Article 16. Grounds for suspension, termination or revocation of a license to carry out microfinance activities of the Law on Microfinance Activities

Home / RLA / Article 16. Grounds for suspension, termination or revocation of a license to carry out microfinance activities of the Law on Microfinance Activities

1. The license for microfinance activities is suspended for up to six months on one of the following grounds:

1) carrying out activities in violation of the requirements provided for in paragraphs 5 and 6 of Article 14, paragraphs 3, 5 and 7 of Article 14-1 of this Law;

2) violation of prudential standards and (or) other mandatory rules and limits;

3) repeated (two or more times within twelve consecutive calendar months) failure to submit reports to the National Bank of the Republic of Kazakhstan;

4) repeated (two or more times within twelve consecutive calendar months) bringing to administrative responsibility for submitting unreliable financial or other statements;

5) failure to comply with the written instructions of the authorized body;

6) obstruction of the inspection, which resulted in the impossibility of conducting it within the established time frame;

7) repeated (two or more times within twelve consecutive calendar months) violation of the requirements stipulated by the Law of the Republic of Kazakhstan "On Countering the Legalization (Laundering) of Proceeds from Crime, financing of terrorism and financing the proliferation of weapons of Mass Destruction";

8) identification of false information and information in the documents submitted for obtaining a license to carry out microfinance activities.

2. The license to carry out microfinance activities is revoked on one of the following grounds::

1) systematic (three or more times within twelve consecutive calendar months) suspension of the license for microfinance activities;

2) carrying out activities with systematic (three or more times within twelve consecutive calendar months) violations of the requirements of the laws of the Republic of Kazakhstan, as well as regulatory legal acts of the authorized body, the National Bank of the Republic of Kazakhstan;

3) systematic (three or more times within twelve consecutive calendar months) failure to comply with the written instructions of the authorized body;

4) carrying out activities not provided for by this Law;

5) systematic (three or more times within twelve consecutive calendar months) bringing to administrative responsibility for submitting unreliable financial or other statements;

6) failure to carry out activities within six consecutive calendar months from the date of obtaining a license to carry out microfinance activities;

7) the entry into force of a court decision on the termination of the microfinance organization's activities;

8) making a decision on the voluntary termination of its activities through reorganization or liquidation.

A microfinance organization must fulfill all its obligations before submitting an application for termination of a license to carry out microfinance activities. A letter confirming the fulfillment of all obligations is attached to the application at the same time.;

9) obstructing the inspection more than twice, resulting in the impossibility of carrying it out on time.

3. When determining the expediency of applying a sanction in the form of suspension or revocation of a license to carry out microfinance activities, the following factors are taken into account::

1) the level of risk, the nature of violations and (or) identified deficiencies and their consequences;

2) the scale and significance of the violations and (or) identified deficiencies and their consequences;

3) the systematic nature and duration of violations and (or) identified deficiencies;

4) the impact of violations and (or) identified deficiencies on the financial condition of the microfinance organization;

5) the reasons that led to the occurrence of violations and (or) identified deficiencies;

6) taking independent measures aimed at eliminating identified deficiencies, risks or violations.

4. The license for microfinance activities is terminated in the following cases::

1) from the moment of the state re-registration of the microfinance organization in the bank;

2) on the grounds stipulated by the Law of the Republic of Kazakhstan "On Permits and Notifications".

5. The decision to suspend or revoke the license to carry out microfinance activities comes into force from the date of its adoption.

The license for microfinance activities is considered suspended from the date of notification of such a decision to the microfinance organization.

Information on the decision to suspend or revoke the license for microfinance activities is published on the authorized body's Internet resource in Kazakh and Russian.

6. The decision of the authorized body to suspend or revoke the license to carry out microfinance activities is appealed in court.

An appeal against the decision of the authorized body on suspension or revocation of a license to carry out microfinance activities does not suspend the execution of such a decision.

7. The suspension of the microfinance activity license entails a ban on the conclusion by a microfinance organization of new microcredit agreements, including the extension of existing microcredit agreements and their amendment, providing for an increase in the obligations and responsibilities of the microfinance organization, as well as the obligations and responsibilities of the borrower. A microfinance organization whose microfinance license has been suspended is obliged to fulfill its obligations under previously concluded microcredit agreements.

8. A microfinance organization that has been deprived of a license to carry out microfinance activities or whose license has been suspended is not entitled to carry out microfinance activities.

9. A microfinance organization is obliged, within thirty calendar days from the date of the decision by the authorized body to revoke the license to carry out microfinance activities, to carry out the re-registration procedure by excluding from its name the words "microfinance organization", "credit partnership", "pawnshop", words derived from them or abbreviations suggesting that the specified legal entity carries out activities related to the provision of micro-loans, or to decide on reorganization or liquidation.

The footnote. Article 16 as amended by the Law of the Republic of Kazakhstan dated 07/03/2020 No. 359-VI (effective from 01/01/2021); as amended by the Laws of the Republic of Kazakhstan dated 01/01/2021 No. 399-VI (effective from 01/01/2021); dated 07/12/2022 No. 138-VII (effective sixty calendar days after the date of its first official publications).

The Law of the Republic of Kazakhstan dated November 26, 2012 No. 56-V.

This Law regulates public relations related to the provision of micro-loans, establishes the specifics of the creation and reorganization of organizations engaged in microfinance activities, the legal status, activities of organizations engaged in microfinance activities, and also defines the specifics of state regulation of organizations engaged in microfinance activities, control and supervision of their activities.

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