kyrgyz Republic dated November 30, 2016 No. 47/6)
30. When signing the financing agreement, all the conditions under which the asset is issued and will be repaid should be clarified in order to avoid possible problems with repayment in the future.
(As amended by the Resolution of the Board of the National Bank of the Kyrgyz Republic dated November 30, 2016 No. 47/6)
31. The credit union is not entitled to unilaterally change the initial terms of the financing agreement without the written consent of the client, if this worsens the rights and increases the obligations of the client.
(As amended by the Resolution of the Board of the National Bank of the Kyrgyz Republic dated November 30, 2016 No. 47/6)
32. The financing repayment schedule is an integral part of the financing agreement, the repayment period is drawn up taking into account the financial capabilities of the client and signed by both parties.
(As amended by the Resolution of the Board of the National Bank of the Kyrgyz Republic dated November 30, 2016 No. 47/6)
33. The financing agreement shall, at a minimum, specify:
- names of the parties;
- the subject of the contract;
- duration of the financing agreement;
- the main conditions for the provision of financing, including an indication of the amount, procedure and repayment period, type of collateral, margin/income on financing;
- the rights and obligations of the client, including in case of non-fulfillment or improper fulfillment of the obligations assumed by him under the financing agreement;
- rights and obligations of the credit union;
- conditions for providing information about the client to the credit bureau (if the given credit union is its member);
- the right of the client to early repayment of the asset at any time, without any penalties, subject to notification of the credit union at least thirty days before the date of such return;
- the terms of the relationship between the credit union and the client in the event of force majeure. Force majeure circumstances may include, but are not limited to, such events as: natural disasters (floods, earthquakes, fires and other natural or man-made disasters), epidemics, the introduction of a state of emergency, riots, looting, hostilities, etc.
(As amended by the Resolution of the Board of the National Bank of the Kyrgyz Republic dated November 30, 2016 No. 47/6)
34. The credit union must familiarize the client with the list of expenses (payments) of the client, which is compiled in tabular form in accordance with Appendix 2 to this Regulation and is an integral part of the financing agreement and signed by both parties.
If necessary, the credit union must provide the client with clarifications on the procedure for calculating financing payments, penalties, fines, etc.
The credit union is not entitled to include in the terms of the financing agreement additional fees, commissions and other payments collected / paid in the credit union and related to the conclusion and execution of the financing agreement, in addition to the approved tariffs of the credit union, as well as other related services on a paid basis, regardless of agreements with the client.
(As amended by the Resolution of the Board of the National Bank of the Kyrgyz Republic dated November 30, 2016 No. 47/6)
34-1. After the conclusion of the financing agreement with the client and the receipt of funds by the client, at least the following documents must be submitted to the client:
- a financing agreement with a payment schedule signed by the parties;
- a list of expenses (payments) of the clients of the credit union and penalties.
(As amended by the Resolution of the Board of the National Bank of the Kyrgyz Republic dated November 30, 2016 No. 47/6)
34-2. The credit file of the client (the minimum requirements for the file are presented in Appendix 1 to this Regulation) is formed from the moment the application is received from the client, and all relevant financing documents are filed into it.
(As amended by the Resolution of the Board of the National Bank of the Kyrgyz Republic dated November 30, 2016 No. 47/6)
34-3. When monitoring assets, the credit union should document and keep records of all activities carried out on them, including the implementation of a record in the log of a summary of telephone conversations and meetings with the client. It is especially important to make such accounting in work with distressed assets.
(As amended by the Resolution of the Board of the National Bank of the Kyrgyz Republic dated November 30, 2016 No. 47/6)
§ 3. Ensuring the return of an asset that carries a credit risk
35. Assets that carry credit risk may be secured or unsecured (blank).
36. For the purposes of this Regulation, the sources of repayment of assets bearing credit risk are divided into primary and secondary:
1) the primary source is the funds necessary to repay an asset that carries a credit risk, which, in the normal course of events, are generated in the process of production, provision of services, work, etc.: for legal entities, this is income in cash and non-cash form, and for individuals it is wages or other receipts;
2) the secondary source is the funds received from the sale of the pledged property, the transfer of funds by the guarantor or guarantor.
37. When considering an application for funding and approving the conditions for granting funding, it is necessary to focus primarily on the primary source and never rely only on the secondary source of repayment. Therefore, in the process of considering an application for receiving an asset that carries a credit risk, the main attention should be paid to the analysis of the client's cash flows, the prospects for the development of the industry and business of this client.
38. Secondary sources are needed to provide additional guarantees for the return of an asset that carries a credit risk in the event that there are problems with the return. Such collateral includes: the credit union's ownership of an asset acquired as part of the client's financing, pledge of property and rights, assignment of claims and rights, guarantees and guarantees and other methods provided for by the legislation of the Kyrgyz Republic or the agreement.
In order to mitigate credit risk, the Credit Union Funding Committee may apply to the Sharia Board, which in each individual case can make recommendations on securing the return of an asset that carries a credit risk.
39. A pledge of property as a secondary source of repayment of an asset that carries a credit risk is formalized by a pledge agreement confirming the right of a credit union, in case the client fails to fulfill its obligations, to receive a pre-emptive right to satisfy claims from the value of the pledged property.
40. The pledge agreement shall, as a minimum, specify:
- subject of pledge and its value;
- parties to the contract;
- in the case of a pledge of immovable property or property subject to registration, - the right by virtue of which such property belongs to the pledger, indicating the details of the title document;
- a description of the secured obligation, which can be expressed as the maximum amount of the obligation;
- the amount and term of fulfillment of the obligation secured by the pledge;
- an indication of which party has the pledged property;
- conditions and procedure for the transfer of collateral to the ownership of a credit union in the event that the client fails to return an asset that carries a credit risk;
- other requirements and obligations of the parties in relation to the pledge in accordance with the legislation of the Kyrgyz Republic.
(As amended by the Resolution of the Board of the National Bank of the Kyrgyz Republic dated November 30, 2016 No. 47/6)
41. A full inventory of the pledged property with an indication of the value is attached to the pledge agreement. Certificates, certificates and other technical documentation may be attached to the pledge agreement. The pledge agreement must be drawn up in accordance with the legislation of the Kyrgyz Republic. The number of original copies must be no less than the number of parties to the contract.
42. The use of collateral requires a certain system of its administration: a survey of the condition of the collateral should be carried out, its assessment should be carried out, a plan for monitoring the conditions of the maintenance of the collateral and its monitoring should be drawn up, and appropriate documentation should also be available (Minimum requirements for collateral documentation are given in the Appendix to this position).
43. If guarantees and warranties act as collateral for an asset bearing credit risk, then a third party shall, as a rule, bear property liability for the client in the event that he cannot pay. When issuing an asset that carries credit risk, secured by a guarantee, the credit union must have full information about the financial position of the guarantor or guarantor in order to assess its ability to repay the debt if necessary.
44. Loans without collateral (blank) do not imply a pledge of the client's assets and are issued exclusively to a creditworthy client based on his reputation and assessment of his income level. The maximum exposure to credit risk assets that are not secured by collateral is set in the funding policy.
Chapter 6. Monitoring of an asset bearing credit risk
45. After the conclusion of the contract and the receipt by the client of the asset bearing credit risk, the credit union needs to carry out continuous monitoring of the asset bearing credit risk and the client. The main purpose of monitoring is to ensure timely repayment of the credit risk asset, regular markup/revenue on the credit risk asset, and to detect problems at an early stage.
46. In order to constantly monitor the safety of the pledged property and identify possible changes in its current value, the credit union must periodically monitor the pledge in the places of its storage and location. The frequency of collateral monitoring is determined by the credit union in accordance with the financing policy and depends on the type of collateral, the quality of the asset bearing credit risk and the term for which the asset bearing credit risk is issued. In this case, special attention should be paid to the following points:
- change in the market value of the collateral;
- the presence of any factors affecting the liquidity of the collateral since the last check;
- Ensuring the security of collateral.
47. The classification of assets bearing credit risk is carried out on the basis of an independent assessment carried out by persons not involved in the financing process.
48. Signs that may indicate a deterioration in the condition of an asset that carries credit risk include, but are not limited to:
- avoidance of the client from contacts with the credit union;
- deterioration of the financial condition of the client;
- late payment of principal or markup/income on an asset bearing credit risk;
- request for an extension;
- misuse of an asset that carries a credit risk;
- transfer and sale of property;
- negative information received about the client from any sources;
- signs of growing conflict within the client enterprise;
- change of management of the enterprise-client;
- other indications of potential problems.
49. If any signs specified in paragraph 48 of these Regulations are identified, the credit union must clarify the reason for their appearance. If, in the opinion of the credit union, these indications could lead to a deterioration in the condition of an asset bearing credit risk, the credit union should take the asset under special control and take all appropriate measures, including:
- additional verification of the availability and conditions of the collateral;
- attracting additional collateral;
- warning conversations;
- suspension of regular payments under the line of financing until the final clarification of the situation;
- a more detailed systematic study of the client and the state of the industry in which he placed the funds;
- other protective measures.
50. (No longer valid in accordance with the Resolution of the Board of the National Bank of the Kyrgyz Republic dated November 30, 2016 No. 47/6)
Chapter 7
51. The purpose of continuous monitoring of an asset bearing credit risk and independent assessment of the funding portfolio is to identify "problem" assets.
52. "Problem" refers to assets that carry credit risk, for which the client does not comply with the terms of the agreement with the credit union, or due to any circumstances (for example, external or financial) jeopardize the fulfillment of obligations to the credit union and repayment asset.
53. If an asset that carries credit risk is recognized as "problematic", it is necessary to develop an action plan for the credit union aimed at recovering the asset, which includes a number of activities:
1) Measures for organizational, financial and other assistance of a credit union to a problem client, contributing to overcoming the crisis and fulfilling the client's obligations to the credit union:
- work with clients (its management) to identify problems and find their solutions;
- obtaining additional collateral and guarantees;
- if necessary, development of a program to change the debt structure (for example, revising the payment schedule for the return of an asset that carries a credit risk, and the payment of a markup/income on an asset that carries a credit risk, changing the forms of financing, etc.).
2) Along with these activities, it is necessary to conduct ongoing work with the client himself, which may include the following:
- notification of the client that he has violated the terms of the financing agreement, the term of the asset that carries the credit risk is overdue, and about possible problems associated with this;
- Negotiation.
When working with "problem" assets that carry a credit risk, holding meetings and conversations, employees of a credit union must strictly adhere to the accepted business and professional etiquette of conduct.
3) In order to ensure the return of an asset that carries a credit risk, the following activities are carried out as soon as possible:
- Foreclosure on the subject of pledge;
- Appeal to guarantors and guarantors;
- other measures not prohibited by the legislation of the Kyrgyz Republic.
When providing financing services, the credit union, in accordance with the pledge agreement, which is an integral part of the financing agreement, must provide the client and the pledger (if any) with a pre-emptive right to buy out the collateral property, according to which the client and / or the pledger may / may redeem the collateral at any time prior to the public auction.
(As amended by the Resolutions of the Board of the National Bank of the Kyrgyz Republic dated November 30, 2016 No. 47/6, May 31, 2017 No. 21/11)
54. The finance officer responsible for dealing with distressed credit risk assets should report to the Finance Committee on a monthly basis on the progress made with proposals for further action in respect of distressed assets. Copies of the report are sent to the Board of the credit union.
55. If the actions of the credit union, provided for in this chapter, did not lead to a positive result, the credit union may apply to the court for the purpose of forced collection of the debt.
56. If it is objectively impossible to return an asset that carries a credit risk (including possibly in the event of the death of a client), the decision to write off the assets that carry a large risk is taken by the General Meeting of Founders, and the remaining assets that carry a credit risk - The Board of the credit union with the obligatory informing of the General Meeting of Founders.
|
|
|
Appendix 1 to the Regulation "On the minimum requirements for credit risk management in credit unions carrying out operations in accordance with the Islamic principles of banking and financing |
MINIMUM REQUIREMENTS
for client financing dossier
(As amended by the Resolutions of the Board of the National Bank of the Kyrgyz Republic dated November 30, 2016 No. 47/6, May 31, 2017 No. 21/11)
I. General information about the client
1. An application for financing in the form established by the CU with the client's information about the obligations received/repaid/not repaid earlier in this CU and other financial and credit organizations for the last six months preceding the submission of the application to the CU.
2. Credit report on the client from the credit bureau.
2-1. Consent of the client to provide a credit report about himself (may be specified in the application for financing).
3. A copy of the identity document, by which it is possible to identify the client of the CU.
4. Information about the income of the client.
5. Inventory of the pledged property (if any).
6. Consent of the spouse(-s) of the client to receive financing (for financing over 50,000 soms per client and upon receipt of financing, if there are existing obligations).
7. For a client (individual) engaged in individual entrepreneurial activity without forming a legal entity, in addition to the above documents:
- a copy of the certificate of state registration (re-registration) as an individual engaged in individual entrepreneurial activity without forming a legal entity (if any);
- a copy of the patent (if available).
7-1. Notarized cards with sample signatures of persons entitled to sign (if the client is a legal entity).
8. Evaluation of sources of funds confirming the solvency of the client.
9. Financing agreement in the state or official language, annexes to it, as well as additional agreements concluded with the client in the course of restructuring or prolongation, assignment of claims.
10. Decision of the relevant body of the CU on the issuance of an asset that carries a credit risk, as well as its prolongation or restructuring (if any).
11. Correspondence with the client (with all correspondence attached).
12. Legal documentation (copies of documents of the client on his activities, for example, waybills, invoices, agreements with partners, etc.).
13. Report on the verification of the intended use of the asset.
14. Questionnaire of the client, compiled according to a standard form in accordance with the requirements of the authorized state body in the field of combating the legalization (laundering) of criminal proceeds and the financing of terrorist or extremist activities.
II. Pledge documentation
15. Pledge agreement in the state or official language.
16. Certificates, certificates and other qualification documents for collateral (if any).
17. Documents confirming the ownership of the pledged property.
18. (declare invalid)
19. An act of inspection of the pledge, which should reflect:
- date of collateral examination;
- type of collateral;
- date of valuation of collateral;
- evaluation method;
- location of collateral;
- the state of the pledge and the conditions of its maintenance;
- estimated value of collateral;
- schedule for periodic inspection of collateral.
20. Documents confirming the registration of the pledge agreement (if the pledge must be registered or the credit union requires registration).
21. Decision of the relevant body of the borrower to provide collateral (if the borrower is a legal entity).
III. Guarantees
22. Written guarantee indicating the relevant financing agreement, the amount for which the guarantee is issued, the expiration date of the guarantee.
23. Decision of the relevant body of the guarantor to issue a guarantee (if the guarantor is a legal entity).
24. Copies of constituent documents of the guarantor (if the guarantor is a legal entity).
25. Information about the income of the guarantor.
|
|
|
Appendix 2 to the Regulation "On the minimum requirements for credit risk management in credit unions carrying out operations in accordance with the Islamic principles of banking and financing |
LIST
of expenses (payments) of credit union clients and penalties
|
Expenses (payments) of a credit union client for an asset |
|
|
Amount of asset bearing credit risk |
Specified in the financing agreement |
|
Mark-up/revenue on an asset bearing credit risk |
|
|
Fee for consideration of an application (registration of an asset bearing credit risk) |
If there are commissions, their sizes are indicated in accordance with the approved tariffs in percentage or value terms. |
|
Fee for the issuance and administration of an asset |
|
|
Fee for opening (if opening an account is conditioned by the conclusion of a financing agreement) and servicing (if operations on an asset bearing credit risk are carried out in a non-cash form) a loan and/or current account |
|
|
Commission for settlement and cash services (including depositing and receiving cash by a client through an ATM) |
|
|
Payments in favor of third parties (payment for insurance, notary services, etc.) |
The approximate cost (range) of such costs is indicated, indicating that these costs may change in the future |
|
Fee for the provision of customer account statements |
Indicated in accordance with the approved tariffs of the credit union |
|
Other expenses |
|
|
Penalties and penalties of the credit union |
|
|
For late payments on the principal amount of an asset bearing credit risk and on a credit union's markup/revenue |
Indicated in accordance with the approved amount of penalties levied in a credit union on the basis of a financing agreement, in percentage or value terms |
|
Conditions for terminating the financing agreement after receiving the asset |
Indicated on the basis of the financing agreement |
|
Other expenses |
|
|
______________________________ |
______________ |
___________ |
|
___________________________ |
______________ |
_____________ |
|
(name of authorized specialist) |
(signature) |
(date) |
|
(Name of the client of the credit union) |
(signature) |
(date)". |