LAW OF THE KYRGYZ REPUBLIC On Protection of Bank Deposits


Bishkek

7 May 2008 No 78

LAW OF THE KYRGYZ REPUBLIC

On Protection of Bank Deposits

(The Law of the KR No.139 as in force on April 29, 2009)

This Law is part of the banking legislation of the Kyrgyz Republic and is aimed at creation of a legal framework for the functioning of a system of mandatory protection of individual deposits at the banks in the Kyrgyz Republic. The system of deposit protection is aimed at protecting bank depositors in case of events guaranteed against by provision of compensations in such amounts and such ways as are provided for in this Law, and at enhancing the stability of the financial system as a whole. This Law establishes the legal framework for the formation, administration and financing of the deposit protection system; creation and operation of an independent Deposit Protection Agency in the Kyrgyz Republic.

Chapter I

General Clauses

Article 1. The Relations regulated by this Law

  1. This Law regulates the relations arising in the creation and functioning of the system of mandatory protection of deposits of natural persons in the banks of the Kyrgyz Republic (hereinafter “the deposit protection system”), formation and use of the Deposit Protection Fund, payment of compensations on deposits in the event of circumstances they are guaranteed against, as well as the relations between the Agency for Protection of Deposits, commercial banks, the National Bank, and organs of state power, and other relations arising in this area.
  2. This Law does not extend to other methods of protecting deposits of individuals aimed at ensuring their recoverability.
  3. This Law is applicable to banks. The clauses of this Law do not apply to other financial and credit institutions that accept deposits in conformity with the legislation of the Kyrgyz Republic currently in force.
  4. The relations arising in connection with the establishment and functioning of the deposit protection system are regulated by this Law and by regulatory legal acts of the Kyrgyz Republic adopted in accordance with this Law.

Article 2. Notions used in this Law

For the purposes of this Law the following notions are used:

Bank — a resident bank in the Kyrgyz Republic as well as a branch of a foreign bank established in compliance with the legislation of the Kyrgyz Republic and subject to licensing by (holding licenses from) the National Bank to engage in banking operations.

Participating bank — a bank participating in the deposit protection system.

Agent bank — a bank used by the Deposit Protection Agency for paying compensations to depositors in conformity with the requirements of this Law.

Compensation on deposits — an amount of money payable to a depositor in the event of circumstances provided for by this Law.

Deposit — an amount of money received from a depositor by a bank holding an appropriate license granted by the National Bank on conditions of refundability (regardless of whether such conditions require full or partial refundability or refundability in a large amount).

Deposit base — the sum of monies placed in a bank in deposit accounts of legal and natural persons in the form of deposits.

Depositor — a natural person that made a deposit with a bank.

Contributions — sums of money allocated for the formation of the Deposit Protection Fund in the order and form stipulated by this Law, as entrance, initial, calendar and emergency contributions.

Deposit protection (a deposit protection system) — the scope of legal relations regulated by this Law.

Entrance contribution — sums of money allocated by newly established banks for entering the deposit protection system in accordance with this Law.

Initial contribution — sums of money allocated by operating banks, after the coming of this Law into force, for the formation of the Deposit Protection Fund in the amount and form and within periods of time determined by this Law.

Calendar contributions — sums of money allocated on a quarterly basis by participating banks to the Deposit Protection Fund in accordance with this Law.

Emergency contribution — sums of money allocated by participating banks to the Deposit Protection Fund, in addition to calendar contributions, in case of a shortfall in the funds for covering the obligations in conformity with this Law.

Newly established bank — a bank established in compliance with the effective legislation of the Kyrgyz Republic after the coming of this Law into force in accordance with part 1 of Article 43 of this Law.

Operating bank — a bank (hereinafter a “bank”) that holds a license from the National Bank to engage in banking operations as of the date this Law comes into force.

Guaranteed deposit — a sum of money placed in a deposit account of the depositor in a participating bank and subject to compensation in case of events guaranteed against in accordance with the requirements of this Law.

Bank Register — the list of participating banks in the deposit protection system.

Event guaranteed against — circumstances under which a deposit subject to compensation in accordance with the bank deposit agreement has not been refunded by a participating bank due to an effective final decision of a court of law on forced liquidation or bankruptcy of the bank, and also in case the procedure of voluntary liquidation, which was commenced in accordance with the legislation of the Kyrgyz Republic, has passed into the procedure of forced liquidation on the grounds provided for by the Law of the Kyrgyz Republic “On Conservation, Liquidation and Bankruptcy of Banks” in compliance with the effective decision of the court of law.

Insiders, affiliated persons, common interests — according to the definitions established in the Law of the Kyrgyz Republic “On Banks and Banking in the Kyrgyz Republic” and regulatory legal acts of the National Bank.

The National Bank of the Kyrgyz Republic — the National (Central) Bank of the Kyrgyz Republic (hereinafter “the National Bank”).

The Deposit Protection Fund — a fund established by means of contributions specified in this Law and managed by the Deposit Protection Agency on terms and in the order provided for by this Law.

Close relatives — relatives according to the first and the second legal lines of heirs according to the Civil Law.

Overdue loans and guarantees — loans and guarantees, as well as obligations deemed equivalent to them in accordance with regulatory legal acts of the National Bank, the execution on which has been delayed for 5 or more days.

Article 3. Establishment, mission and activities of the Deposit Protection Agency

  1. The Deposit Protection Agency (hereinafter the “Agency”) — a legal person with an independent organizational and legal form — the Deposit Protection Agency established by the Government in accordance with this Law. The Agency is an independent commercial organization not pursuing purposes of profit extraction, vested with rights and obligations provided for in this Law. The independence of the Agency, for the purposes of this Law, means independence in decision making and forming of the Agency’s budget.

See:
the decree of the President of the KR of 3 July 2008 RP No 149 (“On the establishment of the Deposit Protection Agency in the Kyrgyz Republic”);
the decree of the Government of the KR of September 21, 2011 No 567 (“On adopting Regulation On the Deposit Protection Agency”)

  1. The legal status of the Agency is determined by this Law, .
  2. The mission of the Agency is to ensure functioning of the deposit protection system in the Kyrgyz Republic. To perform this task, the Agency manages the assets of the Deposit Protection Fund, pays the principal and interest on deposits in case of events guaranteed against in accordance with this Law.
  3. The Agency is entitled to establish representative offices and to appoint its representatives in the regions of the Kyrgyz Republic.
  4. The Kyrgyz Republic does bear responsibility for the Agency’s obligations, with the exception of cases provided for in this Law.
  5. The National Bank does not bear responsibility for the Agency’s obligations.
  6. The Agency does not bear responsibility for the obligations of the Kyrgyz Republic and of the National Bank.
  7. Government organs and organs of local government do not have the right to interfere in the Agency’s activities.
  8. In case of events guaranteed against in accordance with this Law, every depositor shall be paid a compensation not exceeding 100 thousand soms in total, including the interest on deposits.
  9. The amount payable to a depositor in accordance with part 1 of this Article shall be reduced by the amount of overdue loans made to the depositor and overdue guarantees provided by the bank at the request of the depositor.
  10. The interest accrued but not yet paid out or capitalized shall be calculated as of the date of occurrence of an event guaranteed against. The accrual of such interest shall be effected at the rate specified in the bank deposit contract but shall not exceed the discount rate of the National Bank as of the date of the event guaranteed against.
  11. In determining the amount payable to any depositor as compensation in accordance with this Law, the Agency shall determine the total value of deposits held in the given bank by the depositor.
  12. In case of occurrence of the events guaranteed against in respect of several participating banks in which a depositor has deposits, the depositor shall be entitled to compensation at each bank separately. Should a bank be reorganized in the form of o merger or acquisition, deposits shall be deemed guaranteed separately on each reorganized bank within 6 months of the date of its reorganization.
  13. The value of deposits accepted in a foreign currency shall be paid to the depositor in the national currency at the exchange rate established by the National Bank as of the date of occurrence of an event guaranteed against. In case of absence of quotations (discount rate) of the National Bank on any currency, the average exchange rate on such a currency shall be determined on the basis of cross-rate as of the date of occurrence of the event guaranteed against.
  14. If on a contractual basis a deposit has been placed in the name of several persons (a join deposit) every one of such persons shall be deemed a depositor to the extent of the share specified in the agreement (contract) to open an account, and in case of absence of contractual conditions or relevant rules in the legislation of the Kyrgyz Republic, in equal shares.
  15. If voluntary liquidation (self-liquidation) passes into forced liquidation on any ground, compensation shall not be provided if the sum paid in the process of voluntary liquidation exceeds the sum established in part 1 of this Article.
  16. The obligations of the bank being liquidated to a depositor shall be reduced by the amount of payments made by the Agency in accordance with this Law.

 

Charter II

The Scope of the Deposit Protection System

Article 4. Deposits subject to protection in accordance with this Law

(The Law of the KR No.139 as in force on April 29, 2009)

Article 5. Deposits not subject to protection

The following deposits of natural persons shall not be subject to compensation in accordance with the requirements of this Law:

  1. deposits of insiders and affiliated persons of a bank, as well as deposits of their close relatives, placed at a bank on preferential conditions;
  2. deposits of persons that for the span of the three last years have been foreign consultants or external auditors of the bank;
  3. deposits of persons placed on the instruction (power of attorney) of a legal person;
  4. deposits in respect of which there is a decision of juridical or investigative organs in connection with financing of terrorism or laundering of revenues derived in criminal ways;
  5. sums of money of natural persons engaging in entrepreneurial activities without forming a legal person placed in bank accounts opened in connection with the stated activities;
  6. deposits at the branches of a resident bank beyond the boundaries of the Kyrgyz Republic.

Chapter III

 

 Deposit compensation

Article 6. Interaction of the Agency and a bank in case of events guaranteed against

  1. Within 15 calendar days after the occurrence of an event guaranteed against, a special administrator shall submit to the Agency information on individual deposits to which this Law is applicable, in the form established by the Agency and agreed with the National Bank.

The special administrator bears legal responsibility for untimely submission of the information on deposits to the Agency.

  1. The Agency is obligated not less frequently than 2 times per month to inform in written form the special administrator of the bank being liquidated about the paid amounts of compensation. The form of the notification shall be established by the Agency and agreed upon with the National Bank.
  2. A branch of foreign bank is obligated to inform the Agency and the National Bank within one working day of the occurrence of an event guaranteed against (or similar event, as it is determined by the legislation of the foreign state), initiated by a court of law or an authorized organ of the country of the foreign bank’s registration in respect of this bank or any of its foreign branches, in conformity with the legislation of the country of the foreign bank’s registration.
  3. The Agency shall pay compensation to depositors in accordance with this Law, employing any of the following options:

Article 7. The procedure for making compensatory payments

1)      transfer of the payable amount of compensations to agent bank (s);

2)      other acceptable methods of cash or non-cash forms of settlement for effective compensation of deposits in conformity with the purposes of this Law.

  1. The payment of compensations shall start not later than 60 calendar days after the occurrence of an event guaranteed against.
  2. In case of circumstances preventing timely payment of compensations and at the approval of the Board of Directors of the Agency, the payment of compensations may be extended for up to 60 calendar days.
  3. Compensatory payments on a deposit (s) shall be suspended by the Agency in respect of the owner of which a criminal case has been initiated on the grounds of laundering of illegally earned revenues and/or in connection with terrorism financing, until the criminal case is closed or a final decision of a court of law is made.
  4. Not later than 30 days of the date of occurrence of an event guaranteed against, the Agency is obligated to publish in the press, in the state and official languages, in the locality of the legal address of the agent bank, the date, time, form of and the procedure for making the compensatory payments. This information also shall be published in the state and official languages in a national newspaper and placed at the entrance to the central (head) office of the agent bank and the bankrupt bank, including their branches, savings desks and automatic teller machines.
  5. For the purpose of making compensatory payments to depositors in accordance with part 1 of this Article, the Agency shall choose one or several agent banks which shall meet the following requirements:

1)      the bank must be a participating bank of the deposit protection system;

2)      it must have adequate capital and a level of shareholders’ equity meeting the requirements of the National Bank;

3)      within the last 6 months prior to the occurrence of the event guaranteed against, it has not been subject to precautionary measures and sanctions from the National Bank as are provided for by paragraphs 3-7 of part 2 of Article 32 of the Law of the Kyrgyz Republic “On the National Bank of the Kyrgyz Republic” and paragraphs 3-7 of part 2 of Article 45-1 of the Law of the Kyrgyz Republic “On Banks and Banking in the Kyrgyz Republic”;

4)      it must have a branch network comparable with the geographic structure of deposits, in order to make compensatory payments.

  1. On the amounts transferred by the Agency to an agent bank, no interest shall be accrued and disbursed. A depositor shall be entitled to conclude a bank deposit agreement with an agent bank on terms and conditions provided for by the legislation of the Kyrgyz Republic.
  2. The National Bank is entitled to adopt regulatory legal acts establishing additional requirements for the selection of agent banks.
  3. An agent bank must on a weekly basis submit to the Agency reports on disbursed compensatory amounts, in the form established by the Government and agreed upon with the National Bank.
  4. The procedure for selecting of an agent bank and presenting requirements in accordance with parts 5, 6 and 8 of this Article shall be approved by the Government and executed by the Board of Directors of the Agency. The disbursement of compensations to depositors shall be effected in accordance with the conditions of the agreement between the Agency and the agent bank, preliminarily agreed with the National Bank.
  5. The agent bank must provide the depositor with a statement of the compensation payable to the latter at the moment the compensation is disbursed. The form of the statement is established by the Government.
  6. On expiry of one year after the commencement of compensatory payments, the agent bank must within 3 business days return to the Agency the unclaimed and unpaid funds of depositors. Such funds shall be placed in a separate account of the Agency with the National Bank.
  7. The further disbursement of unclaimed and unpaid compensatory funds and provision of information on them shall be effected by the Agency according to the procedure established in part 1 of this Article.
  8. The Agency shall not accrue interest on deposits in respect of which an event guaranteed against has occurred.
  9. In case of delayed commencement of compensatory payments as determined in accordance with part 2 of this Article, the Agency shall pay to the depositor fines in the amount linked to the annual discount rate established by the National Bank, for each day of the delay, relative to the amount payable.
  10. In case of a dispute about the size (amount) of compensatory payments, the Agency shall consider the appeal of the depositor within a period not exceeding 30 days. In case of a failure to resolve the dispute, the depositor shall be entitled to question the decision of the Agency in a legal way. The agent bank shall inform the depositor about the procedure for making appeals to the Agency, including provision of necessary documents.
  11. The Agency acts as a lender to the bank in respect of which the procedure for forced liquidation or bankruptcy has been initiated in conformity with the Law of the Kyrgyz Republic “On Conservation, Liquidation and Bankruptcy of Banks”.
  12. As of the date of occurrence of an event guaranteed against, the depositor’s claim on the bank shall automatically pass to the Agency within the guaranteed amount in respect of which an event guaranteed against has occurred, regardless of the timing of the payment and the amount actually paid by the Agency to the depositor, with the exception of cases when the depositor expressly disagrees with the transfer of his claim to the Agency. If the depositor has expressed his disagreement with the transfer to the Agency of his claim on the bank within the guaranteed amount, the depositor shall lose the right to the payment of compensation in accordance with this Law.
  13. In the process of distribution of the assets of the bank, the claims relating to compensatory payments, which have passed to the Agency, shall become creditor claims of the third order according to the priority of payments established by the Law of the Kyrgyz Republic “On Conservation, Liquidation and Bankruptcy of Banks”.
  14. The depositor shall not lose the right for satisfaction of his claims to the bank in excess of the amounts subject to compensation according to this Law as are established in the bank deposit agreement. Such claims shall be settled in conformity with the Law of the Kyrgyz Republic “On Conservation, Liquidation and Bankruptcy of Banks”, with reference to part 3 of this Article.

Article 8. Reassignment of a claim

Chapter IV

The functions and powers of the Deposit Protection Agency

Article 9. The functions of the Deposit Protection Agency

The Deposit Protection Agency shall perform the following functions:

  1. maintain the Register of participating banks;
  2. keep record of depositor claims, amounts payable and amounts of paid compensations on deposits;
  3. pay to depositors covered by this Law amounts determined by this Law;
  4. calculate the size of contributions and collect contributions to the Deposit Protection Fund;
  5. carry out necessary actions aimed at ensuring timely and full payment of contributions;
  6. establish and impose fines and penalties for untimely payment of contributions;
  7. manage the assets of the Deposit Protection Fund in the order and within the limits established by this Law;
  8. perform other functions, powers and rights necessary for ensuring effective operation of the mandatory deposit protection system as provided for in its statute approved by the Government of the Kyrgyz Republic.

See:

The Decree of the Government of the KR of 28 August 2008 No 479 “On Approval of the Statute of the Deposit Protection Agency of the Kyrgyz Republic”

Article 10. The powers of the Deposit Protection Agency

  1. The Agency develops normative acts required for the execution of the clauses of this Law that shall be approved by the Government.
  2. The Agency is entitled to conclude agreements and contracts necessary to carry out its activities.
  3. If necessary, the Agency shall attract state organs and independent experts for the fulfillment of the tasks established by this Law.
  4. The Agency has the right:

to  approach the National Bank with a proposal to apply to banks certain measures provided for by the Laws of the Kyrgyz Republic “On the National Bank of the Kyrgyz Republic” and “On Banks and Banking in the Kyrgyz Republic”;

to approach the National Bank for information necessary for the fulfillment of the tasks determined by this Law;

1)      to require banks to place information about the deposit protection system and participation of the bank in the deposit protection system in the territory where the bank provides depositor services in the form and order determined by this Law;

to participate in meetings and committees of creditors in banks in respect of which the procedure for forced liquidation and bankruptcy has been initiated in conformity with the Law of the Kyrgyz Republic “On Conservation, Liquidation and Bankruptcy of Banks”.to

The Agency does not have the right to be engaged in activities extending beyond the limits of its tasks, functions and powers specified in Articles 3, 9 and 10 of this Law; establish or be participant to legal persons, and to acquire movable and immovable property, with the exception of property related to the conduct of the Agency’s business.

Article 11.  Prohibition on lending and rendering of financial and non-financial assistance

The Agency is not entitled to engage in lending, render in any form financial and non-financial assistance to the Government, other state organs, legal and public organizations as well as to individuals.

Chapter V

Management of the Deposit Protection Agency

Article 12. Managerial bodies of the Agency

The managerial bodies of the Agency are the Board of Directors and the Executive Director of the Agency.

 Article 13. Board of Directors of the Agency

  1. The Board of Directors of the Agency (hereinafter “the Board of Directors”) is the highest managerial body of the Agency consisting of 7 members;

1)      three representatives of the Government, including one representative of the Ministry of Economic Development and Trade, and two representatives of the Ministry of Finance (not lower than a  board member) appointed by the Prime Minister.

See:

The Decree of the Prime Minister of the KR of 18 July 2008 No 277 (On the appointment as members of the Board of Directors of the Deposit Protection Agency of representatives of the Government of the KR)

2)      three representatives of the National Bank (not lower than a member of the Executive Board of the National Bank) appointed by the Executive Board of the National Bank;

3)      an independent expert in banking appointed by joint decision of the Government and the National Bank.

 

See:

The Decree of the Prime Minister of the KR of 18 July 2008 No 278 (On A. K. Abdraev)

  1. The members of the Board of Directors shall carry out their activities without recompense.
  2. The conditions of employment, the system of remuneration, the official duties and rights, the system of incentives and disciplinary penalties in respect of employees of the Agency and invited persons shall be determined by the Board of Directors in conformity with the legislation of the Kyrgyz Republic.
  3. The members of the Board of Directors are appointed for a term of 5 years.
  4. The members of the Board of Directors may be appointed to the office not more than for 2 successive terms.
  5. The Chairman of the Board of Directors and the Deputy Chairman of the Board of Directors are elected by the members of the Board of Directors by simple majority of votes for a term of 2 years.
  6. The Deputy Chairman of the Board of Directors shall perform the responsibilities of the Chairman of the Board of Directors in case of vacancy or temporary absence of the Chairman of the Board of Directors.
  7. Exclusive powers of the Board of Directors are:

1)      adopting, at the suggestion of the Executive Director of the Agency, of the size of calendar and emergency contributions designated for the Deposit Protection Fund;

2)      development of normative acts necessary for the execution of the provisions of this Law, and submission them to the Government for approval;

3)      approval of the organizational structure of the Agency;

4)      management of the activities of the Agency’s internal audit department;

5)      taking decisions on payment of compensations to depositors in case of events guaranteed against, at the suggestion of the Executive Director of the Agency;

6)      determining the investment policy of, and establishing restrictions on the contractors to, the Agency, at the suggestion of the Executive Director of the Agency;

7)      approval of the Agency’s budget and of the report on its implementation;

8)      approval of the Annual Report of the Agency;

9)      annual hearing of the report of the Executive Director of the Agency;

10)   exercise of other powers provided for by this Law.

Article 14. Executive Director of the Agency

  1. The Executive Director  of the Agency and his deputy are appointed by the President at the suggestion of the Board of Directors of the Agency. The Executive Director and deputy may be repeatedly appointed to the office

See:

The Decree of the President of the KR of 22 July 2008 UP No 259 “On Zh. T. Kasymov”;

The Decree of the President of the KR of 11 September 2008 RP No 215 “On G. J. Batyrkanova”)

  1. The Executive Director of the Agency:

1)      makes decisions on all issues relating to the Agency’s activities, with the exception of issues assigned to the competence of the Board of Directors of the Agency;

2)      bears responsibility for the day-to-day activities of the Agency;

3)      bears responsibility for the employment of qualified personnel and invited experts;

4)      bears responsibility for the use of the funds of the Deposit Protection Fund, and for the implementation and results of the Agency’s investing activities;

5)      acts on behalf of the Agency and represents the interests of the Agency in all legal, and governmental organs, and other institutions and organizations regardless of their organizational and legal forms, as well as in relations with individual entrepreneurs and citizens, and

6)       carry out any activities that are necessary to implement the powers set out in this article.

 Article 15. Meetings of the Board of Directors

  1. The Board of Directors conducts its meetings according to necessity but not less frequently than once per quarter. The quorum at the meetings of the Board of Directors is 5 members. Decisions are made by simple majority of votes of the total number of members of the Board of Directors. At tie votes, the Chairman of the Board of Directors shall have the casting vote.
  2. Extraordinary meetings of the Board of Directors may be called at the initiative of the Chairman of the Board of Directors or four its members.
  3. The members of the Board of Directors cannot delegate their powers.
  4. At each meeting, the secretary of the Board of Directors keeps minutes to be signed by the member of the Board of Directors chairing the meeting and the secretary. The minutes must include a brief description of the issues discussed and the opinions of all members of the Board of Directors.
  5. A decision of the Board of Director shall be made in the form of resolutions to be signed by the Chairman. On each issue, a voting sheet shall be maintained which shall be signed by each member of the Board of Directors attending the meeting and make part of the minutes of the meeting of the Board of Directors.
  6. The decisions and minutes of the Board of Directors shall be kept permanently.
  7. Any vacancy in the Board of Directors shall be filled in the same way as the initial appointment in accordance with Articles 13 and 18 of this Law.
  8. In case of a vacancy, a new member of the Board of Directors may be appointed.
  9. Any vacancy shall be filled within 30 days.

  Article 16. Vacancies in the Board of Directors

Article 17. Resignation and dismissal from office

Members of the Board of Directors shall be dismissed from office by the persons that appointed them only in the following cases:

  1. at the expiry of the term of office;
  2. at a personal request;
  3. in case of commitment of a criminal crime established by a verdict of a court of law that has come into force;
  4. if further exercise of official duties is impossible which fact is confirmed by a conclusion of an official medical committee;
  5. loss of the citizenship of the Kyrgyz Republic;
  6. failure to meet (violation of) the requirements provided in Articles 18 and 19 of this Law;
  7. failure to perform the powers of a member of the Board of Directors within 6 successive months without adequate reason;
  8. dismissal from the main position in an organ represented by such member of the Board of Directors;
  9. violation of official duties and commitment of actions inflicting the interests of the Agency or violation of this Law and the Laws of the Kyrgyz Republic “On the National Bank of the Kyrgyz Republic”, “On Banks and Banking Activity in the Kyrgyz Republic”, at the recommendation of the majority of the members of the Board of Directors to the person that appointed them.
  10. Members of the Board of Directors must:

Article 18. Professional requirements to the members of the Board of Directors of the Agency

¾    have higher education;

¾    have professional experience of not less than 3 years in banking, economic or financial areas;

¾    have experience of work at managerial positions in banking and/or financial systems or at positions connected with economic (financial) activities;

¾    be citizens of the Kyrgyz Republic;

  1. Members of the Board of Directors cannot simultaneously hold positions or otherwise exercise duties at participating banks of the deposit protection system and persons affiliated with them.
  2. Members of the Board of Directors cannot have shares in commercial banks and persons affiliated with the banks. If at the appointment to office a member of the Board of Directors holds (manages) shares in a bank, he shall be obligated within 30 days reassign ownership of such shares to an independent trustee for management or alienate or sell them.
  3. A person shall not have the right to be member of the Board of Directors:

2)      if in respect of such person a verdict of guilty has been made by a court of law prohibiting him to work in financial and credit systems;

3)      if in respect of such person a verdict of guilty has been made for commitment of crimes in the areas of economy, finance and banking as well as for abuse of power;

4)      if such a person was a Chairman of the Board of Directors, member of the Board of Directors, Chairman of the Executive Board, Chairman of the Audit Committee, chief accountant, head of the internal audit department of a financial or credit institution that was subjected to the procedure of forced liquidation, and there is evidence confirming that the actions (failure to take action) of such person have substantially facilitated the emergence of the situation for forced liquidation;

5)      if such a person has criminal conviction not yet annulled or expired in the order provided for by the legislation of the Kyrgyz Republic or other state;

6)      if such a person is a close relative of a member of the Board of Directors of the Agency and/or important participant, member of the Executive Board, or member of the Board of Directors of a participant bank.

  1. The management and staff of the Agency, including former ones, which in accordance with this Law had access to information shall bear criminal or other responsibility in accordance with the legislation of the Kyrgyz Republic for its illegal disclosure or use for personal purposes.
  2. Failure to comply with the clauses of this Article shall be deemed an abuse of power and a member of the Board of Directors shall be dismissed from office within 30 days of the date the fact of violation was established in accordance with paragraph 9 of Article 17 of this Law or immediately—in case of violation of parts 2 and 4 of this Article.

Article 19. Conflict of Interest

1. Prior to their appointment to office, the candidate members of the Board of Directors and other officials of the Agency shall submit written information regarding their and their close relatives’ commercial, business, and other material and personal interest; and before the establishment of the Agency – to the appointing authority based on the form developed by the National Bank.

2. Annually, the members of the Board of Directors and other officials of the Agency shall submit to the Agency written information regarding their and their close relatives’ commercial, business, and other material and personal interest based on the form set by the Agency.

3. The members of the Board of Directors shall not attend and shall have no right to participate in discussion and voting on issues in which they or their close relatives, and also their related persons have personal interest (direct or indirect).

4. The members of the Board of Directors shall be obliged to facilitate disclosure of facts causing conflict of interest.

5. Non-execution of the provisions of this Article shall be considered as violation of official powers, and shall be the basis for consideration of the dismission from the Agency in compliance with paragraph 9 Article 17 of this Law.

Chapter VI

Participation in the Deposit Protection Fund

Article 20. Participation in the deposit protection system

1. In compliance with the requirements of this Law, participation in the deposit protection system shall be mandatory for all resident banks and all branches of foreign banks located in the Kyrgyz Republic.

2. The bank participating in the deposit protection system shall comply with all mandatory ratios and requirements specified in the legislation of the Kyrgyz Republic and regulations of the National Bank, and it shall:

а) have satisfactory financial standing, provide information about its performance over the previous years and Bank Development Strategy for the future;

б) have adequate capital and comply with other  capital requirements for banks;

в) Potential Loss Provisions shall be adequate to the asset quality;

г) the management shall be able to ensure safe and efficient operation of the bank in compliance with the laws of the Kyrgyz Republic, and to comply with established qualification requirements;

д) have required level of revenues;

е) maintain required level of bank’s liquidity;

ж) have adequate internal control system and internal audit service;

з) accounting and reporting shall comply with established Accounting and Financial Reporting Standards.

3. The National Bank shall have the right to introduce additional criteria for banks participating in the deposit protection system.

4. (Became inoperative in accordance with the Law of the KR No.139, April 29, 2009)

5. Newly created banks shall submit an application to the National Bank for participation in the deposit protection system simultaneously with submission of documents for the banking license. Newly created banks shall be automatically included into the deposit protection system given their compliance with the requirements of the Laws of the Kyrgyz Republic «On the National Bank of the Kyrgyz Republic», «On Banks and Banking in the Kyrgyz Republic», and the requirements set by the National Bank for obtaining the banking license.

After the receipt by the bank of the banking license from the National Bank and transfer of the entrance fee to the Deposit Protection Fund, the National Bank shall send to the Agency a notification certifying the issuance of the banking license with the attached copy of the bank’s application for participation in the deposit protection system. Notification from the National Bank shall be the basis for inclusion of the bank into the Register of banks participating in the deposit protection system. The bank shall become the participant of the deposit protection system from the day of its registration by the Agency in compliance with the established procedure.

(The Law of the KR No.139 as in force on April 29, 2009)

Article 21. Registration and Maintenance of the Register of Banks Participating in the Deposit Protection System 

1. The Agency shall maintain the Register of banks participating in the deposit protection system. Procedure for maintaining the Register shall be defined by the Agency.

2. Registration of a bank in the deposit protection system shall be made by the Agency through its entry in the Register of participating banks.

3. Not later than 2 working days after the registration of the bank in the Register of banks participating in the deposit protection system, this information shall be passed by the Agency to the bank, which must publish it in national newspaper in state and official languages during 5 working days upon its receipt.

4. No fee shall be collected for registration of the bank in the deposit protection system and for the removal from the Register.

5. The bank shall be deregistered by the Agency by its exclusion from the Register of participating banks in compliance with Article 25 of this Law within 5 working days after completion by the Agency of the procedure of paying compensations on deposits.

6. Not later that within 2 working days, the Agency must send to the participating bank information about its removal from the Register, while the latter, in its turn, shall publish it in national newspaper in state and official languages, and place this information at the entrance to the central (head) office of the bank, its branches, saving desks and at ATMs.

(The Law of the KR No.139 as in force on April 29, 2009)

Article 22. Responsibilities of the Bank Participating in the Deposit Protection System

1. Banks participating in the deposit protection system shall have the following responsibilities:

1) pay fees specified in this Law on a timely basis and in full volume;

2) place information about the deposit protection system and bank’s participation in it based on the form prescribed by the Agency in all subdivisions of the bank and other places where this bank accepts deposits, and provide this information to the client free upon request;

3) keep records on bank’s liabilities to its clients based on the form prescribed by the National Bank;

4) pay fines and penalties specified in this Law;

5) comply with other responsibilities specified in this Law.

Article 23. (Became inoperative in compliance with the Law of the KR No.139             Dated April 29, 2009)

Article 24. (Became inoperative in compliance with the Law of the KR No.139             Dated April 29, 2009)

Article 25. Implications of Non-compliance of the Banks Included in the Deposit Protection System with the Requirements for Participation in the Deposit Protection System  

1. The banks included in the deposit protection system must comply with the requirements of this Law and other regulatory legal acts regulating banking activity.

2. If the bank participating in the deposit protection system fails to pay contribution to the deposit protection system, or pays it untimely, or not in full volume, it shall be excluded from the deposit protection system.

3. If the bank participating in the deposit protection system:

а) does not keep records in compliance with the requirements of this Law;

б) provides inadequate information to third parties, including advertising information, about participation of the bank in the deposit protection system;

в) violates the requirements of this Law and other regulatory legal acts, -

the National Bank shall have the right to apply any or several of the following measures:

1) impose a fine within the limits up to one percent of the paid in capital of the participating bank;

2) apply measures stipulated for in the Laws of the Kyrgyz Republic «On the National Bank of the Kyrgyz Republic», «On Banks and Banking in the Kyrgyz Republic»;

3) prohibit taking deposits by the bank;

4) revoke the banking license, which would automatically result in termination of the membership in the deposit protection system.

4. In case of termination of the membership in the deposit protection system, the bank shall have no right to accept deposits.

5. In case of revealing any noncompliance specified in subparagraphs «а», «б» and «в» part 3 of this Article, the National Bank may refer instructions to the bank on measures to be taken within specified timeframe. In case they are not taken, the National Bank shall take measures specified in paragraphs 1-4, part 3 of this Article.

6. Bank deposit agreement with natural persons signed by the bank prior to the decision made by the National Bank in compliance with paragraphs 3 and 4, part 3 of this Article, shall not be subject to termination, with the exception of initiative from a depositor requesting termination of the agreement, or in cases provided for in the Law of the Kyrgyz Republic «On Conservation, Liquidation and Bankruptcy of Banks». Such agreement may not be extended.

7. Additional cash received in the deposit since the day when the National Bank had taken measures specified in paragraphs 3 and 4, part 3 of this Article, shall not be deposited to the account, accept for interest accrued in compliance with the bank deposit agreement, and shall be returned to persons, who issued instructions on crediting the deposit account with this money.

8. Banks, which are not allowed to accept deposits due to a ban imposed in compliance with this Article, must place information about termination of their right to accept deposits not later than the working day following the day of imposing such a ban, at the entrance to the central (head) office of the bank, in trading floors, branches, saving desks, and in all premises of the bank accessible for its clients and providing services to its clients.

9. In case of noncompliance of the bank with the responsibilities specified in this Article, the National Bank shall apply measures and sanctions stipulated for in the Laws of the Kyrgyz Republic «On the National Bank of the Kyrgyz Republic» and «On Banks and Banking in the Kyrgyz Republic».

10. Deposits accepted before termination of the membership in the deposit protection system shall be subject to coverage in compliance with this Law prior to expiration of the term specified in the bank deposit agreement. The term of the agreement shall not be extended. Any cash channeled to deposits after termination of the membership in the deposit protection system shall be returned to their senders.

11. Board of Directors of the bank and its Management Board shall be liable for accepting deposits after the imposition of the deposit acceptance ban, suspension and/or termination of the membership in the deposit protection system in compliance with the legislation of the Kyrgyz Republic.

12. The bank shall have no right to call in the contributions made to the deposit protection system. The bank must continue making contributions for the deposits, which are subject to compensation in compliance with this Law, before occurrence of the event guaranteed against.

13. The Agency and the bank, the membership of which was terminated or suspended, or which was imposed the deposit acceptance ban, shall be obliged to:

1) place the following information in state and official languages at the entrance to the central (head) office of the bank and its trading floors, branches, saving desks, and in all premises of the bank accessible for its clients:

а) about the date of suspension of the membership in the deposit protection system;

б) that all deposits accepted prior to the date of imposition of the deposit acceptance ban, termination or suspension of the membership in the deposit protection system, shall be subject to protection in compliance with this Law;

2) publish information specified in paragraph 1, part 13 of this Article, in state and official languages in national newspaper during 2 working days after imposition of the deposit acceptance ban, termination or suspension of the membership in the deposit protection system.

(The Law of the KR No.139 as in force on April 29, 2009)

Chapter VII

 

Financing of the Deposit Protection Fund

Article 26. Contributions to the Deposit Protection Fund

1. Banks participating in the deposit protection system shall pay mandatory contributions to the Deposit Protection Fund based on the rates and within the timeframe specified by the Agency in coordination with the National Bank.

2. Deposit Protection Fund shall be formed until reaching the target value level specified in part 2 Article 43 of this Law, through contributions made by the Government and operating banks in the following proportion:

1) Government — 76 percent;

2) operating banks — 24 percent.

3. Subsequent contributions for maintaining the activity of the Deposit Protection Fund shall be made based on conditions specified in Articles 27-31 of this Law.

4. The Government of the Kyrgyz Republic shall make lump sum contribution to the Deposit Protection Fund at the rate of 100 percent of the amount of the targeted value of the Deposit Protection Fund specified in part 2 Article 43 of this Law, including part of the targeted value of the Deposit Protection Fund which has to be contributed by the banks according to paragraph 2 part 2 of this Article.

Thereat, the Government of the Kyrgyz Republic represented by the Ministry of Finance of the Kyrgyz Republic shall sign an agreement on liability to the Government of the Kyrgyz Republic with the banks participating in the deposit protection system, which joined the system.

4-1. The banks shall make contributions to the Deposit Protection Fund specified in paragraph 2, part 2 of this Article until they repay the part of commercial banks in the Deposit Protection Fund contributed by the Government of the Kyrgyz Republic in compliance with part 4 of this Article. During 3 working days after the entry of these contributions to the Deposit Protection Fund, they shall be transferred by the Agency to the national budget until full repayment of the amount paid by the Government of the Kyrgyz Republic in compliance with part 4 of this Article.

Upon occurrence of the event guaranteed against for participating bank before the date of full repayment of the amount contributed by the Government of the Kyrgyz Republic, the Agency, based on information about the deposit base of participating bank as of the date of occurrence of the event guaranteed against  provided by such participating bank, shall calculate the amount to be paid by such participating bank to the Deposit Protection Fund in compliance with paragraph 2, part 2 of this Article.

During the process of asset distribution, upon occurrence of the event guaranteed against  for the participating bank which signed an agreement with the Government of the Kyrgyz Republic, the amount of liabilities of the participating bank to the Government of the Kyrgyz Republic, calculated by the Agency in compliance with paragraph two of this Article, shall be subject to repayment in fifth queue of creditors in accordance with sequence of payments specified in the Law of the Kyrgyz Republic «On Conservation, Liquidation and Bankruptcy of Banks».

5. Amounts contributed by the bank to the Deposit Protection Fund shall be subject to repayment in case of carrying out the procedure of voluntary liquidation of the bank in compliance with the legislation of the Kyrgyz Republic, if the bank has no arrears on deposits of natural persons, which are subject to protection in compliance with this Law, with the exception of deposits specified in Article 5 of this Law.

6. Contributions specified and paid in compliance with this Law shall be the property of the Deposit Protection Fund, and shall not be subject to repayment, with the exception of cases specified in this Law, and shall be assigned exclusively for paying compensations to depositors upon occurrence of the event guaranteed against  in compliance with this Law.

In case of exclusion of the participating bank from the deposit protection system, its contributions shall not be subject for repayment.

(The Law of the KR No.139 as in force on April 29, 2009)

Article 27. Contributions from Newly Created Banks (Entrance Fees)

1. Newly created banks shall pay the entrance fee within one percent of their authorized capital. Such contribution must be made during 30 calendar days after obtaining the banking license.

2. In case of the increase in the authorized capital, additional membership fee shall not be collected.

3. Subsequent calendar contributions shall be made in accordance with Articles 29-31 of this Law.

Article 28. Contributions from Operating Banks

1. Before occurrence of conditions specified in part 2, Article 43 of this Law, annual contributions of operating banks shall be set at the level of 0.2 percent of the overall deposit base of the bank to reach targeted values set in part 2 Article 26, and part 2 Article 43 of this Law.

2. Contributions from operating banks shall be paid starting with the quarter following after the date of effectiveness of this Law.

3. In case of non-acceptance of operating banks in the deposit Protection System, these banks’ contributions shall be repaid to them, with the exception of the following cases:

1) introduction of direct banking supervision;

2) introduction of temporary management;

3) initiation of conservation procedure;

4) presence, — in the opinion of the National Bank, — of threat to depositors’ interests.

4. Contributions shall be paid on a quarterly basis, not later than 15-th day of the month following after the settlement quarter.

5. Contributions to the Deposit Protection Fund shall be made on non-acceptance basis in case of nonpayment or incomplete payment of contribution amounts, and this shall be specified when signing the agreement with the participating bank and the Agency.

(The Law of the KR No.139 as in force on April 29, 2009)

Article 29. Calendar Contributions

1. Upon occurrence of conditions specified in part 2, Article 43 of this Law, the banks shall annually pay calendar contributions within 0.2 percent of their overall deposit base as of the date after occurrence of conditions specified in part 2, Article 43 of this Law.

The size of contributions shall be calculated by the Agency together with the National Bank proceeding from the necessity of creation and maintaining the Deposit Protection Fund in the size not lower than the value specified in part 2, Article 43 of this Law.

2. The overall deposit base shall be calculated from the average daily basis for one year period ending in the quarter (settlement quarter) preceding the quarter of making the contribution in compliance with part 5 of this Article.

3. For newly created banks, the first calendar contribution shall be calculated by multiplying the overall deposit base of the bank by 1/360 and by the number of days remaining till the end of the settlement quarter from the day of admission to the deposit protection system in compliance with part 5, Article 20 of this Law.

4. For banks, for which the event guaranteed against  has occurred, contributions shall be calculated as of the day of its occurrence in compliance with this Article.

5. Calendar contributions shall be paid on a quarterly basis not later than the 15-th day of the month following after the settlement quarter.

6. Contributions to the Deposit Protection Fund shall be made on non-acceptance basis in case of nonpayment or incomplete payment of contribution amounts, and this shall be specified when signing the agreement with the participating bank and the Agency.

(The Law of the KR No.139 as in force on April 29, 2009)

Article 30. Emergency Contributions

1. If the funds of the Deposit Protection Fund are insufficient for covering the liabilities in compliance with the requirements of this Law, the Board of Directors of the Agency can take one or simultaneously several of the following measures:

1) increase the size of annual contributions, but not more than the double rate of contribution based on the level specified in part 1, Article 29 of this Law;

2) set special lump-sum contributions not exceeding 50 percent of last year contributions;

3) borrow in the market against security of the Government;

4) use provided grant money;

5) apply for and get the loan from the Government at a rate not exceeding the discount rate of the National Bank. The Government shall provide the requested funds during 5 working days upon receipt of the request. If such request results in violation of the law on the national budget of the Kyrgyz Republic for the relevant year, or the Government cannot provide such funds, this issue must be considered at the meeting, — including extraordinary meeting, — of Jogorku Kenesh called during 30 days after submitting the request to the Government. Upon the expiry of this period, resolution on issuing the loan shall be deemed to be made, and the Ministry of Finance shall transfer the required cash not later than within 3 working days.

2. When setting the volume of contributions, the Board of Directors of the Agency shall take into consideration:

1) expenditures of the Deposit Protection Fund related to payment of compensations to depositors;

2) expected operating expenses of the Deposit Protection Fund;

3) revenues of the Agency from investments;

4) recovery of funds from liquidation of banks;

5) influence of contributions on bank’s revenues and its capital;

6) necessity to pay back the borrowings in compliance with paragraphs 3 and 5, part 1 of this Article;

7) any other factors which the Board of Directors may consider appropriate.

If, according to the Agency, introduction of the double rate of contribution for untimely payment of compensations would cause problems for the bank, then the Agency can make different decision.

3. Any increase in contributions, or payment of emergency contributions, or borrowings shall be ratified by the Board of Directors given the approval of the National Bank.

4. The Agency must inform the banks about changes in the size of contributions at least 30 days before the last day of the quarter under the settlement.

(The Law of the KR No.139 as in force on April 29, 2009)

Article 31. Special Provisions

1. All contributions shall be mandatory payments of the banks, and shall be considered as their operating costs with relevant reduction in the tax base.

2. For calculation of deposits in foreign currency, there shall be applied the discount rate of the National Bank as of the last day of the quarter when the payment is made.

3. In case the bank does not make payment in compliance with this Article, it shall pay penalty to be the double size of the annual discount rate set by the National Bank for each day of delay of the amount due. Payment of penalties shall not release the bank from payment of contributions.

4. Upon reaching the targeted value, the Agency can reduce the size of contributions to the Deposit Protection Fund, with the exception of the case, if for the last six months the bank was under the measures and sanctions specified in the Law of the Kyrgyz Republic «On the National Bank of the Kyrgyz Republic».

5. Reduction in the size of contributions to the Deposit Protection Fund shall be made after full repayment of money borrowed by the Fund.

6. In case of decrease in the target value below the established level, the contributions can be increased.

Article 32. Sources of Financing for the Deposit Protection Fund

1. Sources of financing for the Deposit Protection Fund include:

1) contributions specified in this Law and paid by participating banks;

2) contributions made by the Government;

3) interest and investment revenues of the Agency from placement of liquid assets;

4) cash collected as a result of liquidation of banks in compliance with Article 8 of this Law;

5) fines and penalties paid by participating banks;

6) (Became inoperative in compliance with the Law of the KR No.139,           dated April 29, 2009)

7) cash received as assistance, and not subject to repayment;

8) market borrowings secured by the Government;

9) credits provided by the Government;

10) other funds received in compliance with the legislation of the Kyrgyz Republic.

2. Net revenues received by the Deposit Protection Fund shall be capitalized, and shall not be subject to distribution.

(The Law of the KR No.139 as in force on April 29, 2009)

Article 33. Accounts of the Agency and Investment Policy

(Title of the Article in the Law of the KR No.139 as in force on April 29, 2009)

1. Account of the Agency for replenishment of the Deposit Protection Fund by contributions from the Government of the Kyrgyz Republic and commercial banks shall be opened with and serviced by the National Bank.

Bank accounts of the Agency intended for operating costs and other expenditures of the Agency shall be opened with commercial banks.

2. The Agency can invest in securities:

1) issued and/or unconditionally secured by the Government;

2) issued by the National Bank;

3) other securities determined by the legislation of the Kyrgyz Republic.

The order and parameters of investing are determined by the Government of the Kyrgyz Republic.

3. Operating costs of the Agency and other expenditures related to implementation of tasks placed on the Agency, for each financial year shall be covered at the expense of:

1) 2 percent a year of the target value of the Deposit Protection Fund, and thereafter, 2 percent of the accumulated funds in the Deposit Protection Fund and compensation payments that shall be repaid to the Fund calculated as of beginning of a year;

2) 25 % of income received due to investing of available funds of the DPF;

3)  other funds.

(The Law of the KR No.139 as in force on April 29, 2009, the Law of the KR No.42 as in force on March 12, 2010)

Article 34. Use of Funds of the Deposit Protection Fund

Funds of the Deposit Protection Fund can be used only for the following payments and expenditures:

1) for payment of compensations to depositors based on procedures and in the amount specified in this Law;

2) for covering operating costs of the Agency;

3) for making payments on the principal and interest on loans and credits obtained by the Agency in compliance with this Law.

Article 35. Tax Exemption Status

1. Revenues, funds, transactions and the property of the Agency and the Deposit Protection Fund shall not be subject to taxation in compliance with the legislation of the Kyrgyz republic.

2. The Agency shall be exempted from payment of the state duty in courts of the Kyrgyz Republic.

Chapter VIII

Reporting, Audit and Publications

Article 36. Reporting and Information Provided to the Agency

1. In order to implement the requirements of this Law, every participating bank must provide to the Agency and the National Bank the required forms of reports, the procedure, content and frequency of which shall be determined by the Government as agreed upon with the National Bank.

2. At the request of the Agency, the National Bank shall provide information required for implementation of this Law.

3. For implementing functions specified in this Law, the Agency shall have the right to obtain information representing bank’s official, commercial and bank secrecy, for which event guaranteed against  has occurred.

4. In case of disclosure by the Agency or its officials of information representing official, commercial and bank secrecy, the Agency shall be liable in compliance with the legislation of the Kyrgyz Republic.

5. Persons who disclosed official, commercial and bank secrecy shall bear personal liability in compliance with the legislation of the Kyrgyz Republic.

Article 37. Reporting of the Deposit Protection Agency

1. Financial year of the Agency shall be from 1 of January to 31 of December included.

2. The Agency shall maintain ongoing accounting and reporting in compliance with International Accounting Standards.

3. The Agency shall prepare annual financial reports in compliance with Article 40 of this Law.

Article 38. Audit of the Deposit Protection Agency

1. Not later than 6 months before the end of the financial year, the Board of Directors shall select through the bidding process independent audit organization to conduct external audit of the Agency.

2. In accordance with an agreement signed with the audit organization, the Agency shall provide reports and information required for the audit.

3. Payment for services of the audit organization on the audit of the Agency shall be made at the expense of operating expenses of the Agency.

Article 39. Internal Control

The Agency shall have adequate internal control system, including the Internal Control Service reportable to the Board of Directors.

Article 40. Annual Report of the Agency

1. Annual Report of the Agency shall be approved by the Board of Directors, and it shall include:

1) audited financial reports of the Agency, which include all disclosures  required by the International Accounting Standards;

2) analysis of the Agency’s activity and the state of the Deposit Protection Fund;

3) other reports on the activities of the Agency determined by the Board of Directors of the Agency, and required for adequate disclosure of transactions and activities of the Agency.

2. The Agency shall annually provide its Annual Report to the relevant committee of Jogorku Kenesh, to the Government and the National Bank not later than 30 of April of the year following the reporting year.

3. The forms of the financial reporting of the Agency, including the Profit and Loss Account, its statement on financial condition based on the Balance Sheet, Cash Flow Statement, and the Report on Changes in the Capital Structure shall be provided upon request of any person.

Article 41. Publications

1. On a quarterly basis, the Agency shall publish in mass media its financial reports based on the form set by the Board of Directors of the Agency and agreed upon with the National Bank.

2. The Agency shall annually publish in mass media key analytical data included in the Annual Report based on the form set by the National Bank.

3. During 5 working days after publication of data specified in parts 1 and 2 of this Article, the Agency shall provide properly legalized copies of the publications to the National Bank.

Article 42.  Interrelation Principles for the Agency and the National Bank

1. The Agency and the National Bank shall coordinate their activity in compliance with this Law and other regulatory legal acts

2. Not later than during 3 working days after making appropriate decision, the National Bank shall inform the Agency about:

1) issuance of banking license;

2) making decision on the inspection of a bank by the request of the Agency, as specified in paragraph 1, part 6 of this Article;

3) bank reorganization or liquidation;

4) applying by the National Bank of the following:

5) putting restrictions on acceptance and repayment of deposits;

б) appointment of a conservator;

7) suspension or revocation of license;

8) measures applied by the National Bank at the suggestion of the Agency.9

3. Not later than the working day after the day of making appropriate decision, the Agency shall inform the National Bank in written about registration of the bank in the Register of Banks, and deregistration of the bank from this Register.

4. The Agency shall be obliged to provide to the National Bank information about all events (facts) specified in Articles 13-19, 21-22, 30, 33 и 40 of this Law based on procedure and form set by the National Bank.

5. The National Bank can request other information required for implementation of this Law.8.

6. The Agency shall have the right to apply to the National Bank with proposal:

1) for the National Bank to conduct targeted inspection of any bank in order to check its compliance with this Law;

2) for the National Bank to take preventive measures and sanctions with regard to any bank.

Chapter IX

Effectiveness of this Law

Article 43. Effectiveness of this Law

1. This Law shall become effective upon expiry of 3 months after its official publication, with the exception of conditions specified in part 2 of this Article.

Had been published in Erkintoo Newspaper No.33, dated May 13, 2008

2. Provisions of this Law on occurrence of event guaranteed against  and its implications shall become effective not earlier than the target value of the Deposit Protection Fund is reached, which shall be 15 percent of insured deposits of all the banks operating as of the day of effectiveness of this Law calculated as of the latest reporting date preceding the date of this Law’s effectiveness.

3. The Government shall take organizational measures to organize the Deposit Protection Agency, and shall settle the issues of its logistic support.

(The Law of the KR No.139 as in force on April 29, 2009)

Article 44. Concluding Provisions

1. Part 1, Article 31 and part 1, Article 35 of this Law shall become effective after making relevant amendments in the Tax Code of the Kyrgyz Republic.

2. Part 2, Article 35 shall become effective after making relevant amendments in the Law of the Kyrgyz Republic «On State Duty».

3. Provisions specified in this Law and regulating revocation of license from banks and imposing restrictions on them shall become effective after making relevant amendments and additions in the Law of the Kyrgyz Republic «On Banks and Banking in the Kyrgyz Republic».

4. During 3 months after signing of this Law, the Government of the Kyrgyz Republic shall bring its regulatory legal acts in compliance with this Law.

President of the Kyrgyz Republic K. Bakiev

 

Enacted by Jogorku Kenesh

Kyrgyz Republic

7 of March, 2008

 

 

Добавить комментарий