Revised Press Release: The Financial Market of Kazakhstan Proposes a New Banking License for Smaller Institutions
Limiting Deposits for Kazakhstan Residents: ARRF issues declaration
Breaking news from the Press Service of the Agency for Regulation and Development of the Financial Market of Kazakhstan: a fresh initiative is under consideration, aiming to introduce a new type of banking license - the basic license. This licensing move is poised to simplify market entry, promote competition, and boost the presence of smaller financial institutions, including microfinance entities.
The Press Service outlined that this new licensing status will set lower capital requirements and certain operational limitations compared to universal licenses. This licensing change is designed to cater to microfinance institutions (MFIs) and smaller banking entities seeking expansion while benefiting from a streamlined regulatory framework and reduced supervisory oversight.
The legislative conditions for these banks with a basic license can be found in the draft of a new law on banks, according to the Press Service.
Today at a roundtable in the Senate, Deputy Chairman of the ARRRFR, Olzhas Kizatov, announced plans to introduce restrictions on total time and savings deposits for physical persons - limited to 10 million tenge. These restrictions will specifically apply to banks with a basic license, requiring a minimum capital of 10 billion tenge.
Interestingly, Kizatov has also mentioned plans to limit the issuance of loans and loans to certain categories of individuals in Kazakhstan.
Insight: This reform follows financial sector modernization efforts in Kazakhstan, such as introducing Islamic banking windows and cross-border regulatory cooperation.
Aside from the base article, users have weighed in with varying opinions on the proposal. One user, Sarasays: "Why do we need banks that won't provide the full range of banking services because they won't have the necessary license and sufficient capital? There are already too many banks in Kazakhstan."
Another user, Bfg, seems less concerned, sharing: "What are you complaining about? This news won't affect most commentators as they don't have more than 10 million of their own free money."
Others question the purpose and implications of the basic banking license, while still others offer constructive criticism on the lack of transparency and clarity around these regulatory changes.
Discussion: What are your thoughts on this new banking license proposed in Kazakhstan? Will it stimulate competition and support smaller financial institutions, or could it create more hurdles for market entrants and limit depositor options? Join the conversation and share your perspective!
- The new basic banking license proposed in Kazakhstan will reportedly have lower capital requirements and operational limitations compared to universal licenses, catering to microfinance institutions and smaller banking entities.
- Interested parties should take note that the legislative conditions for banks with a basic license can be found in the draft of a new law on banks in Kazakhstan.
- Banks with a basic license will be subject to restrictions on total time and savings deposits for physical persons, limited to 10 million tenge, as well as limitations on the issuance of loans and loans to certain categories of individuals in Kazakhstan.
- Some users have expressed concerns that the new basic banking license could create more hurdles for market entrants, while others argue that it may fail to provide the full range of banking services due to insufficient capital and limited scope.
