The Agency for Regulation and Development of the Financial Market of the Republic of Kazakhstan has explained the bank insolvency framework introduced in January 2026 under the new banking law and supporting regulations. The framework establishes escalating intervention stages as a bank’s condition deteriorates, moving from enhanced supervision to recovery and, if recovery is not viable, resolution designed to preserve critical functions and financial stability. All banks must prepare recovery plans, agree them with the Agency and update them annually. The Agency will prepare resolution plans for systemically important banks and, where necessary, other banks. It may conduct a viability assessment when a bank’s financial condition deteriorates or recovery measures are ineffective, leading either to further recovery action or a declaration of insolvency and use of resolution tools. Losses must first be absorbed by shareholder capital and the bank’s debt instruments, while guaranteed individual deposits remain fully protected and cannot be used to cover losses. Resolution tools include transferring assets and liabilities to another bank, establishing a bridge bank, applying bail-in, selling the bank to a new investor or, where these options are unavailable, withdrawing its license and liquidating it. Systemically important banks will phase in total loss-absorbing capacity requirements from 13% of risk-weighted assets in 2027 to 18% by 2032. State support is reserved as a last resort for a large systemically important bank after equity and TLAC resources are exhausted, with any unrecovered public costs covered through mandatory banking-sector contributions.

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