Authorities to simplify rules for opening foreign banks in Kazakhstan
The Agency for Regulation and Development of the Financial Market (ARDFM) has prepared a draft law aimed at softening requirements for foreign banks that want to open subsidiaries and branch offices in Kazakhstan. The agency will introduce these amendments to the parliament very soon, according to Olzhas Kizatov, deputy chairman of the ARDFM.
As he noted, the agency has already cut the number of documents foreign banks should gather to open their subsidiaries in Kazakhstan.
«We know that in many cases this information might be received from other sources. Often, some documents double each other in one way or another. I mean we revised about fifty documents and many of them we have eliminated,» Kizatov said.
The official has also stressed that the agency won’t change the two key requirements of financial sustainability and business reputation. The deputy head of the ARDFM also said that several foreign banks have already shown interest in opening their branch offices in Kazakhstan. These are banks from South Korea, the Middle East, including Qatar, and Eastern Europe. However, none of them has officially approached the ARDFM, Kizatov added.
«Anyway, we want big international banks to enter our market. We believe that once they are here, their presence will boost further development of the banking sector in Kazakhstan,» he said.
President Kassym-Jomart Tokayev was the one behind this initiative. He proposed attracting at least three well-known international banks to Kazakhstan during his address to the nation in September 2023. At the time, Tokayev highlighted that foreign banks were necessary to make the sector more competitive.
The government has also softened its requirements for those microfinance organizations that want to turn themselves into banks. Chairperson of the ARDFM Madina Abylkassymova announced the move last year. After that, two big microfinance organizations KMF and Solva revealed their plans to transform themselves into commercial banks.
In mid-February 2024, Lesha Bank, an investment bank from Qatar, reached a preliminary arrangement with the state-owned holding of Baiterek about acquiring a Kazakhstani bank. Analysts believe that the subject of the negotiations between the two sides was Bereke Bank, a former subsidiary of the Russian Sberbank sold in 2022 when it was targeted with sanctions by Western countries.
