Approved by the General Meeting
Approved by
the General Meeting
of Shareholders
of PJSCB "Turkiston"
June 17, 2016
REGULATIONS ON THE BOARD OF THE PRIVATE JOINT-STOCK COMMERCIAL BANK "TURKISTON"
(in the new edition)
Tashkent – 2016
- The general part
1.1.This Regulation establishes the status of the Board of the Private Joint-Stock Commercial Bank Turkiston (the "Bank") and regulates its work, the procedure for appointing members, their rights and obligations.
1.2.The Regulation was developed in accordance with the Laws of the Republic of Uzbekistan "On the Central Bank of the Republic of Uzbekistan", "On Banks and Banking Activities", "On Private Banking Financial Institutions and Guarantees of Their Operations", "On Joint Stock Companies and Protection of Shareholder Rights", Presidential Decree of the Republic of Uzbekistan №UP-4720 dated April 24, 2015 "On measures to introduce modern corporate governance practices in joint-stock companies", the Regulation "On Corporate Governance in Commercial Banks" (registration number 943, July 5, 2000), the Corporate Governance Code approved at The meeting of the Commission on increasing the efficiency of joint-stock companies and the improvement of the corporate governance system of December 31, 2015, Minutes No. 9, the Charter of the Bank and other applicable legislative regulations.
1.3.The Board of the Bank is the collegial executive body of the Bank, manages the current activities of the Bank and is responsible for its results.
1.4.The Board of the Bank is accountable to the General Meeting of Shareholders and the Council of the Bank.
1.5.The Board of the Bank is headed by the Chairman of the Board. The Board includes, in addition to the Chairman, Deputy Chairmen of the Management Board, Chief Accountant of the Bank, Head of the Legal Service, as well as heads of the main structural units (offices) of the Head Office.
- The order of organization of the Bank's Board
2.1.The Board of the Bank establishes the quantitative composition of the Management Board of the Bank based on the principles of the highest level of one person's ability to manage and reduce the management costs. The number of members of the Board of the Bank consists of 5 (five) people.
2.2.Decisions on the quantitative and personal composition of the Board of the Bank shall be made by a simple majority of votes of the total membership of the Council of the Bank elected at the General Meeting of Shareholders.
2.3.Former members of the Board may be appointed by the Council of the Bank to the new Board unlimited number of times.
2.4.Appointment of the members of the Management Board: Candidates for the Chairmen of the Board, its deputies and the Chief Accountant of the Bank are carried out by the Bank's Board after preliminary coordination with the Central Bank of the Republic of Uzbekistan. Other members of the Board are appointed by the Council of the Bank from among the heads of other structural divisions of the Bank or from the staff of highly qualified specialists on the recommendation of the Chairman of the Board in coordination with the Central Bank of the Republic of Uzbekistan. As a rule, candidates must have at least 3 (three) years of experience in the banking system.
2.5.The consideration by the Council of the Bank of candidates to the members of the Board is carried out on an individual basis with the participation of the candidate. A candidate for membership in the Board of the Bank shall disclose to the members of the Management Board of the Bank information in his / her autobiography, which may prevent him from holding the position of a member of the Board of the Bank.
2.6.Candidates for members of the Board of the Bank must comply with the requirements for executives of commercial banks, as required by the Central Bank of the Republic of Uzbekistan.
2.7.The following persons are not appointed to the Management Board of the Bank:
Not having a higher education;
Who have no knowledge of banking and economic legislation at a sufficient level;
Convicted or previously convicted for their willful crimes;
Heads of previously bankrupt legal entities.
2.8.The Chairman of the Board of the Bank, when nominating a candidate for the Board of the Bank, informs the Council about the conditions for concluding an agreement, on awarding the activities of the management and the consent of the candidate, confirmed by his application for concluding an agreement.
The Chairman of the Board or the person authorized by the Council shall sign the contract with the Chairman of the Board on behalf of the Bank. An employment contract with the Deputy Chairman and members of the Board on behalf of the bank is signed by the Chairman of the Management Board.
The contract with the Chairman of the Board and the members of the Board is concluded on the basis of a resolution of the General Meeting of Shareholders for a period of one (1) year. Annually, the General Meeting of Shareholders makes a decision on the possibility of extending the term of the contract and (renewal) or its termination (cancellation).
The signed agreement should provide for the duties of appointed officials to improve the efficiency of the Bank's activities and the frequency of their reports to the General Meeting of Shareholders.
2.9.The members of the Board act within the scope of the powers specified in the job description, the terms of the employment contracts concluded with them, the decisions of the General Meeting of Shareholders, the Board and the Council of the Bank, as well as the instructions of the head of the Board.
Material stimulation of the head and members of the Board is carried out depending on the effectiveness of the Bank's activities.
2.10.Candidates for members of the Board may, at consideration of their candidacies, attend the General meeting of shareholders or at a meeting of the Council of the Bank.
2.11.The Council of the Bank has the right to terminate (cancel) the contract concluded with the members of the Board or the manager ahead of schedule if, at the time of conclusion of the contract, they have committed a gross violation of the Bank's Charter or as a result of their actions (omissions) Bank faced a damage.
2.12.For violation of the Charter, as well as the terms of the contract, the member of the Board, simultaneously with the cancellation of the contract, may be recalled from his position. The decision to withdraw a member of the Board of the Bank and to annul the agreement concluded with it is adopted by the Bank Council by a majority vote.
2.13.The Chairman of the Board of the Bank has the right to temporarily appoint a specialist to perform the duties of a vacant position in the Board of the Bank before the next meeting of the Bank's Board.
2.14.The Chairman of the Board of the Bank has the right to make proposals on including additional candidates to the Board or to reduce its number due to changes in the Bank's activities and other situations, as well as on the withdrawal of certain members from the Board.
2.15.Exemption from the office of a member of the Board of the Bank is carried out by the Council of the Bank in the following cases:
At voluntary resignation of the powers;
If the member of the Board of the Bank fails to perform his powers and duties set out in this Regulation;
Upon receipt of the relevant instruction from the Central Bank;
When receiving information about bringing to criminal responsibility for willful crimes;
At concealment of information specified in Clause 2.7 of this Regulation in the process of concluding an agreement with the Bank to fulfill the duties of a member of the Board.
At the same time, a careful and objective examination of the claims against the member of the Board must be ensured.
- Powers of the Bank's Board
3.1.The powers of the Board of the Bank include all matters related to the management of the Bank's day-to-day operations, with the exception of matters attributed to the exclusive powers of the General Meeting of Shareholders or the powers of the Bank's Council. The Board acts on the basis of the Bank's Charter and organizes the implementation of decisions taken at the General Meeting of Shareholders and the Council of the Bank.
3.2.The duties of the Bank's Management Board include the following:
Compliance with laws of the Republic of Uzbekistan, execution of decrees of the President of the Republic of Uzbekistan, resolutions and orders of the Cabinet of Ministers, decisions and regulations of the Central Bank;
The organization of work to meet the needs of customers for the reliable placement of customer funds, the issuance of loans, the implementation of payments and other banking services;
Receiving stable profits from the banking operations in the maximum amount;
Accounting and reporting at the proper level;
The observance of the procedure of credit documentation;
Classification of bank assets and creation of a commensurate reserve against possible losses on assets;
Creation of conditions for the functioning of the internal audit system, compliance of internal audit with the volume and complexity of the Bank's operations.
3.3.The Board shall take the following decisions on the following issues and submit them to the Council of the Bank for consideration, approval or agreement:
Crediting, asset and liability management, investment and providing new types of services to clients, the Bank's policy guidelines for the Bank's development strategy;
Credit policy of the bank for a period of up to one year;
Measures to increase or decrease the authorized capital;
Proposals on introducing amendments and additions to the Charter of the Bank;
Determination of the maximum amount of announced shares;
Projects on reorganization of the Bank;
Annual reports of the Bank, balance sheets, profit and loss statements, the order of distribution of profits and coverage of losses;
Reports on the Bank's expenses and their comparison with the Business Plan;
The volume of annual and interim dividends on shares and offers on the procedure for their payment;
Redemption of own shares (as agreed with the Central Bank), splitting and consolidating shares to decide on not using the preemptive right of shareholders when purchasing securities exchanged for shares (in cases of their public offering by subscription), as well as on the duration of such a decision;
Selection of the external auditor of the Bank and the amount of payment for services;
Convocation of annual and extraordinary general meetings of shareholders of the Bank;
Issue of bonds and other debt obligations of the Bank;
Assessment of the market value of the Bank's property (including when the property is pledged);
Use of reserve and other funds of the Bank;
write-off from the Bank's balance sheet bad debts of customers and other banks;
Draft amendments and additions to the Regulations on the General Meeting of Shareholders, on the Council and the Board of the Bank, based on legislation and regulations;
The draft Regulation on internal audit of the Bank;
Proposals on the candidacy of the head of the internal audit service;
Use after one year from the date of acquisition by the bank of immovable property included in the category of other real estate under the regulatory documents of the Central Bank;
Development and implementation of policies and processes aimed at assessing property transferred to other real estate;
Development of the Bank's investment policy;
Development of the Issuing policy of the Bank;
Creation, reorganization or liquidation of branches, opening of representative offices of the Bank, draft provisions on branches;
Creation of subsidiary banks and dependent business entities;
The definition of specific criteria for classifying information as a secret, commercial secret and other information capable of affecting the change in stock prices, in order to ensure openness of activities;
Ensuring the publication of information to be disclosed on the Bank's website and other sources provided for by law, together with translations into English, Russian and other languages, convenient for shareholders and other interested parties, including foreign investors;
Disclosure of the sizes of premiums and compensations of the executive body at the general meeting of shareholders;
Simplification of contacting shareholders with the Bank, indicating the address for sending written and electronic requests to the Bank's website, including for sending information about changes in contact information and bank details of shareholders;
The creation of a working group on the transition to the publication of annual financial statements of the bank in accordance with IFRS in the composition of the Internal Audit Commission, the Internal Audit Service, the members of the supervisory commission, the responsible officials of the Bank and the experts involved, if necessary;
Involvement of an audit or consulting organization to provide qualified services in the transition to the publication of annual financial statements in accordance with IFRS and on the basis of international audit standards;
Conduct an independent evaluation of the corporate governance system at the Bank once a year on the basis of a questionnaire approved by the State Committee of the Republic of Uzbekistan on Competition and the Scientific and Educational Center for Corporate Governance.
3.4.In order to preserve the Bank's capital and ensure its compliance with the volume of banking operations and the level of risk, the Board implements the following measures to capitalize the Bank:
Creation of subsidiary banks and dependent companies;
Creation of special reserves against possible losses in the amount established by the Central Bank of the Republic of Uzbekistan;
Ensuring a level of banking risk that does not exceed the level set by the Central Bank;
Placement of the Bank's shares in accordance with the established procedure;
Maintenance of capital and general reserve of the Bankon sufficient level.
3.5.The Board prepares and introduces a draft business plan for the Bank's development for approval to the Board of the Bank (independently, as well as with the involvement of consultants and external experts). The draft business plan reflects the following:
Policy of deciding on lending;
The order of credit control;
Management of liabilities and assets structure;
The procedure for investing;
Financial plan.
The Board ensures the implementation of the approved business plan and reports quarterly to the Council of the Bank on its implementation.
The Bank's business plan on development is reviewed once a year to make the necessary changes and additions.
3.6.The Board submits comments to the Board of the Bank once a quarter, written reports on the financial situation of the bank, including taking into account recommendations for their improvement. In particular, special attention is paid to the following financial ratios:
Income on ordinary shares;
The amount of the total interest margin;
Expenses of the bank on assets not related to interest payments;
Share of doubtful and unreliable loans in relation to all loans;
The share of loans written-off in relation to all loans;
The amount of large loans;
Loans to persons related to the Bank.
3.7.Rights of the Bank's Board:
Implementation of operations provided for by licenses of the Central Bank of the Republic of Uzbekistan;
Management of property and capital of the Bank;
The management of the activities of structural divisions of the Head Office, branches, divisions and structural subdivisions of representative offices;
Acceptance and consideration of complaints and proposals of shareholders and customers on unlawful actions of employees of the structural divisions of the Head Office, branches, divisions and representative offices;
Consideration of the results of financial and commercial activities throughout the Bank, its branches and activity directions;
Making decisions on attracting deposits, placing assets, lending, settlements, money circulation, providing cash services, foreign economic activity, signing interbank agreements;
Development and introduction of new types of banking services;
Reviewing reports on audit reviews, audits, and reports of the Bank's structural divisions and making decisions on them;
Regulation of interest rates of operations on assets and liabilities taking into account the interests of the Bank and customers;
Definition of general conditions and procedure for execution of obligations, provision of credit and settlement services, cash and payment documents and correspondence;
Development and approval of the Bank's Liquidity Management Policy;
Development and implementation of statistical reporting for institutions subordinated to the bank after agreement with the Central Bank and state statistical bodies;
Approval of the terms of issue, circulation and redemption of the Bank's bills, their submitting to the Central Bank for registration;
Approval of regulations on the Operations Department, other structural divisions of the Head Office, representative offices and divisions;
Taking decisions on the bank's participation, protecting its interests and implementing joint programs in associations and others organized to coordinate the activities of the bank;
Taking decisions on the Bank's participation in the establishment of other Banks, joint-stock companies, joint ventures, other economic entities that ensure an increase in the profitability of investments and active operations;
Exercise of the powers of the Bank and protection of its interests in subsidiary banks, joint-stock companies, joint ventures and other economic entities in which the Bank's capital is invested;
Appointment of heads of branches in coordination with the Central Bank of the Republic of Uzbekistan and the Council of the Bank;
Determination of the procedure for appointing heads of missions, branches, offices, divisions of the head office, branches of the bank, selection, training and use of employees, bringing officials to disciplinary responsibility;
The definition of a list of information that is a banking and commercial secret;
Determination of the organizational structure of the Head Office and branches, approval of the official staffing table of the Head Office and branches;
Consideration of sponsorship and charitable assistance in consultation with the Council of the Bank;
Consideration and resolution of other issues related to the activities of the Bank not included in the powers of the General Meeting of Shareholders and the Council of the Bank.
3.8.The Board of the Bank may decide to conclude the following transactions: