Three Banks in Kazakhstan Face Closure Risk

    The chairman of the Financial Supervision Agency of Kazakhstan, Elena Bakhmutova, has said in an interview in the Parliamentary Senate of Kazakhstan that three banks in Kazakhstan are at risk of closing.
    "These banks have filed documents stating that they have potential strategic investors, but this doesn’t mean that these investors will meet the requirements of the regulator and that they are able to become investors. Therefore, these banks remain at risk of closure," she pointed out.
    Bakhmutova also made reference to the requirement which came into force last year for improving the standards of equity of credit institutions. "From October 1, the absolute minimum amount of equity capital of a bank should be KZT 5 billion (USD 33.1 million). There are some exceptions for banks that operate in the regions and are not registered in Almaty or Astana. These banks face a minimum capital requirement of KZT 2 billion (USD 13.3 million). However, they must fulfil certain conditions to be eligible," said the head of the FSA.
    According to Bakhmutova, banks that don’t comply with these rules fall into the risk zone. At the same time, she said that they do not necessarily have to be closed. The FSA will impose sanctions and other measures on these banks.
    There are 37 commercial banks in Kazakhstan and during the first seven months of the year, their combined net loss amounted to KZT 2.4 trillion (USD 15.7 billion). In July, issued loans fell by 0.7 percent from June. The proportion of bad debts amounted to 25 percent, Kazakhstan Today reports.