The NBKR adopted amendments aimed at solving issues related to the reorganization of banks and coordination of officials

The National Bank submits a draft resolution of the NBKR Board “On Amending Certain Normative Legal Acts of the National Bank of the Kyrgyz Republic” for public discussion.

According to the materials of the regulator, the project aims to streamline the issues of ensuring the uninterrupted provision of banking services by reorganized banks, providing banks with opportunity to appoint persons with relevant work experience as managing directors, resolving issues related to requirements for members of the Board of Directors and the Sharia Board, as well as setting standards governing the transparency of the decision-making process at shareholders meetings by the person heading the banking group.

The project proposes to establish a norm governing the specifics of coordination of managing directors of the bank who are not members of the board and are in charge of cybersecurity and information technology, security, legal support.

The project also provides for the inclusion in the Regulation “On Licensing the Activities of Bank” of standards allowing to suspend the procedure of approving amendments, and additions to the constituent documents of reorganized banks if it is necessary to carry out an inspection check on compliance with the requirements of the banking legislation by the reorganized banks and the reliability of the information provided by the reorganized banks to exclude cases of violation rights, and interests of bank customers, as well as ensuring continuity provision of banking services.

Additionally, the project proposes to strengthen the requirements for members of the Shariah Council, namely: to establish the terms for their election by no more than five years, and the requirement that at least one member of the Shariah Council be a citizen of the Kyrgyz Republic, speaking a state and/or official language. The proposed changes are aimed at developing the role of local Sharia scholars practicing the traditional moderate form of Sunni Islam on the basis of the Hanafism religious law school, which is laid down in the Kyrgyz Republic’s Concept of Public Policy in the Religious Sphere for 2014-2020, approved by the Decree of the President of the Kyrgyz Republic dated 14.11.2014, No. 203.

It is proposed to establish these requirements for members of the Shariah Council of banks, microfinance companies, microcredit companies, credit unions, and OJSC “FCCU”.

Additionally, a norm has been established that allows BIC to be assigned to branches of reorganizes banks before they re-register with an authorized state body to ensure uninterrupted provision of banking services to bank customers.

The norms are also established according to which if the majority of the board members have not had at least two years of seniority in positions in the banking and / or financial system in recent years, the National Bank is entitled to suspend approval of members of the board of directors of the bank until its composition in accordance with the requirement, and the bank must, within one month, bring the composition of the board of directors in accordance with the requirements of the Regulation.

Also, to ensure transparency in the management of the banking group, a norm, in accordance with which a bank headed by a banking group, a bank holding company or a parent / management company controlling a group of legal entities must have approved internal documents governing the implementation of shareholder rights stipulated by law, including the procedure for issuing a power of attorney to participate in meetings of shareholders, the procedure for making decisions on the nomination of candidates for supervising control and other issues referred to the General Meeting of Shareholders has been established.

It is also proposed to resolve the issues of approving candidates for the positions of members of the board of directors in subsidiary commercial banks, and guarantee funds of the National Bank, if the are employees of the National Bank.