Deposit Insurance Legislation of the Kyrgyz Republic
Legal Framework of the Deposit Protection System
The legal basis for the regulation and organization of the deposit protection system in the Kyrgyz Republic, as well as the activities of the Agency, is the Law of the Kyrgyz Republic “On Protection of Bank Deposits”, aimed at creating legal norms for the operation of the mandatory protection system for deposits of individuals and individual entrepreneurs in banks, microfinance companies, and housing and savings credit companies of the Kyrgyz Republic.
The Law of the Kyrgyz Republic “On Protection of Bank Deposits” defines the legal foundations for the formation, administration, and financing of the deposit protection system, and the establishment and operation of the independent Deposit Protection Agency of the Kyrgyz Republic.
To implement the norms of the aforementioned Law, the following subordinate regulatory acts are in effect:
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Regulation “On the Procedure for Calculation of Contributions to the Deposit Protection Fund”, approved by Resolution of the Government of the Kyrgyz Republic No. 687 dated December 11, 2008;
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Instruction “On the Reporting Form of a Participant Bank of the Deposit Protection System Submitted to the Deposit Protection Agency of the Kyrgyz Republic”, approved by Resolution of the Government of the Kyrgyz Republic No. 297 dated November 25, 2010;
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Regulation “On the Procedure for Selection of Agent Banks for Reimbursement of Depositors in the Payout Event”, approved by Resolution of the Government of the Kyrgyz Republic No. 298 dated November 25, 2010;
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Regulation “On Granting a Loan to the Deposit Protection Agency of the Kyrgyz Republic”, approved by Resolution of the Board of the National Bank of the Kyrgyz Republic dated August 15, 2018;
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Instruction on Maintaining a Database on Obligations of a Bank, Housing and Savings Credit Company, Microfinance Company Attracting Deposits to Depositors, approved by Resolution of the Board of the National Bank of the Kyrgyz Republic No. 2022-P-12/35-1-(NPA) dated June 2, 2022.
In pursuance of the National Development Program of the Kyrgyz Republic until 2026, the Agency developed and adopted the Law of the Kyrgyz Republic “On Amendments to the Law of the Kyrgyz Republic ‘On Protection of Bank Deposits'” No. 107 dated May 23, 2023, providing for an increase in the coverage limit on deposits to depositors of banks, microfinance companies, and housing and savings credit companies from 200 thousand soms to 1 million soms.
In order to improve the efficiency of the deposit protection system, as well as to implement the Decree of the President of the Kyrgyz Republic “On Reorganization of the Deposit Protection Agency of the Kyrgyz Republic with the Assignment of Functions for Liquidation of Banks and Other Financial and Credit Organizations and Consideration of Appeals from Problem Borrowers” No. 281 dated August 10, 2022, the Agency developed and adopted the Law of the Kyrgyz Republic “On Amendments to the Law of the Kyrgyz Republic ‘On Protection of Bank Deposits'” No. 207 dated December 14, 2023, which provides for:
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inclusion of electronic money issued by a bank, held by individuals and individual entrepreneurs, in the definition of a deposit;
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revocation of a license by the National Bank defined as a payout event to improve processes for ensuring prompt reimbursement of depositors;
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introduction of changes to the Agency’s management system, establishment of a collegial executive body, and subordination of risk management, internal audit, and corporate secretary services to the Board of Directors;
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inclusion of liquidation of banks and financial and credit organizations, as well as consideration of appeals from problem borrowers, in the powers and functions of the Agency.
Internal local regulatory legal acts issued and adopted by the Agency’s management bodies play a significant role in creating the legal foundations for organizing the mandatory protection of deposits of depositors in banks, microfinance companies, and housing and savings credit companies, as well as the Agency’s activities.
In order to improve the most important internal local regulatory legal acts of the Agency, in 2023, an inventory of 49 internal regulatory legal acts of the Agency was carried out for their compliance with the Law of the Kyrgyz Republic “On Protection of Bank Deposits” and other regulatory legal acts of the Kyrgyz Republic.
