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Appendix to Resolution No. 

2017-P-12/25-9-(RLA) of the National Bank of the Kyrgyz Republic Board as of June 15, 2017  

REGULATION  

on the Procedure for Conduct of Some Banking Operations by the Banks of the Kyrgyz Republic in the event of the Provisional Administration Regime Imposition or the Start of the Liquidation Procedure  

Chapter 1. General Provisions 

1. This Regulation determines the procedure for conduct of some banking operations as well as the conditions enabling the National Bank of the Kyrgyz Republic (hereinafter the National Bank) to recognize as irrevocable the instructions for transfer of the funds and the securities provided by the bank to the trade and/or payment system in the event of the Provisional Administration regime imposition or the start of the liquidation procedure in a commercial bank or the State Development Bank of the Kyrgyz Republic.  

2. This Regulation shall cover the activity of the commercial banks of the Kyrgyz Republic, including ones that carry out the operations under the Principles of Islamic Banking and Finance or have an “Islamic window”, taking into account the special terminology applied by them when carrying out banking operations licensed by the National Bank, and the State Development Bank of the Kyrgyz Republic (hereinafter the banks), their clients, operators and members of the trade and payment systems of the Kyrgyz Republic. 

3. The responsibility for ensuring timely execution of the norms of this Regulation, smooth functioning and compliance with the operating procedures of the trade and payment systems is taken by the banks, the operators and the members of the systems as well as the custodians and the sub-custodians. The responsibility of the operators and/or the members of the trade and payment systems shall be set in relevant agreements/contracts between the operators and the members of the system as well as between the custodians and the sub-custodians. 

Chapter 2. Basic Terms 

4. Within the frameworks of this Regulation it is determined that: 

1) irrevocable instructions to transfer the funds and the securities provided by the bank to the trade and/or payment system recognized as such by the National Bank have the legal force and are binding for the third parties if the Provisional Administration regime is imposed or the liquidation procedure of the bank starts; 

2) if the bank provides the irrevocable instructions to transfer the funds or the securities to the trade and/or payment system after the start of the Provisional Administration regime or liquidation of the bank, the instructions have no legal force and are not binding for the third parties only if a Provisional Administrator or a liquidator proves that the system operator has known about the start of the Provisional Administration regime or liquidation of the bank before the transfer instructions have become irrevocable. 

5. Contracts and transactions concluded under the suspensive condition prior to the start of the Provisional Administration regime or liquidation of the bank cannot lead to cancelation of the clearing results made through the trade and/or payment system recognized as such by the National Bank due to the start of the Provisional Administration regime or liquidation of the bank. 

6. The system operator, the member, a payment mediator and a clearing center from the moment when they have become aware of the start of the Provisional Administration regime or liquidation of the bank shall take all required measures in order to prevent transfer of the funds or the securities to the trade and/or payment system. 

7. In addition, for purposes of this Regulation the following definitions are used: 

A Provisional Administrator is a person appointed by the National Bank as a Provisional Administrator or as the head of the Provisional Administration in order to implement the Provisional Administration regime in the bank; 

banknote operations are the operations of cash deposit to a correspondent account opened with a problem bank for another bank (an account similar to the “Loro” account) or with another bank in the name of the problem bank (an account similar to a “Nostro” account); 

a banking payment card (a payment card) is a payment instrument enabling its holder to carry out the operations on purchase of goods, services, receipt of cash in the national and foreign currency through terminals or other devices as well as a means of access to the bank account so that its holder can manage the funds on the bank account, and also can account and carry out the operations with precious metals placed on a depersonalized metal account opened with an issuer in accordance with the legislation of the Kyrgyz Republic and an agreement between a cardholder and the issuer;  

a remittance without a bank account opening is the transfer of the funds, a banking operation that is carried out by the bank by accepting the cash in the national or foreign currency from an individual and the further transfer to the specified individual (a recipient) in the Kyrgyz Republic or outside it through the money transfer system; 

a government securities custodian (hereinafter the GS) is a legal entity of the Kyrgyz Republic involved into custodian accounting and storage of the GS, registration of transfer and confirmation of the ownership right to the GS; 

a sub-custodian is a custodian that has concluded an agreement with the National Bank for fulfillment of the functions to account the flow of the GS and that has a custody account with the government securities custodian; 

a custody account is a record (or a set of records) created for each GS for purposes of their accounting and storage; 

a custody operation is an operation for temporary withdrawal of the funds in the national currency by the National Bank under the terms of repayment, interest payment and maturity; 

closing operations are the operations that at the moment of the Provisional Administration regime imposition in the bank or the start of the banks liquidation procedure have not been carried out, but are recognized as irrevocable and subject to the binding fulfillment in the manner set by this Regulation; 

a client: 

1) in relations between the banks, a client is a bank concluding a transaction with the problem bank; 

2) in relations of the bank with other persons, a client is a person concluding a transaction with the problem bank; 

conversion operations are currency operations related to purchase/sale of one currency in exchange for another; 

a correspondent account is a bank account where payments made by one bank on the instruction and at the expense of the other based on the agreement are reflected; 

“clearing”" meads transformation into one net claim or one net liability of the claims and the liabilities resulting from the transfer instructions that one or several members of the settlement system make to one or several other members of this system or receive from them, as a result only one net claim or one net liability remains; 

an interbank loan is a loan disbursed or received by the problem bank under the transaction with another bank; 

refinancing operations of the National Bank are the instruments of the monetary policy of the National Bank, within the frameworks of which the bank is provided with the credit facilities under the terms of maturity, payment of interests, repayment and if the bank meets the requirements of the National Bank to receive the refinancing loans; 

assets exchange is an operation of cash withdrawal (providing cashless funds in exchange for cash) or cash deposit (providing cash in exchange for cashless funds) carried out between the banks; 

final settlement is the settlement made on accounts of the financial and credit institutions opened with the National Bank through the gross settlement system in the real time mode. The final settlement is unconditional and irrevocable; 

a payment system operator is a legal entity that has a license/registration of the National Bank depending on the types and the category of the payment system, ensuring operation of the payment system and having concluded with the members an agreement for participation in the payment system, according to which the operator and the members of the payment system undertake to carry out their activity within the frameworks of the payment system in accordance with the legislation of the Kyrgyz Republic; 

a trade system operator is a structural subdivision of the National Bank responsible for the operating procedure of the trade systems as well as compliance of the conducted operations with the existing operation rules in the trade systems of the National Bank; 

a transfer instruction is an instruction for the transfer provided to the trade and/or payment system that becomes irrevocable at the moment determined by the rules of this system; 

a problem bank is the bank with regard to which the Provisional Administration has been imposed or the liquidation procedure has been applied (hereinafter the bank); 

a rediscount operation is an operation on purchase of the GS by the National Bank at the secondary market from the banks at the price and the maturity of the purchased GS set by the National Bank; 

retail payments are payments for average and small amounts that are non-urgent and/or regular. The amount of the retail and regular payments is set by the regulatory legal acts of the National Bank; 

a repo operation is the operation on purchase/sale of the GS at the secondary market with the liability of their repurchase at the definite date in the future at the previously agreed price; 

a swap operation is the operation to exchange one currency for the equivalent amount in another currency with the liability of the reverse conversion of the principals and the accrued interests in a previously agreed period; 

a spot operation is the operation on purchase/sale of the financial assets, the settlements on which are made within one-two business days; 

payment system members (hereinafter the Member) are the commercial banks and other financial and credit institutions, non-financial and credit institutions and other institutions providing the payment services to the population in the Kyrgyz Republic based on the agreement concluded with the payment system operator; 

a trade system member (hereinafter the Member) is the bank having the access to the trade systems of the National Bank and having a correspondent (current) account with the National Bank; 

forward operations are operations with the currency envisaging supply of the currency at some date in the future at the price agreed during conclusion of a forward contract. 

Chapter 3. General Terms for Conduct of Some Banking Operations when Imposing the Provisional Administration Regime in the Bank  

8. A decision on imposition of the Provisional Administration regime in the bank shall be taken by the National Bank in accordance with the Law of the Kyrgyz Republic “On the National Bank of the Kyrgyz Republic, Banks and Banking Activity” and the regulatory legal acts of the National Bank. 

9. The working time of the problem bank shall be set in a relevant decision of the National Bank from the moment of imposition or in the process of the Provisional Administration regime implementation. If there are no instructions regarding the working time in the decision of the National Bank, the operations are carried out in accordance with this Regulation. 

10. From the moment of the Provisional Administration regime imposition, the National Bank, if required, is entitled unilaterally to block the correspondent (current) account of the Member for making payments and settlements or to set restrictions in accordance with the legislation of the Kyrgyz Republic. The procedure for making the payments of the Member and the final settlements shall be set by this Regulation or in accordance with the decision of the National Bank. 

11. Based on the decision of the National Bank, the operators of the payment and trade systems unilaterally without a preliminary notice block the Member, the access of the Members users to the system and the signing certificates of the Members users in the system with subsequent notification of other members. 

12. The National Bank in order to ensure the stable operation of the banking and payment systems, preservation of the assets in the interests of the depositors and other lenders of the bank is entitled, if the bank has enough assets, first of all, for making settlements with the depositors individuals, besides conduct of the closing operations, to permit the bank to carry out all or some types of the banking operations. 

13. The right to carry out swap and repo operations, deposit operations in the national currency, rediscount and conversion operations with the National Bank as well as operations at the primary and secondary markets of the GS can be provided to the problem bank based on the relevant decision of the National Bank. 

14. In order to preserve the assets, the prohibition to carry out some operations at the FX market can be imposed on the problem bank by the decision of the National Bank. 

15. If the bank does not have enough assets for settlements with the depositors individuals, the bank is allowed to carry out only closing operations or some operations in accordance with the decision of the National Bank. 

Chapter 4. Terms to Recognize the Closing Operations as Irrevocable 

16. The National Bank recognizes the operations as irrevocable, the settlements on which are made through the correspondent/current account opened with the National Bank. 

17. The operations, the settlements on which are made not through the correspondent/current account opened with the National Bank are recognized as irrevocable in a judicial manner in the following events: 

1) if the settlement is completely made on this operation prior to imposition of the Provisional Administration regime or prior to receipt of the information on imposition of the Provisional Administration regime by the settlement system; 

2) if the complete settlement is not made on this operation, but the claims and the instructions on it have already been provided to the settlement system that makes the settlements in the automatic mode and its cancelation in this system is not envisaged for the problem bank or for a person, at the request or the instruction of who, the operation is carried out. 

18. The operations are recognized as irrevocable and final based on the requirements set in the regulatory legal acts of the National Bank. 

19. For purposes of this Regulation, the closing operations are: 

1) fulfillment of the Members instructions for the transfer of the funds or the securities as well as the instructions of other members for the transfer of the funds or the securities in favor of the bank provided to the trade and/or payment system prior to receipt of the notice by the operator and imposition of the Provisional Administration regime in the bank. These instructions are recognized as irrevocable, are enforceable and binding for the third parties. The system operators shall complete the transaction and make the final settlement on all above instructions; 

2) settlements with other members within the frameworks of the settlement systems using banking payment cards, if the operations using the cards have been carried out prior to imposition of the Provisional Administration regime in the bank and have become irrevocable. The Member must make the settlements with other members within the period set by the settlement systems using banking payment cards; 

3) settlements on retail payments, including payments with the State customs service and/or the State revenue service under the Government of the Kyrgyz Republic, the state budget as well as the organizations providing utility services and communication services, the information on payment of which has been received by the payment system prior to imposition of the Provisional Administration regime in the bank. These payments are recognized as irrevocable and the settlements on them are made within the period set by the operating procedure of the interbank payment systems; 

4) settlements on transboundary payments, if the payments have been made prior to imposition of the Provisional Administration regime in the bank and have become irrevocable, and the settlement date coincides with the period of imposition of the Provisional Administration regime in the bank. The Member must make settlements on them. The procedure and the periods of the settlements on the transboundary payments in the event of imposition of the Provisional Administration regime in the bank shall be set in a relevant agreement between the operator of this system and the correspondent bank; 

5) settlements with other members on swap and repo operations, on refinancing operations, on “assets exchange” when carrying out conversion transactions, if these transactions have been concluded prior to imposition of the Provisional Administration regime in the bank; 

6) settlements with other members within the frameworks of the settlements systems using electronic money, if the operations using the electronic money have been carried out prior to imposition of the Provisional Administration regime in the bank and have become irrevocable. The Member must make settlements with other members within the period set by the rules of the settlement systems using the electronic money; 

7) settlements on other interbank operations carried out in accordance with the requirements of this Regulation. 

Chapter 5. Special Aspects for Conduct of Closing Operations “Swap”, “Repo”, Deposit Operations in the National Currency, “Forward”, Conversion Operations, Assets Exchange Operations (Conversion Operations) when Imposing the Provisional Administration Regime in the Bank  

20. If at the moment of the Provisional Administration regime imposition in the bank, the liabilities on repo and swap operations, deposit operations in the national currency of the bank to the National Bank have matured and vice versa, these liabilities shall be fully fulfilled in accordance with the concluded agreements (or equivalent documents) unless otherwise stipulated by the decision of the National Bank or other authorized bodies. If the bank fails to fulfill or improperly fulfills its liabilities on swap operations, repo operations and deposit operations in the national currency as well as on assets exchange (conversion operations), the National Bank is entitled to write off without acceptance (indisputably) the funds in the amount of the unfulfilled liabilities from the correspondent account of the bank. If the situation occurs when the bank does not fulfill its liabilities to return the funds on swap operations, repo operations, deposit operations in the national currency and conversion operations, and it is impossible for the National Bank to write off without acceptance the funds in the amount of the unfulfilled liabilities from the correspondent account of the bank due to absence of the sufficient funds, the disputes between the parties shall be settled in accordance with the legislation of the Kyrgyz Republic. 

21. If at the moment of the Provisional Administration regime imposition in the bank in absence of a special instruction in the decision of the National Bank in accordance with Clause 9 of this Regulation, the liabilities “spot”, “swap” “forward”, “repo”, “interbank loan”, “assets exchange” (conversion operations) of the bank have matured, the bank is entitled to complete these interbank transactions within the set periods if the following terms are met: 

1) the operation is carried out by the bank that is not a problem bank or is not a person related to the problem bank;  

2) the operation does not violate the principle of impartiality set by the legislation and the regulatory legal acts of the National Bank; 

3) according to the terms of the transaction the problem bank has already supplied the funds to another bank or the funds have been already received by the problem bank; 

4) as a result of the operation, the bank will legally and actually only replace the currency of the asset. 

22. If the Provisional Administration regime is imposed, the problem bank shall not carry out the closing operations on “swap” and “repo” contracts with the clients (except for the banks), if the client has not supplied the funds to the problem bank yet. 

23. If the Provisional Administration regime is imposed, the bank is allowed to carry out the closing operations on “swap” and “repo” contracts, if the client has already supplied the funds to the bank, provided the client is not a related person to the bank with regard to which there are no other claims regarding the prohibition to carry out the operations or claims of the law enforcement authorities. 

24. The Provisional Administrator is entitled to suspend conduct of the operations specified in Clauses 22-23 hereof, for the period of up to 7 business days in order to check lawfulness of the operations and fulfillment of the claims of this Regulation. 

25. When carrying out the banknote operations, in the events, when the problem bank has opened the accounts of the “loro” type for the foreign bank and has received the cash for its deposit to these “loro” accounts, the Provisional Administrator is entitled to cancel the operation and to return the funds to the correspondent bank, if the following terms are met: 

1) the funds have not been deposited prior to imposition of the Provisional Administration regime in the bank despite the fact that the cash has already arrived at the building of the problem bank; 

2) if there is a relevant decision of the National Bank according to Clause 9 of this Regulation; 

3) the correspondent bank has approached with a request to terminate the transaction, despite the fact that the cash has already arrived at the premise of the problem bank and has undertaken within 1 business day to solve all organizational issues including payment of relevant expenses on return and transportation of the cash from the premise of the problem bank. 

If the above terms are not fulfilled, the Provisional Administrator is entitled to deposit the funds to the “loro” account of the bank. 

26. When providing the services through the money transfer systems, the conversation into one or another currency is made in accordance with the internal procedures of the bank and the tariffs set for the exchange operations, unless otherwise stipulated by the decision of the National Bank or other authorized bodies for a specific bank. 

Chapter 6. Special Aspects for Conduct of the Closing Operations on the Refinancing Operations of the National Bank when Imposing the Provisional Administration Regime in the Bank  

27. If at the moment of the Provisional Administration regime imposition, the refinancing operations of the National Bank have matured in the problem bank, these liabilities shall be fully fulfilled in accordance with the concluded General agreements and/or other agreements/contracts for receipt of the loan facilities, unless otherwise stipulated by the decision of the National Bank, a judicial act or an investigators warrant. 

28. If at the moment of the Provisional Administration regime imposition, the bank cannot repay the existing debts on the refinancing operations of the National Bank (absence of the funds on the correspondent account), the National Bank is entitled to repay the loan facilities by acceptance-free (undisputable) writing off the funds in the amount of the unfulfilled liabilities from the correspondent account and to foreclose the pledged item in accordance with the legislation of the Kyrgyz Republic. At that, the National Bank preliminary, within three business days, shall notify in writing the bank about its non-fulfillment of the liabilities in time and the start of the foreclosure procedure against the pledged item. 

Chapter 7. Special Aspects for Conduct of the Operations with Securities  

29. The right to carry out the operations at the primary and secondary markets of the GS when imposing the Provisional Administration regime can be provided to the bank based on a relevant decision of the National Bank Board. 

30. If prior to imposition of the Provisional Administration regime the bank has submitted an application for participation in the auction for the GS placement and has won it, this application is irrevocable and binding for making money settlements. If the bank cannot make the settlements on the application won at the auction (there are no funds on the correspondent account), the application of the bank shall be cancelled and the bank is disqualified from further participation at the primary and secondary GS markets until the National Bank takes a separate decision.  

31. If at the moment of the Provisional Administration regime imposition in the bank that is a holder of the GS (government treasury bills, government treasury bonds, notes), the GS or the coupon payments have matured, the National Bank transfers the funds on the redeemed issues or the coupon payments to the correspondent account of the bank opened with the National bank at the maturity date of the GS or the coupon payments. 

32. If at the date of the Provisional Administration regime imposition the bank has the GS in its portfolio that belong to the clients of the bank and that have already matured, the bank shall transfer the funds received for redemption of the GS issues from the Ministry of Finance of the Kyrgyz Republic and the National Bank to the accounts of the GS holders with this bank or at the wish of the clients (except for the GS of the banks clients, with regard to which the National Bank has set the restrictions to carry out any operations) pay the cash through the cash desk of the bank. 

33. If at the date of the Provisional Administration regime imposition in the bank, the GS held by the clients of the bank have not matured, in this event the problem bank can transfer the GS of its clients to another bank, except for the GS of the banks clients with regard to which the National Bank has set the restrictions to carry out any operations. 

34. The Provisional Administrator of the bank shall inform the clients of the problem bank holding the GS about imposition of the Provisional Administration regime in the bank no later than 2 business days after imposition of the Provisional Administration regime and about their right to transfer their own GS to another bank. At that, if the client of the problem bank has expressed a desire to receive the funds from redemption of the GS in another bank, he/she shall submit a written application to the problem bank regarding the transfer of the GS to another bank specifying the name of the bank where the GS will be transferred and the list of the GS issues subject to the transfer to another bank. The responsibility for determination of the list of the problem banks clients holders of the GS and receipt of the specified applications from them shall be taken by the Provisional Administrator of the bank. 

35. The bank where the Provisional Administration regime is imposed, when transferring the GS of the client from the problem bank to another bank shall preliminary hold negotiations with the bank specified in the written application of the client and, at least, two days prior to the maturity of the GS submit the following documents to the National Bank to transfer the GS of the client: 

1) an agreement for the transfer of the GS concluded between the problem bank and the bank where the GS is transferred; 

2) a copy of the written application of the client the holder of the GS for the transfer of the securities to another bank; 

3) a petition letter of the problem bank for the transfer of the clients securities to another bank; 

4) the instructions of these banks for the transfer/acceptance of the GS executed in accordance with the regulatory legal acts of the National Bank. 

36. The National Bank after receipt of the specified documents shall transfer the GS from the problem bank to another bank in the GS custodian. 

37. If upon maturity of the GS, the coupon payments on the GS of the problem banks clients the Provisional Administrator has not provided the GS of the clients from the problem bank to another bank, the funds of the problem banks clients on the redeemed issue and the coupon payments shall be transferred to the correspondent account of the bank opened with the National Bank at the maturity date of the GS or the coupon payments. The bank deposits the funds for redemption of the GS issues received from the Ministry of Finance of the Kyrgyz Republic and the National Bank to the accounts of the GS holders with this bank or at the wish of the clients (except for the GS of the banks clients with regard to which the National Bank has set the restrictions to carry out any operations) pays the cash through the cash desk of the bank. 

38. If the bankruptcy notice of the bank is submitted to the court and there are funds on the accounts of the clients received for redemption of the GS, the bank is obliged to transfer these funds to the account of the National Bank. At that, the bank is obliged to notify these clients about the necessity to submit an application for the transfer of these funds to another bank. 

39. The transferred funds are on the account of the National Bank until the following documents are received from the problem bank: 

1) a petition letter to transfer the clients funds from the account of the National Bank to the account of the client with another bank. The petition letter shall specify: the name/full name of the client, the number of the GS issue, the maturity date of the GS, the number of the redeemed GS, a face value of the redeemed GS, the amount of the coupon payments, the name of the bank where the funds of the redeemed issue are transferred, the number of the clients account and other required information; 

2) copies of the clients written application specifying the details of the account opened with another bank; 

3) confirmation of the bank/the banks branch regarding opening of the account for the client specifying the account number, BIC and the address of the bank. 

40. After receipt of the required documents, the National Bank transfers the funds from the account of the National Bank to the account of the client with another bank specified in the petition letter of the bank and the application of the banks client. 

41. The Provisional Administrator of the bank exercises control and takes responsibility for observance of the GS holders rights accounted in the banks register. 

Chapter 8. Special Aspects for Conduct of Other Banking Operations when Imposing the Provisional Administration Regime in the Bank  

42. The Provisional Administrator of the bank can carry out the following operations for his clients, except for the persons that are related to the bank and affiliated parties as well as the persons having common interests with them and other persons specified in the relevant decisions of the authorized bodies of the Kyrgyz Republic: 

1) for individuals residents of the Kyrgyz Republic to carry out fully the banking operations (except for loan disbursement and equivalent assets, investments to capital, securities, save for the government ones, as well as investments to the fixed assets and intangible assets), unless otherwise stipulated by the decision of the National Bank or other authorized bodies for a specific bank;  

2) for legal entities residents of the Kyrgyz Republic to carry out fully the operations from the settlement accounts of the legal entities to pay the salary to the employees of this legal entity, to repay the own liabilities of these legal entities to the Social fund, the budget, the utility organizations, the communication operators, the suppliers of the fuel and lubricants in the amount specified in the settlement documents of the service providers (an invoice cum receipt, an invoice), unless otherwise stipulated by the decision of the National Bank or other authorized bodies for a specific bank;  

3) for individuals and legal entities nonresidents of the Kyrgyz Republic, individual and private entrepreneurs residents and nonresidents of the Kyrgyz Republic to carry out the operations within the limits set by the decision of the National Bank or other authorized bodies for a specific bank. 

43. The Provisional Administrator of the bank, in accordance with the decision of the National Bank, can accept payments aimed at repayment of any liabilities by the clients to the bank, except for settlements inside the bank, make conversion from the accounts of the legal entities in order to settle budget payments, social contributions, salary, loans and interests on them, transfer amounts received through the transit accounts opened by the legal entities to the accounts of the banks depositors to pay pensions and salaries. 

44. The Bank can make payments and settlements with the State Customs Service and/or the State Revenue Service under the Government of the Kyrgyz Republic, the state budget as well as the organizations providing the utility services and the communication services based on the decision of the National Bank. 

45. The bank can pay the clients their targeted remittances. The funds can be accepted and transferred through the money transfer systems only based on a relevant decision of the National Bank. 

46. The bank that is in the Provisional Administration regime, within the frameworks of the payment systems using banking payment cards can carry out the operations of cash withdrawal and payment for goods and services of only its clients through its own peripheral devices (ATMs and terminals) and in all its subdivisions. The banking payment cards of the clients from other banks can be accepted and maintained based on a relevant decision of the National Bank. 

47. The Provisional Administrator of the bank cannot make payments of the clients through the international payment systems (Visa, MasterCard, Golden Crown, American Express, Diners Club, etc.) until the National Bank takes a relevant decision. 

48. The Provisional Administrator of the bank shall immediately after receipt of the relevant decision of the National Bank regarding the prohibition to make payments through the international payment systems inform about it the operators of the international payment systems with which relevant agreements for making payments using banking payment cards, money transfers and other banking services are concluded. 

49. The Provisional Administrator of the bank is not allowed to make the transboundary payments through SWIFT, Bank-client systems and use other alternative communication channels until the National Bank takes a relevant decision. 

50. The National Bank can unilaterally without a preliminary notice block the access of the Member in the system of the multi-access unit (MAU) SWIFT if the National Bank takes such a decision. 

Chapter 9. Finality of Payments in the Trade and/or Payment Systems when the Liquidation Procedure of the Bank Starts  

51. The National Bank, when the courts decision comes into force regarding the start of the liquidation procedure with regard to the bank, shall immediately notify about this decision all operators of the payment (the gross settlement system in the real time mode, the batch clearing system of small and regular payments, the national payment system using banking payment cards “Elcard”, the Multi-access unit SWIFT, etc.) and trade systems, the custodian of the GS for timely blocking of the bank in the system as well as inform the banks, the operators of the securities market and the operators of the trading platforms of the Kyrgyz Republic. 

52. In order to make the notification process quicker and to record the time and the date of the relevant information receipt by all concerned addressees, the National Bank shall send a scanned copy of the official notice to the official e-mail addresses of the system operators specified in Clause 51 of the Regulation with further additional sending of the hardcopy notice. 

53. The operators of the payment (the gross settlement system in the real time mode, the batch clearing system of small and regular payments, the national payment system using banking payment cards “Elcard”, the Multi-access unit SWIFT, etc.) and trade systems immediately after receipt of the official notice about the judicial act regarding recognition of the Member as insolvent and initiation of the bankruptcy procedure shall block this Member in their system.  

54. A liquidator of the bank shall immediately inform about the bank liquidation the operators of the international payment systems with which relevant agreements for making payments using the banking payment cards, money transfers and other banking services are concluded. 

55. The instructions of the bank for the transfer of the funds or the securities as well as the instructions of other members for the transfer of the funds or the securities in favor of the bank submitted to the payment or trade systems prior to the receipt of the notice by the operator regarding the bankruptcy process are recognized as irrevocable, have the legal force and are binding for the third parties. In this event the system operators shall complete the transaction and make the final settlement on all above instructions in accordance with the regulatory legal acts of the National Bank. 

56. The instructions of the bank for the transfer of the funds or the securities as well as the instructions of other members for the transfer of the funds or the securities in the favor of the Member submitted to the trade and/or payment system after receipt of the notice by the operator regarding the start of the bankruptcy process shall be recalled, they do not have the legal force and are not binding for the third parties. 

57. The settlements with other members on payments made using the payment systems shall be made by the liquidator of the bank through a special account opened with the other member according to the decision of the National Bank. 

58. If the liquidation of the bank starts where the GS of the clients are placed that have not matured yet, the bank shall transfer the GS of its clients to another bank, except for the GS of the banks clients with regard to which the National Bank has set the restrictions to carry out any operations. The liquidator of the bank shall notify his clients the GS holders that the decision on liquidation of the bank has come into force no later than 2 business days after this decision has come into force and about their right to transfer their own GS to another bank. At that, the client of the liquidated bank shall submit a written application to the problem bank regarding the transfer of the GS to another bank specifying the name of the bank where the GS will be transferred and the lists of the GS issues subject to the transfer to another bank. The responsibility for determination of the list of the problem banks clients the GS holders and receipt of the applications from them shall be taken by the Liquidator of the bank. The GS of the liquidated banks clients are transferred to another bank and the actions of the National Bank are carried out in the same sequence that is used when imposing the Provisional Administration regime taking into account Clauses 59-61 hereof. 

59. If upon maturity of the GS of the banks clients, the Liquidator has not transferred the GS of the clients from the liquidated bank to another bank, the funds of the liquidated banks clients on the redeemed issue or the coupon payments shall be transferred to the account of the National Bank at the maturity date of the GS or the coupon payments. 

60. The transferred funds are on the account of the National Bank until the following documents are received from the liquidated bank: 

1) a petition letter to transfer the clients funds from the account of the National Bank to the account of the client with another bank. The petition letter shall specify: the name/full name of the client, the number of the GS issue, the maturity date of the GS, the number of the redeemed GS, a face value of the redeemed GS, the amount of the coupon payments, the name of the bank where the funds of the redeemed issue are transferred, the number of the clients account and other required information; 

2) copies of the clients written application specifying the details of the account opened with another bank; 

3) confirmation of the bank/the banks branch regarding opening of the account for the client specifying the account number, BIC and the address of the bank. 

61. After receipt of the required documents, the National Bank transfers the funds from the account of the National Bank to the account of the client with another bank specified in the petition letter of the bank and the application of the banks client.