OREANDA-NEWS. August 25, 2009. Kyrgyz Investment and Credit Bank [KICB] was entered into the List of Participant-Banks of the Deposit Insurance System with registration number 21/09, reported the press-centre of KICB.

Henceforth, every depositor with funds in a KICB account is provided with reliable protection from the Government of the Kyrgyz Republic. This new status accorded to the bank assures clients that their deposits are more secure to the order and amount prescribed by the legislation. In short, deposits of KICB clients are GUARANTEED.

The Kyrgyz Republic’s Act "On the insurance of bank deposits" came into force on August 12, 2009.  In accordance with this Act, a Deposit Insurance Fund, managed by the Deposit Protection Agency of the Kyrgyz Republic, was founded from contributions provided by commercial banks. The Fund was formed with the participation of the Kyrgyz Government and commercial banks in the Kyrgyz Republic, 76% and 24% respectively. Resident banks and foreign bank branches located in the Kyrgyz Republic are responsible for making contributions to the Fund so that deposits remain protected to the order and amount prescribed. The Government of the Kyrgyz Republic, through the Ministry of Finance of the Kyrgyz Republic, concluded an agreement with Participant-Banks of the Deposit Insurance System on the liability of the Parliament of the Kyrgyz Republic.

The main purpose of the newly-created Deposit Protection Agency is to administer Deposit Insurance Fund. The Agency manages the Deposit Insurance Fund’s assets, and repays deposit and interest amounts for valid guarantee cases in accordance with the Law "On Insurance of bank deposits”.

Establishment of a Deposit Insurance System for a country’s population is increasingly recognized worldwide as a necessary and effective tool in maintaining the stability of the banking sector. Varying forms of the Deposit Insurance System currently exist in more than 100 countries around the world.

Kyrgyz Investment and Credit Bank (KICB) was established in January 2001 with a paid-in share capital of USD 7 million. In 2007, shareholders of the Bank and Habib Bank Limited (HBL, Pakistan) signed a new Shareholders Agreement, effectively bringing HBL onboard as a strategic investor and increasing the share capital from USD 7 million to USD 10 million. Capital increase was completed on 31st December, 2007.

The Bank’s shareholding structure is as follows: Kyrgyz Republic [10%], Aga Khan Fund for Economic Development (AKFED) [21%], Habib Bank LTD [18%], Deutsche Investitions und Entwicklungsgesellschaft GmbH (DEG) [17%], European Bank for Reconstruction and Development (EBRD) [17%], and International Finance Corporation (IFC) [17%]. Although KfW is not a shareholder of KICB, it counts itself as one of the Bank’s founding members. The credit lines it has extended have been vital to KICB’s continued growth and success.