Article 11-1. Subsidiaries of banks and bank holding companies and significant participation of banks and bank holding companies in the capital of the Law on Banks and Banking Activities in the Republic of Kazakhstan
1. In order to exercise the powers granted to them by Article 8 of this Law, a bank and a bank holding company may establish or have a subsidiary organization only with the prior permission of the authorized body.
The requirement to obtain permission from an authorized body to establish or acquire a subsidiary does not apply to bank holding companies that indirectly own (have the ability to vote, determine decisions and (or) influence decisions made by virtue of an agreement or otherwise) shares or stakes in the authorized capital of this organization through ownership (having the ability to vote, determine to make decisions and (or) influence decisions made by virtue of an agreement or otherwise) by shares of a bank resident in the Republic of Kazakhstan, who directly owns (has the ability to vote, determine decisions and (or) influence decisions made by virtue of a contract or otherwise) shares or stakes in the authorized capital of the specified organization and has the appropriate permission from the authorized body.
The requirement to obtain permission from the authorized body to establish or acquire a subsidiary does not apply to the bank holding companies specified in subparagraph 2) of paragraph 13 of Article 8 of this Law. These bank holding companies are required to notify the authorized body of the establishment or acquisition of a subsidiary within fourteen working days from the date of state registration of the legal entity in the case of the establishment of a subsidiary or the acquisition of shares in the authorized capital or voting shares of the subsidiary.
The requirement to obtain permission from an authorized body to establish or acquire a subsidiary does not apply to a bank in connection with its acquisition of control over another bank, which has been restructured in accordance with this Law.
The procedure for granting a bank or a bank holding company permission to establish or acquire a subsidiary is determined by a regulatory legal act of the authorized body.
2. Subsidiaries of banks are not entitled to establish and (or) have subsidiaries, as well as to have significant equity participation, except for the creation or participation in the capital of non–resident organizations of the Republic of Kazakhstan engaged in the development, implementation, and support of software used in the activities of financial organizations, including for automation of their activities.
This restriction does not apply to banks that have been restructured in accordance with this Law and whose control has been acquired by another bank, as well as to banks that have carried out the operation provided for in Article 61-4 of this Law and whose control has been acquired by another bank.
The bank's subsidiaries do not include:
1) legal entities whose shares or participation interests in the authorized capital become the property of the bank if they are accepted as collateral in accordance with the civil legislation of the Republic of Kazakhstan and the legislation of a foreign state, subject to the restrictions established by paragraph 7 of Article 8 of this Law;
2) legal entities in whose authorized capital the bank participates through ownership (having the opportunity to vote, determine decisions and (or) influence decisions made by virtue of an agreement or otherwise) of shares or shares in the authorized capital of a subsidiary established (acquired) on the terms defined in Article 11-2 of this Law;
3) legal entities whose shares or participation interests in the authorized capital were acquired by an Islamic bank in the course of a banking operation defined in Article 52-9 of this Law.
3. Subsidiaries of bank holding companies, with the exception of subsidiaries of resident banks of the Republic of Kazakhstan, as well as subsidiaries of bank holding companies specified in subparagraph 2) of paragraph 13 of Article 8 of this Law, are not entitled to establish and (or) have subsidiaries.
3-1. A fee is charged for the issuance of a permit for the establishment, acquisition of a subsidiary and (or) for significant participation in the capital of organizations, the amount and payment procedure of which are determined by the tax legislation of the Republic of Kazakhstan.
4. The following documents must be attached to the application for permission to establish or acquire a subsidiary, submitted in the form prescribed by the regulatory legal act of the authorized body:
1) the founding documents of the subsidiary (for non–resident legal entities of the Republic of Kazakhstan);
2) a decision on the establishment of a subsidiary, in the case of its creation, or a decision on the acquisition of a subsidiary, in the case of its acquisition (in the absence of information on the Internet resource of the financial reporting depository);
3) information about the senior staff of the subsidiary (or candidates recommended for appointment or election to senior positions);
4) information about affiliated companies (if there is no information on the Internet resource of the financial reporting depository).
If the bank does not have a bank holding company, additional information about organizations associated with the subsidiary is provided.:
managing their activities on a joint basis in accordance with the terms of the memorandum or the provisions of the association of these organizations;
if the composition of the executive body, management body (for joint-stock companies), and supervisory board (for limited liability partnerships) of these organizations is represented by more than one third by the same persons.;
5) the business plan of the subsidiary, the requirements for which are determined by the regulatory legal act of the authorized body;
6) information, based on an analysis of the legislation of the country where the subsidiary is located, on the absence of circumstances suggesting the impossibility of consolidated supervision of the banking conglomerate due to the fact that the legislation of the countries where the participants of the banking conglomerate are located, non–residents of the Republic of Kazakhstan, makes it impossible for them and the banking conglomerate to comply with the requirements provided for by legislative acts of the Republic of Kazakhstan;
7) excluded by the Law of the Republic of Kazakhstan dated 25.11.2019 No. 272-VI (effective ten calendar days after the date of its first official publication);
8) financial statements of the acquired subsidiary, certified by an audit organization, for the last completed reporting period;
9) excluded by the Law of the Republic of Kazakhstan dated 25.11.2019 No. 272-VI (effective after ten calendar days after the date of its first official publication); 10) excluded by the Law of the Republic of Kazakhstan dated 25.11.2019 No. 272-VI (effective after ten calendar days after the date of its first official publication);
11) information about a legal entity, through the acquisition of a share in the authorized capital or shares of which the bank and (or) a bank holding company acquires a subsidiary, including:
name and location of the legal entity;
information on the amount of the bank's and (or) bank holding company's share in the authorized capital of a legal entity, the purchase price of which the bank and (or) bank holding company is the founder (participant).;
information on the number of shares, the purchase price, and their percentage of the total number of outstanding shares (excluding preferred and repurchased by the company) of a legal entity of which the bank and (or) a bank holding company are shareholders;
information on the amount of the share of a legal entity (the founder, participant, shareholder of which is a bank and (or) a bank holding company), the purchase price in the authorized capital of another legal entity;
information on the number of shares, the purchase price, and their percentage of the total number of outstanding shares (minus preferred and repurchased by the company) acquired by a legal entity of which the bank and (or) a bank holding company are shareholders (founders, participants).
These requirements apply to the acquisition of a subsidiary by a bank and/or a bank holding company through the acquisition of shares in the authorized capital or shares of several legal entities.;
12) excluded by the Law of the Republic of Kazakhstan dated 07/02/2018 No. 168-VI (effective from 01.01.2019); 13) excluded by the Law of the Republic of Kazakhstan dated 11/25/2019 No. 272-VI (effective ten calendar days after the date of its first official publication);
13-1) a document confirming payment of the permit fee, except in cases of payment through the electronic government payment gateway;
14) other documents on the basis of which it is proposed to acquire control or confirming control over a subsidiary, indicating the basis for control.
5. The Bank and (or) the bank holding company may establish a subsidiary, provided that it breaks even on a consolidated and unconsolidated basis based on the results of each of the last two completed financial years and complies with prudential standards, including on a consolidated basis, established by the authorized body, during the last three months preceding the date of submission of the application to the authorized body. to obtain a permit.
6. The grounds for refusal to grant permission to establish or acquire a subsidiary are:
1) failure to eliminate the comments of the authorized body on the submitted documents;
2) non-compliance of the legislation in the field of consolidated supervision of financial organizations of the country where the subsidiary is being created or acquired with the requirements for consolidated supervision established by the legislative acts of the Republic of Kazakhstan;
3) non-compliance of the subsidiary's senior staff (or candidates recommended for appointment or election to senior positions) with the requirements of sub-paragraphs 3), 4), 5) and 6) of paragraph 3 of Article 20 of this Law;
4) non-compliance with prudential standards by a banking conglomerate, which includes a bank and (or) a bank holding company, as a result of the alleged existence of a subsidiary of the bank and (or) a bank holding company;
5) an analysis of the financial consequences, suggesting a deterioration in the financial condition of the bank, bank holding company or banking conglomerate as a result of the activities of a subsidiary organization or investments planned by the bank and (or) bank holding company;
6) non-compliance of risk management and internal control systems, including with respect to risks related to the activities of a subsidiary, with the requirements of the authorized body for risk management and internal control systems; - Excluded by the Law of the Republic of Kazakhstan dated June 24, 2025 No. 196-VIII SAM
7) non-compliance by the subsidiary with established prudential standards in cases stipulated by the legislation of the country where the subsidiary is located, as well as by the bank and the bank holding company with prudential standards, including on a consolidated basis, and other mandatory standards and limits during the last three months preceding the date of submitting an application to the authorized body for permission, and (or) during the application review period;
8) whether the bank and (or) the bank holding company and (or) the proposed subsidiary have effective supervisory response measures provided for in paragraphs 1), 2), 3), 4), 5), 6), 9) and 14) paragraph 1 of Article 46, Article 47-1 of this Law, and (or) administrative penalties for administrative offenses provided for in parts six, eight of Article 213, Article 227 of the Code of the Republic of Kazakhstan on Administrative Offenses, as of the date of filing the application and during the review of documents;
9) in cases of creation or acquisition by a bank and (or) a bank holding company of a subsidiary organization – a bank, an insurance (reinsurance) organization managing an investment portfolio – residents of the Republic of Kazakhstan – non-compliance with the requirements provided for by this Law, the legislation of the Republic of Kazakhstan on insurance and insurance activities, the securities market regarding the issuance of consent to obtain the status of a bank or an insurance holding company, a major bank participant, an insurance (reinsurance) organization that manages an investment portfolio – residents of the Republic of Kazakhstan;
10) non-compliance by the bank or bank holding company with the requirements established by Articles 8 and 40 of this Law regarding the establishment of subsidiaries of the bank or bank holding company, the acquisition by banks or bank holding companies of shares or participation interests in the authorized capitals of legal entities;
11) unprofitable activities of the bank and (or) the bank holding company on a consolidated and unconsolidated basis based on the results of each of the last two completed financial years preceding the date of submitting an application for permission to establish or acquire a subsidiary to the authorized body.
7. The authorized body is obliged to issue a permit or refuse to issue a permit within fifty working days after submitting the application.
In case of refusal to issue a permit, the authorized body is obliged to notify the applicant in writing about the grounds for refusal.
An application for permission to establish or acquire a subsidiary, submitted as part of obtaining permits to open a bank or for the voluntary reorganization of a microfinance organization in the form of conversion into a bank, is considered by the authorized body within the time limits established for the consideration of applications for the issuance of these permits.
8. A subsidiary of a bank and (or) a bank holding company is obliged to notify the authorized body within thirty calendar days of all changes and additions made to the constituent documents.
9. A subsidiary of a bank and (or) a bank holding company that is a non–resident of the Republic of Kazakhstan, as well as a non-resident organization of the Republic of Kazakhstan in which the bank and (or) a bank holding company have a significant equity interest, are required to disclose to the authorized body, upon request, the necessary information in order to ensure high-quality and timely fulfillment of the tasks assigned to the authorized body. functions for the implementation of consolidated supervision. At the same time, the information received is not subject to disclosure.
10. In the event that a bank and (or) a bank holding company acquire signs of control over another legal entity, in the absence of permission from the authorized body, the authorized body shall apply supervisory response measures to the bank and (or) the bank holding company provided for by this Law. In this case, within six months from the moment of signs of control or detection of the specified violation by the authorized body, the bank and (or) the bank holding company are obliged to alienate their shares (shares in the authorized capital) of the legal entity to persons not related to them by special relations, and submit supporting documents to the authorized body.
11. Significant participation of the bank and (or) the bank holding company in the capital of organizations is allowed only with the prior permission of the authorized body.
The requirement to obtain permission from an authorized body for significant participation in the capital of an organization does not apply to:
1) bank holding companies that indirectly own (have the ability to vote, determine decisions and (or) influence decisions made by virtue of an agreement or otherwise) shares or stakes in the authorized capital of this organization through ownership (having the ability to vote, determine decisions and (or) influence decisions made by virtue of an agreement or otherwise) shares of a bank-resident of the Republic of Kazakhstan, directly owning (having the opportunity to vote, to determine decisions and (or) influence decisions made by virtue of an agreement or otherwise) by shares or shares of participation in the authorized capital of the specified organization and the authorized body having the appropriate permission.;
2) banks, in the case of participation in the authorized capital of legal entities through ownership (having the opportunity to vote, determine decisions and (or) influence decisions made by virtue of an agreement or otherwise) of shares or shares in the authorized capital of a subsidiary established (acquired) on the terms defined in Article 11-2 of this Law;
3) banks in case of transfer to their ownership of shares or participation shares in the authorized capital of legal entities accepted by the bank as collateral in accordance with the civil legislation of the Republic of Kazakhstan and the legislation of a foreign state, subject to the restrictions established by paragraph 7 of Article 8 of this Law.
The permission of the authorized body for significant participation in the capital of organizations is not required for an Islamic bank in the case of its acquisition of shares (stakes in the authorized capital) in financing production and trading activities through participation in the authorized capital of legal entities and (or) on partnership terms.
The granting of permission to a bank or a bank holding company for significant participation in the capital of organizations is carried out in accordance with the procedure established by a regulatory legal act of the authorized body.
In the event that a bank and (or) a bank holding company acquire a significant interest in the capital of an organization without obtaining the prior consent of the authorized body, the authorized body shall apply to the bank and (or) the bank holding company the supervisory response measures provided for by this Law. In this case, the bank and (or) the bank holding company must alienate their shares (stakes in the authorized capital) of the organization in which they have a significant stake to persons who are not related to the bank and (or) the bank holding company by special relations, and submit supporting documents to the authorized body within six months.
12. An application for a permit for significant participation in the capital of organizations in the form established by a regulatory legal act of the authorized body is submitted with the attachment of the documents provided for in the sub-paragraphs 2), 3), 5), 6) and 11) of paragraph 4 of this article, as well as a document confirming payment of the fee for granting a permit for significant participation in the capital of organizations, except in cases of payment through the electronic government payment gateway.
A refusal to grant a permit for significant participation in the capital of organizations is made on the grounds provided for in paragraph 6 of this article.
13. The authorized body revokes the permission for the establishment, acquisition of a subsidiary, significant participation in the capital of the organization in the following cases::
1) identification of false information on the basis of which the permit was issued;
2) non-compliance by the bank, a bank holding company, or a subsidiary of the bank with the requirements of this Law related to the activities of the subsidiary, which led to a violation of the bank's equity adequacy ratio, or the identification of inconsistencies in the activities of the subsidiary of the bank and (or) the bank holding company, as well as the organization in which the bank and (or) the bank holding company have significant participation in the capital in accordance with the requirements of paragraph 3 of Article 8 of this Law.
In case of revocation of a permit for the establishment, acquisition of a subsidiary, or significant participation in the capital of the organization, the authorized body decides to revoke the previously issued permit within two months from the date of discovery of the fact that is the basis for revocation of the permit.
13-1. The authorized body decides to revoke a previously issued permit for the establishment, acquisition of a subsidiary, or significant participation in the organization's capital in the following cases::
1) revocation of permission to establish, acquire a subsidiary, or participate significantly in the organization's capital;
2) termination of the activities of a subsidiary of the bank and (or) a bank holding company, organizations in which the bank and (or) a bank holding company have a significant equity interest, through reorganization (in the form of a merger, acquisition) or liquidation;
3) the bank and (or) the bank holding company have no signs of control over the subsidiary;
4) the bank and (or) the bank holding company have no signs of significant participation in the capital of the organization;
5) cancellation of the consent granted by the authorized body to acquire the status of a bank holding company in accordance with the third part of paragraph 18 of Article 17-1 of this Law.
The issued permission of the authorized body for the establishment, acquisition of a subsidiary, significant participation in the capital of the organization is considered cancelled from the day following the day the authorized body receives the application of the bank, bank holding company with the attachment of supporting documents on the cancellation of the previously issued permission on the grounds provided for in paragraphs 2), 3) and 4) of the first part of this paragraph, or after the day when the authorized body discovers the facts that are the basis for revoking the issued permit.
In the case provided for in subparagraph 5) of part one of this paragraph, the previously issued permission of the authorized body for the establishment, acquisition of a subsidiary, significant participation in the capital of the organization is considered cancelled from the date of cancellation of the consent of the authorized body to acquire the status of a bank holding company.
13-2. In case of revocation of the permission to establish, acquire a subsidiary, or participate significantly in the capital of the organization on the grounds specified in the first part of paragraph 13 of this article, the bank and (or) the bank holding company are obliged, within six months from the date of revocation of such permission, to alienate their shares (participation interests in the authorized capital) of these organizations to persons that is not related to this bank or bank holding company by special relations, and submit supporting documents to the authorized body.
The procedure for revocation and (or) cancellation of a permit for the establishment, acquisition of a subsidiary, or significant participation in the capital of organizations is established by a regulatory legal act of the authorized body.
14. The requirements of this article do not apply to:
1) cases of creation (acquisition) by a bank of a subsidiary organization under the conditions specified in Article 11-2 of this Law;
2) non-residents of the Republic of Kazakhstan who are subsidiaries or dependent organizations of non-residents of the Republic of Kazakhstan who are a bank holding company, a person who has the characteristics of a bank holding company, as well as non-residents of the Republic of Kazakhstan who are a bank holding company, a person who has the characteristics of a bank holding company, when they establish or acquire subsidiaries and dependent organizations that are non-residents of the Republic of Kazakhstan in the performance of one from the following conditions:
a bank holding company or a person with the characteristics of a bank holding company has an individual credit rating not lower than the A rating of one of the rating agencies, the list of which is established by the authorized body, as well as written confirmation from the financial supervisory authority of the country of origin of these persons that they are subject to consolidated supervision;
the existence of an agreement between the authorized body and the relevant supervisory authority of a foreign state on the exchange of information, as well as the minimum required rating of one of the rating agencies. The minimum rating and the list of rating agencies are established by a regulatory legal act of the authorized body.;
3) cases of acquisition by a bank of shares of another bank or shares and participation interests in the authorized capitals of legal entities owned by another bank when they reorganize in the form of incorporation in accordance with the procedure established by the legislation of the Republic of Kazakhstan.
15. If a bank holding company establishes or acquires a subsidiary financial organization or acquires a significant interest in the capital of a financial organization, in respect of which the legislation of the Republic of Kazakhstan provides for obtaining appropriate permits for participation in capital, permission to establish or acquire a subsidiary and (or) significant participation in capital is issued by the authorized body to the bank holding company simultaneously with the issuance of the relevant document granting the right to own, to use and (or) dispose of shares of a financial institution in the amounts established by the legislation of the Republic of Kazakhstan, without submitting the relevant documents provided for in this article, with the exception of a document confirming payment of a fee for issuing a permit.
A document confirming the payment of the permit fee provided for in part one of this paragraph will not be submitted if this fee is paid through the electronic Government payment gateway.
The requirements of the first part of this paragraph apply to persons wishing to acquire the status of a bank holding company.
16. If the acquisition by the bank of a subsidiary organization or a significant participation in the capital of the organization occurred as a result of the conversion into its ownership of shares accepted by the bank as collateral or shares of participation in the authorized capitals of the organizations specified in subparagraph 1) of paragraph 3 of Article 8 of this Law, the bank is obliged to obtain permission from the authorized body to establish or acquire a subsidiary organization or significant participation in the capital of organizations within the time period established by the authorized body as part of the application of a supervisory response measure to the bank.
The Law of the Republic of Kazakhstan dated August 31, 1995 No. 2444.
President
Republic of Kazakhstan
© 2012. RSE na PHB "Institute of Legislation and Legal Information of the Republic of Kazakhstan" of the Ministry of Justice of the Republic of Kazakhstan
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