Kyrgyzstan drafts law to create state-owned Industrial Development Bank

Kyrgyzstan's Ministry of Economy has drafted a law "On the Industrial Development Bank of the Kyrgyz Republic" and opened it to public discussion. The draft provides for a specialised state institution that would provide long-term financing to enterprises and support technological modernisation of industry.

The bank would be set up as an open joint-stock company with 100% state ownership, and the cabinet of ministers would exercise the shareholder's powers on behalf of the republic. Under the bill, the bank would not be subject to the general requirements of the law on banks and banking activity. It would not need a licence from the National Bank, and the regulator would not conduct prudential supervision over it. The bank would be barred from taking deposits from individuals, serving the public, and engaging in activities unrelated to industrial development.

Financing decisions would be based on independent expertise, and the bank's effectiveness would be assessed by its contribution to the economy, including private investment, new production capacity, industrial exports, import substitution and new jobs. Kyrgyzstan already has a State Development Bank, which operates under a separate law and also works without a National Bank licence.