Article 109. Permission of the authorized body to convert the bank into an Islamic bank of the Law on Banks and Banking Activities in the Republic Kazakhstan

Home / Laws / Article 109. Permission of the authorized body to convert the bank into an Islamic bank of the Law on Banks and Banking Activities in the Republic Kazakhstan

1. The bank's conversion into an Islamic bank is carried out by decision of the general meeting of shareholders of the bank with the permission of the authorized body.

The procedure for issuing a permit from the authorized body for the conversion of a bank into an Islamic bank and for refusing to issue a permit is determined by this Law and a regulatory legal act of the authorized body.

2. The following documents are attached to the application for permission from the authorized body to convert the bank into an Islamic bank:

1) the decision of the general meeting of shareholders of the bank, which decided to convert the bank into an Islamic bank;

2) an action plan for converting the bank into an Islamic bank that meets the requirements of Article 110 of this Law;

3) a copy of the strategy for the development of Islamic banking operations for the next three years, which meets the requirements of the authorized body for the risk management and internal control system;

4) a plan to restore financial stability.

3. The application is considered by the authorized body within sixty working days from the date of submission by the applicant of the documents specified in paragraph 2 of this Article.

If the bank submits an incomplete package of documents specified in paragraph 2 of this article, the authorized body shall give a reasoned refusal to further consider the application within fifteen calendar days from the date of receipt of the documents.

4. The Bank has the right to withdraw an application for permission from the authorized body to convert the bank into an Islamic bank before the authorized body decides to grant or refuse to grant permission to convert the bank into an Islamic bank by submitting a written application in any form.

5. The grounds for refusal to grant permission to convert a bank into an Islamic bank are:

1) failure to eliminate the comments of the authorized body on the submitted documents within the time limit set by it;

2) the non-compliance of the action plan for the conversion of the bank into an Islamic bank with the requirements provided for in Article 110 of this Law;

3) non-compliance of the strategy for the development of Islamic banking operations with the requirements of the authorized body for the risk management and internal control system;

4) the financial forecast of the consequences of the bank's conversion into an Islamic bank assumes a deterioration in the financial condition of the bank as a result of the bank's conversion into an Islamic bank;

5) violation by the bank and (or) the banking conglomerate of prudential standards and (or) limits and (or) the presence of an administrative penalty for an administrative offense provided for in parts six and eight of Article 213, Article 227 of the Code of the Republic of Kazakhstan on Administrative Offenses during three consecutive calendar months preceding the date of filing the application for extradition permissions to convert a bank into an Islamic bank;

6) violation of the legitimate interests of depositors and other creditors of the bank as a result of the proposed conversion of the bank into an Islamic bank.

6. The authorized body is obliged, within the time period established by the first part of paragraph 3 of this article, to issue a permit for the conversion of the bank into an Islamic bank or to give a reasoned refusal to issue this permit.

7. The authorized body revokes the issued permission to convert the bank into an Islamic bank in the following cases::

1) identification of false information on the basis of which the permit was issued;

2) adoption by the bank of a decision on voluntary termination of its activities through reorganization in other forms or liquidation, or adoption by a court of a decision on termination of the bank's activities;

3) the bank's failure to comply with the requirements or violation of the deadlines for fulfilling the requirements provided for in Article 111 of this Law;

4) refusal to issue a license to the bank to carry out Islamic banking and other operations.

The Bank has the right to voluntarily waive the permission granted to it to convert the bank into an Islamic bank by returning the permission to convert the bank into an Islamic bank to the authorized body.

If the permission to convert the bank into an Islamic bank is revoked or the bank voluntarily refuses the permission granted to it to convert the bank into an Islamic bank, the authorized body decides to revoke the previously issued permission within two months from the date of discovery of the fact that is the basis for revoking the permission, or the day the permission is returned.

The Law of the Republic of Kazakhstan dated January 16, 2026 No. 258-VIII SAM.

President

Republic of Kazakhstan

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