Article 16. Specifics of conducting an operation for the simultaneous transfer of assets and liabilities of a bank to another (other) bank(s) or a stabilization bank of the Law on Mandatory Guarantee of Deposits Placed in Second-tier Banks of the Republic of Kazakhstan

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Article 16. Specifics of conducting an operation for the simultaneous transfer of assets and liabilities of a bank to another (other) bank(s) or a stabilization bank of the Law on Mandatory Guarantee of Deposits Placed in Second-tier Banks of the Republic of Kazakhstan

1. In order to protect the interests of depositors, it is allowed to conduct an operation for the simultaneous transfer of assets and liabilities of a bank in settlement mode to another bank (other banks) or a stabilization bank, the procedure for which is determined by the banking legislation of the Republic of Kazakhstan.

2. Excluded by the Law of the Republic of Kazakhstan dated 07/02/2018 No. 168-VI (effective from 01.01.2019).

3. If the amount of obligations under guaranteed deposits transferred in accordance with paragraph 1 of this Article to another bank (other banks) or a stabilization bank exceeds the amount of the bank's assets in settlement mode, the organization providing mandatory deposit guarantees is obliged to make up the difference at the expense of a special reserve, and in the case of their insufficiency is at the expense of their own assets used in accordance with the procedure provided for in paragraph 4 of Article 22 of this Law.

4. The amount of funds transferred by an organization providing mandatory deposit guarantees in accordance with paragraph 3 of this article shall not exceed the amount to be paid as a guarantee compensation, determined in accordance with Article 18 of this Law.

The Law of the Republic of Kazakhstan dated July 7, 2006 No. 169-III.

This Law is aimed at protecting the rights of depositors – individuals, including individual business entities, private notaries, private bailiffs, lawyers and professional mediators, and defines the legal basis for the functioning of the mandatory deposit guarantee system placed in second-tier banks of the Republic of Kazakhstan (bank branches – non–residents of the Republic of Kazakhstan), with the exception of Islamic bank deposits and money in bank accounts raised as part of Islamic banking operations, as well as the procedure for establishing and operating an organization that provides mandatory deposit guarantee, participation of second-tier banks of the Republic of Kazakhstan (branches of non-resident banks of the Republic of Kazakhstan) in the mandatory deposit guarantee system and other issues of mutual relations between participants systems.

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