The Agency for Regulation and Development of the Financial Market of the Republic of Kazakhstan held a roundtable to discuss a draft new law on banks, developed jointly with the National Bank of Kazakhstan, aimed at overhauling the existing banking framework and updating rules to reflect shifts in business models, digital services and market entry. The draft is structured around seven pillars. Key elements include modernising licensing through a new basic banking licence with limits on asset size and reduced entry and supervisory requirements, including minimum capital of up to KZT 10 bn, alongside prohibitions on certain high-risk operations and related-party transactions. It also envisages tighter requirements for non-bank organisations providing financial services to the public and measures to support Islamic banking. A new conduct supervision framework would strengthen consumer protection through end-to-end product governance covering design, advertising, distribution and monitoring. For distressed banks, the proposal introduces a three-stage regime spanning enhanced supervision, a recovery phase with stabilisation measures, and resolution for insolvent banks including temporary administration and an assessment of viability, with state support to be minimised and limited to exceptional cases involving systemically important banks. Other proposals include expanding macroprudential tools and tightening governance and related-party standards drawing on the 2023 IMF and World Bank Financial Sector Assessment Program findings, measures to stimulate lending to the real economy such as syndicated lending, an SME guarantee fund and factoring, streamlining the structure of banking legislation, and a legal and technical foundation for national digital financial infrastructure. The draft law is scheduled to be released for public discussion in April, with submission to the Mazhilis of Parliament planned for August 2025.

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