Article 86. Instruments that ensure the overall ability to absorb (cover) losses of the Law on Banks and Banking Activities in the Republic Kazakhstan

Home / Laws / Article 86. Instruments that ensure the overall ability to absorb (cover) losses of the Law on Banks and Banking Activities in the Republic Kazakhstan

1. The instruments that provide the overall loss absorption (coverage) capability include financial instruments that meet the following criteria:

1) The instrument is fully paid for;

2) The instrument is unsecured;

3) the validity period of the instrument is at least one year, or the instrument is indefinite (without a fixed maturity date);

4) obligations under the instrument are not subject to early execution (early repayment), including at the request of creditors on this instrument;

5) obligations under the instrument are not subject to termination by offsetting counterclaims (claims) if this hinders the instrument's ability to absorb (cover) losses in the settlement regime.

2. Instruments that provide the overall ability to absorb (cover) losses cannot be paid for (purchased) at the expense of funds:

1) The National Bank of the Republic of Kazakhstan and its subsidiaries;

2) the bank that issued these instruments;

3) subsidiaries of the bank or organizations in which the bank has a significant equity interest.

3. The instruments that provide the overall ability to absorb (cover) losses do not include:

1) deposits that are subject to mandatory deposit guarantees;

2) demand deposits and deposits with a remaining repayment period of less than one year;

3) obligations under derivative financial instruments;

4) debt instruments with characteristics of derivative financial instruments, including structured debt instruments;

5) obligations arising from non-contractual relations, including obligations to pay taxes and other mandatory payments to the budget;

6) obligations, the satisfaction of claims for which occurs before the satisfaction of creditors of the eighth stage, established by Article 123 of this Law;

7) obligations that are not subject to compulsory restructuring in accordance with paragraph 4 of Article 96 of this Law;

8) other obligations that cannot be prematurely terminated and/or converted into common shares of the bank in the settlement mode.

4. A systemically important bank must have a minimum level of instruments ensuring the overall ability to absorb (cover) losses, established by the authorized body, for the purposes of applying the settlement instruments provided for in Article 93 of this Law, in accordance with the settlement objectives established by paragraph 1 of Article 92 of this Law.

The minimum level of instruments providing the overall loss absorption (coverage) capability for systemically important banks, as well as the list and basic requirements for such instruments, are established by a regulatory legal act of the authorized body.

The Law of the Republic of Kazakhstan dated January 16, 2026 No. 258-VIII SAM.

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Republic of Kazakhstan

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