In a Forbes.kz interview, the Agency for Regulation and Development of the Financial Market of the Republic of Kazakhstan’s First Deputy Chair, Timur Abilkasymov, explained how the new law on banks and banking activity establishes a modern regime for dealing with insolvent banks, aligned with international standards while reflecting national market features. The reform is framed around protecting depositors, reducing systemic risk and minimising the use of budget funds in crisis situations by placing primary responsibility for restoring a bank’s viability on its shareholders. The law strengthens early intervention by expanding the regulator’s tools when problems first emerge, increasing supervisory intensity as indicators deteriorate and requiring banks to take corrective actions. Each bank must have a recovery plan agreed with the regulator that sets out shareholder and management measures to restore financial soundness, with the resolution mechanism triggered to protect depositors if commitments are not met. For systemically important banks, capital requirements have been tightened through total loss-absorbing capacity (TLAC), alongside revised corporate governance expectations for more active, competent boards and additional requirements for senior management’s experience, qualifications and risk understanding; the Agency also plans to broaden the use of “motivated judgement” within risk-based supervision. A further element is a mechanism under which banks would reimburse, on a proportional basis, actual state losses incurred in resolving a systemically important bank, with the state’s involvement described as limited to exceptional cases and only for that category of banks. Abilkasymov positioned the approach as consistent with frameworks used in jurisdictions including the European Union, the United Kingdom, South Korea and Canada, drawing on G20 and Basel Committee principles and consultations with international organisations and foreign regulators, including the International Monetary Fund, European Central Bank, World Bank and European Bank for Reconstruction and Development.

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