Our credit auctions showed that banks and clients today are not able to absorb large amounts due to a decrease in business activity – T. Abdygulov

“COVID-19 has suddenly come and many things need a new approach. The NBKR is changing its strategy a little,” said the head of the NBKR Tolkunbek Abdygulov at a meeting of the Jogorku Kenesh Committee on Budget and Finance on June 15 when considering the NBKR’s 2019 report.

According to him, after the end of the quarantine, the NBKR first of all simplified the remote identification database. “Now we have intensified our activity on non-cash payments through mobile devices using electronic wallets. Together with mobile operators, we came to an agreement that by the end of the year they will identify all their e-wallets, we have set limits on them for unidentified users.

In addition, we have held three credit auctions to date, we gave 1 billion KGS to replenish working capital 10%, not exceeding. They gave 260 million KGS to the microfinance sector so that the interest rate would not be higher than 14%. We have directed 1 billion KGS on behalf of the JK to the authorized capital of the Guarantee Fund, which has already been formed,” – T. Abdygulov said.

He also said that the NBKR plans to hold a credit auction in the coming weeks. “The issue of absorption is here. Our credit auctions showed that banks and clients are currently unable to absorb large amounts due to the decline in business activity. This is due to the fact that while the borders are closed, while economic activity with trading partners in the EAEU and China has not yet recovered. We are ready to provide resources, and we are also working to create new programs with the government on concessional lending. A new package of anti-crisis measures has been approved, the Ministry of Finance is negotiating with commercial banks, we will provide liquidity where it is not enough,”- T. Abdygulov said.

At the same time, he noted that the NBKR is still a conservative organization: it approaches everything with the aim that it is necessary to help, but at the same time not to break market conditions. “If we get too carried away with non-market mechanisms, then the banking system will cease to exist, then banks will have no desire to attract deposits from the population and the function of financial intermediation will be replaced by our interventions. We work closely with commercial banks and the government, but the amount of money offered by the NBKR to commercial banks will be increased several times,” – T. Abdygulov said.