Kazakhstan’s New Law Aims to Revamp Banking Sector

Overview

Astana, Kazakhstan - The government of Kazakhstan has introduced a new law aimed at revamping the country’s banking sector. The law grants special powers to organizations specializing in improving the quality of loan portfolios of second-tier banks.

Key Provisions

The law allows these organizations to:

Reacquire shares and bonds: Reacquire shares and bonds previously issued by banks
Conduct assessments: Conduct assessments of asset quality and rights of claims held by banks and former banks
Acquire doubtful assets: Acquire doubtful and bad assets from national banks and other financial institutions
Manage and sell off assets: Manage and sell off acquired assets, including transferring them into trust management or ownership
Provide property hiring services: Provide property hiring services for acquired properties
Perform operations on securitization: Perform operations on securitization of rights of claims and other assets
Create new organizations: Create new organizations to acquire doubtful and hopeless assets
Acquire shares and stakes: Acquire shares and stakes in authorized capital of legal entities
Place money in securities: Place money in securities, financial instruments, and bank accounts

Restructuring Debt

The law also grants these organizations the right to:

Restructure debt: Restructure debt on acquired assets
Write off or cancel debt: Write off or cancel part of the principal debt
Manage and sell off assets: Manage and sell off assets

In certain cases, the consent of borrowers, pledgers, guarantors, and other parties will not be required for the transfer of rights and claims.

Goals and Benefits

The law aims to improve the overall health of Kazakhstan’s banking sector by allowing organizations to take on troubled assets and restructure debt. The new law is expected to benefit both banks and borrowers, as well as the economy as a whole.

Kazakhstan Cracks Down on Unlicensed Banking Activities

Stricter Regulations

Article 6 of the same law introduces stricter regulations on non-authorized banking activities. According to the article, no person or entity without an appropriate license from the National Bank of Kazakhstan or authorized body can engage in:

Banking transactions: Banking transactions
Issuance and placement of securities: Issuance and placement of securities
Conducting banking operations: Conducting banking operations

Goal

The law aims to prevent unauthorized financial activities and protect the country’s financial system.

Stay tuned for further updates on this developing story.