Kazakhstani banks to strengthen control over foreign users of their cards

Banks will close nonresident accounts if any suspicious transactions are detected / Photo: Shutterstock, photo editor: Milosh Muratovskiy

The process for issuing banking cards is set to become stricter for foreigners without a residence permit in Kazakhstan. They will now be required to verify their identity every month to maintain access to banking services.

The Agency for Regulation and Development of the Financial Market (ARDFM) of Kazakhstan has prepared a draft regulation proposing new measures to counter fraudulent activities, money laundering and the financing of terrorism.

Under the new rules, when issuing a card to a nonresident, any Kazakhstani bank must:

Verify the client’s ID, confirming they are legally in Kazakhstan with the necessary passport stamps, an Individual Identification Number (IIN) and other essential documents.
Analyze a questionnaire filled out by the client, detailing the reason for opening the account, the source of financing and information on other accounts in Kazakhstani banks.

A bank will monitor money movements in nonresident accounts to ensure transactions align with declared purposes for three months. If transactions do not match the information in the questionnaire, and there are no utility, tax, or other household payments, a bank’s collegial body may consider closing the account.

Other legislative initiatives target suspicious and high-risk nonresidents, including those suspected of illegal drug trafficking:

Banks will be prohibited from providing services to such individuals, including issuing payment cards through representatives or online.
Before using banking services or changing their phone number, foreign citizens must pass two-factor biometric authentication. Additionally, they must verify their identity monthly via online banking or mobile app.
Banks will be restricted from issuing more than one payment card to a nonresident, except for cards tied to special accounts for social benefits, children’s cards and credit cards for loan servicing.
The validity period of nonresident payment cards will be limited to 12 months.

The rules on monthly identity verification and payment card validity will apply to all nonresidents, not just those flagged by the ARDFM.

In addition, the ARDFM proposes restricting the issuance of cards to citizens under 21 and enhancing the oversight of individuals aged 14 to 25 who lack an official source of income but receive large, unexplained sums from non-family members.

Furthermore, banks will tighten their monitoring of foreign transfers exceeding 500,000 tenge ($992) made by Kazakhstani citizens.