Article 26. Licensing of banking and other operations of the Law on Banks and Banking Activities in the Republic of Kazakhstan

Home / RLA / Article 26. Licensing of banking and other operations of the Law on Banks and Banking Activities in the Republic of Kazakhstan

 The footnote. Title of Article 26 as amended by the Law of the Republic of Kazakhstan dated 07/02/2018 No. 168-VI (effective after ten calendar days from the date of its first official publication).

1. Licenses for conducting banking and other operations established by this Law shall be issued by the authorized body or the National Bank of the Republic of Kazakhstan within its competence and in accordance with the procedure determined by the authorized body or the National Bank of the Republic of Kazakhstan, in accordance with the requirements of this Law.

Licenses for conducting banking and other operations provided for in Article 52-5 of this Law are issued by the authorized body only to Islamic banks.

Licenses for conducting banking operations provided for in sub-paragraphs 1), 2), 3), 4), 5) and 6) of paragraph 1 of Article 52-5 of this Law, are issued by the authorized body only to branches of non-resident Islamic banks of the Republic of Kazakhstan.

Licenses for a branch of a non-resident bank of the Republic of Kazakhstan to conduct banking and other operations are issued by the authorized body if the non-resident bank of the Republic of Kazakhstan has a valid license to conduct substantially similar banking and other operations issued by the financial supervisory authority of the state of which the non-resident bank of the Republic of Kazakhstan is a resident.

The authorized body has the right, when issuing or reissuing a license, to specify the names of authorized operations by banks and (or) organizations engaged in certain types of banking operations, in accordance with the legislation of the Republic of Kazakhstan.

A fee is charged for issuing a license, the amount and payment procedure of which are determined by the legislation of the Republic of Kazakhstan.

2. Within one year from the date of issuance of the authorized body's permission to open a bank (a branch of a non–resident bank of the Republic of Kazakhstan), the applicant must submit to the authorized body an application for a license to conduct banking and other operations in the form established by the regulatory legal act of the authorized body.

Before applying for a license to conduct banking and other operations, the applicant must complete all organizational and technical measures related to the planned start of banking and other activities, including:

to prepare premises, equipment and software for automation of accounting and general accounting books that comply with the requirements of regulatory legal acts of the authorized body and the National Bank of the Republic of Kazakhstan;

To approve the rules defining the general conditions of operations and the internal rules provided for in paragraph 1 of Article 31 of this Law;

to approve internal documents related to the implementation of banking and other activities, including those necessary for the formation of a risk management and internal control system, in accordance with the requirements established by the regulatory legal acts of the authorized body.

2-1. List of documents required for obtaining licenses for banking and other operations by legal entities resident in the Republic of Kazakhstan for the first time:

1) an application in which the applicant confirms, among other things, the completion of all organizational and technical measures related to the planned start of banking and other activities;

2) a notarized copy of the applicant's articles of association;

3) a document confirming the payment of a license fee to the budget for the right to engage in certain types of activities, except in cases of payment through the electronic government payment gateway;

4) documents provided for the approval of persons proposed for the positions of senior employees of the bank, in accordance with the requirements of Article 20 of this Law;

5) a copy of the applicant's development strategy for the next three years, which meets the requirements of the authorized body for the risk management and internal control system.

The applicant's development strategy includes information about the applicant's organizational structure, the applicant's budget for the financial year in which the application is submitted, including forward-looking data on the applicant's compliance with prudential standards, as well as the estimated calculation of prudential standards of the banking conglomerate, which will include the applicant, in the event that the acquisition of the status of a bank holding company by the applicant's parent organization It led to the creation of a banking conglomerate.

If the application is submitted less than two months before the end of the financial year, the applicant's development strategy additionally includes the information provided for in part two of this subparagraph for the financial year following the year in which the application is submitted.;

6) staffing table with the indication of surnames, first names and patronymics (if they are indicated in the identity documents) employees;

7) copies of documents confirming the payment of the authorized capital, the minimum amount of which is established by a regulatory legal act of the authorized body;

8) copies of documents confirming the authority of the person to submit the application and the documents attached to it.

2-2. The list of documents required for a branch of a non–resident bank of the Republic of Kazakhstan to obtain a license to conduct banking and other operations for the first time:

1) the documents provided for in the sub-paragraphs 1), 3), 4), 5) and 8) paragraph 2-1 of this article;

2) a copy of the regulations on the branch approved by the management body of a non–resident bank of the Republic of Kazakhstan;

3) a written commitment (confirmation) of a non–resident bank of the Republic of Kazakhstan to assume responsibility for obligations arising in the course of carrying out the activities of its branch in the territory of the Republic of Kazakhstan, and to record such obligations on the balance sheet of a non–resident bank of the Republic of Kazakhstan;

4) a copy of the current license (current permit) of a non–resident bank of the Republic of Kazakhstan for conducting banking and other operations, issued (issued) by the financial supervisory authority of the state of which the non–resident bank of the Republic of Kazakhstan is a resident, indicating the list of banking and other operations permitted under the license (permit), is provided if, after applying for a permit to open a bank branch – a non–resident of the Republic of Kazakhstan, provided for in paragraph 2 of Article 13-1 of this Law, has changed the list of banking or other operations that a non–resident bank of the Republic of Kazakhstan is entitled to carry out, or a non-resident bank of the Republic of Kazakhstan has received a new license (new permit).

2-3. Within one year from the date of issuance of the authorized body's permit for the voluntary reorganization of a microfinance organization in the form of conversion into a bank in accordance with the Law of the Republic of Kazakhstan "On Microfinance Activities", the applicant must complete all organizational and technical measures provided for in paragraph 2 of this Article, and no later than thirty calendar days before the end of the conversion period specified in the permit apply to the authorized body to obtain a license to conduct banking and other operations.

3. In order to obtain a license to conduct additional banking and other operations, an operating bank must:

1) ensure compliance with prudential standards during the three consecutive months preceding the application for a license to conduct additional banking operations;

2) ensure the availability of risk management and internal control systems that comply with the requirements of the authorized body;

3) provide rules on the general conditions for conducting additional types of banking transactions.

4. Excluded by the Law of the Republic of Kazakhstan dated 07/12/2022 No. 138-VII (effective sixty calendar days after the date of its first official publication).

5. An application for a license to conduct banking and other operations must be reviewed by the authorized body or the National Bank of the Republic of Kazakhstan within thirty working days from the date of submission of documents that comply with the requirements of the legislation of the Republic of Kazakhstan.

An application for a license to conduct banking and other operations submitted as part of the voluntary reorganization of a microfinance organization in the form of conversion to a bank must be considered by the authorized body within ten working days from the date of submission of documents that comply with the requirements of the legislation of the Republic of Kazakhstan.

The application for renewal of the license, except for the cases provided for in Article 34 of the Law of the Republic of Kazakhstan "On Permits and Notifications", must be considered by the authorized body within fifteen working days from the date of submission of documents that comply with the requirements of the legislation of the Republic of Kazakhstan.

6. A license for conducting banking and other operations in national and (or) foreign currency is issued for an unlimited period.

7. The license for conducting banking and other operations is not transferable to third parties.

8. All types of banking and other operations can be carried out only if there is a direct indication in the license for the right to conduct them.

9. The decision to grant a license for banking and other operations is posted on the Internet resource of the authorized body or the National Bank of the Republic of Kazakhstan in Kazakh and Russian.

10. A duly certified copy of the license for banking and other operations must be placed in a place accessible to the bank's customers.

The Law of the Republic of Kazakhstan dated August 31, 1995 No. 2444.

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Republic of Kazakhstan

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