Article 8-1. Restrictions imposed on banks when making transactions by the Law on Banks and Banking Activities in the Republic of Kazakhstan

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1. A bank shall not be entitled to issue bank loans and bank guarantees to persons connected with it by special relations defined in accordance with Article 40 of this Law, except for:

bank loans and bank guarantees provided to persons who are members of a banking conglomerate;

bank loans and bank guarantees that have collateral, the size and type of which comply with the requirements established by the regulatory legal act of the authorized body;

bank loans and bank guarantees provided to persons who do not have signs of an unstable financial situation, as determined by a regulatory legal act of the authorized body.

2. The Bank is not entitled to issue bank loans and bank guarantees to a legal entity (resident and non-resident of the Republic of Kazakhstan) that does not meet one of the following conditions:

1) there is information about an individual holding more than fifty percent of the shares in the authorized capital or outstanding (minus preferred and repurchased by the company) shares of a legal entity or having the opportunity to vote more than fifty percent of the shares (shares in the authorized capital) of this legal entity or exercising control over such a person;

2) there is information about individuals who collectively own more than fifty percent of the shares in the authorized capital or placed (minus preferred and repurchased by the company) shares of a legal entity or who have the opportunity to vote more than fifty percent of the shares (shares in the authorized capital) of this legal entity;

3) information is available on all owners of shares (stakes in the authorized capital) of a legal entity holding ten or more percent of common shares (stakes in the authorized capital) up to the final owners of common shares (stakes in the authorized capital) of the legal entity;

4) is a legal entity controlled by the Government of the Republic of Kazakhstan, a local executive body, or a foreign state with the minimum required rating. The minimum required rating and the list of rating agencies are established by a regulatory legal act of the authorized body.;

5) is an international organization included in the list established by the authorized body;

6) is an organization with the minimum required rating. The minimum required rating and the list of rating agencies are established by a regulatory legal act of the authorized body.;

7) there is information about individuals and legal entities specified in subitems 4) – 6) of this paragraph who collectively own more than fifty percent of the shares in the authorized capital or placed (minus preferred and repurchased by the company) shares of a legal entity or who have the opportunity to vote more than fifty percent of the shares (shares in the authorized capital) of this legal entity;

8) there is information about the management company of the investment fund, as well as individuals and legal entities specified in subitems 4), 5), 6) and 7) of this paragraph, who are shareholders (shareholders) of the specified investment fund and exercise control over the legal entity;

9) is a legal entity for which information is available, the procedure for disclosure of which is established by a regulatory legal act of the authorized body.

2-1. The Bank is not entitled to issue bank loans to a citizen of the Republic of Kazakhstan from the date of posting an announcement on the completion of out-of-court bankruptcy or judicial bankruptcy proceedings in accordance with the procedure provided for by the Law of the Republic of Kazakhstan "On Restoration of Solvency and Bankruptcy of Citizens of the Republic of Kazakhstan", as well as to accept collateral from such persons in the form of collateral, guarantees and sureties under bank loan agreements for five years.

3. The requirements of paragraph 2 of this article do not apply to bank loans and bank guarantees, the amount of which does not exceed the amount determined by the regulatory legal act of the authorized body.

The total amount of all bank loans and bank guarantees specified in paragraphs 1 and 2 of this article should not exceed the amount, the calculation procedure of which is determined by a regulatory legal act of the authorized body.

4. The Bank is prohibited from transferring assets worth more than ten percent of the bank's equity capital as collateral or any other form of encumbrance without prior approval of this transaction by the bank's board of Directors.

A branch of a non-resident bank of the Republic of Kazakhstan is prohibited from transferring assets worth more than ten percent of the assets of a branch of a non-resident bank of the Republic of Kazakhstan accepted as a reserve, as collateral or other form of encumbrance without prior approval of this transaction by a non-resident bank of the Republic of Kazakhstan..

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

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Republic of Kazakhstan

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