A draft new Law on Banks and Banking Activity under parliamentary review would overhaul the Agency for Regulation and Development of the Financial Market of the Republic of Kazakhstan’s regulatory and crisis-management framework for banks, according to an assessment by Dentons partner Vasily Zenov. The package is presented as a broad reform aimed at strengthening financial stability, supporting competition, and aligning with advanced international standards. Key elements described include reforms to the licensing regime and a shift to proportionate regulation that takes account of a bank’s scope, business model features, and risk profile. The bill also tightens corporate governance expectations, including stronger requirements for independent directors, and proposes stronger consumer protection through a comprehensive conduct supervision system aimed at preventing unfair practices and increasing financial institutions’ accountability to clients. Other strands cover digitisation and deployment of fintech solutions, as well as further development of Islamic finance by allowing conventional banks to offer “Islamic windows”. For bank distress, the draft sets out a modern three-tier framework ranging from enhanced supervision and recovery measures through to full resolution procedures, with shareholders and unsecured creditors expected to absorb losses first. It also embeds a “minimal state participation” principle, limiting public support to systemically important banks where wider financial stability is at risk, and envisages that any state outlays would be recouped via future contributions from the banking sector, with the approach described as consistent with the Financial Stability Board’s Key Attributes.

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