Deposit Protection Agency of the Kyrgyz Republic
The Deposit Protection Agency of the Kyrgyz Republic, its mandate, tasks, and functions
The deposit protection system in the Kyrgyz Republic is aimed at protecting depositors of banks, microfinance companies, and housing and savings credit companies upon the occurrence of a guarantee event by providing reimbursement in the amount and ways stipulated by the Law of the Kyrgyz Republic “On Protection of Bank Deposits”, as well as at fostering stability in the banking system as a whole.
The Deposit Protection Agency of the Kyrgyz Republic operates to ensure the effectiveness of the deposit protection system in the Kyrgyz Republic.
The Agency is a legal entity — an independent non-profit organization with operational management rights, which does not pursue profit, and is vested with powers, rights, and duties established by the Law of the Kyrgyz Republic “On Protection of Bank Deposits” and the Regulation “On the Deposit Protection Agency of the Kyrgyz Republic”. The independence of the Agency means independence in decision-making and budget formation.
The legal status of the Agency is defined by the Law of the Kyrgyz Republic “On Protection of Bank Deposits” (hereinafter – the Law).
The main task of the Agency is to ensure the operation of the deposit protection system in the Kyrgyz Republic. To fulfill this task, the Agency manages the assets of the Deposit Protection Fund, reimburses depositors the amounts of deposits and interest on them upon the occurrence of an insured event.
To implement its tasks, the Agency performs the following functions:
- maintains registers of participating banks, microfinance companies, and housing and savings credit companies;
- accounts for depositors’ claims, amounts due for payment, and amounts of reimbursement already paid on deposits;
- pays depositors falling under the Law the amount determined by the Law;
- calculates and collects premiums to the Deposit Protection Fund;
- performs necessary actions ensuring timely and full payment of premiums;
- imposes fines and penalties for late payment of premiums;
- manages the assets of the Deposit Protection Fund as prescribed by the Law;
- interacts with government authorities and other organizations;
- selects agent banks to ensure the reimbursement;
- ensures recovery of payouts made from the Deposit Protection Fund at the expense of liquidated banks, microfinance companies, and housing and savings credit companies in accordance with the Law;
- conducts activities to raise public awareness of the deposit protection system;
- performs other functions, powers, and rights necessary for the effective operation of the mandatory deposit protection system, as stipulated by regulations approved by the Government of the Kyrgyz Republic.
The Agency manages the assets of the Deposit Protection Fund, which is formed from the initial contribution of the Cabinet of Ministers (Government) of the Kyrgyz Republic, regular contributions of participants of the deposit protection system, interest and investment income received by the Agency.
According to the Law of the Kyrgyz Republic “On Protection of Bank Deposits”, membership in the deposit protection system is mandatory for all resident banks, all branches of foreign banks located in the Kyrgyz Republic, as well as for microfinance companies and housing and savings credit companies holding a corresponding license from the National Bank of the Kyrgyz Republic to accept deposits.
