Kazakhstan Officially Unveils New Banking Institution Number 23
Kazakhstan Welcomes Two New Second-Tier Banks
In a significant move for the Kazakhstan financial sector, two new second-tier banks, KMF Bank AO and AO "Commercial Bank BiENKE", have been licensed to operate in the country. These banks will join the ranks of 23 other second-tier banks, contributing to a diverse and competitive financial landscape.
The Licensing Process
The licensing process for these banks involves a multi-step procedure regulated by the National Bank of Kazakhstan and other relevant authorities. The process consists of two stages: the issuance of a preliminary permit followed by the full banking license. The National Bank evaluates compliance with licensing criteria, including capital adequacy, ownership structure, business model, and financial soundness.
Capital and Financial Requirements
Both KMF Bank AO and AO "Commercial Bank BiENKE" have demonstrated sufficient equity capital and sound financial positions. KMF Bank's transition saw an equity reportedly around $121 million, while the assets of AO "Commercial Bank BiENKE" at the time of licensing remain undisclosed.
Documentation and Business Plan
Applicants must submit detailed documents, including a business plan, corporate governance structure, financial forecasts, AML-CFT policies, KYC procedures, and information on senior management and board. However, evaluations of business models and competitive assessments in Kazakhstan tend to be more basic and may lack in-depth peer comparison.
Corporate Governance
Both banks are required to appoint competent senior management, a management board, and officers such as compliance and AML officers. In the case of licenses connected with the Astana International Financial Center, this includes officers for financial and crypto licenses.
Regulatory Oversight
The National Bank or relevant authority monitors ownership changes rigorously, with the right to refuse license issuance or preliminary permits if the applicant does not meet requirements or has financial weaknesses.
KMF Bank AO: A Success Story
KMF Bank AO, originally a leading microfinance organization, systematically worked on upgrading its status to a second-tier bank. This involved scrupulous compliance with banking regulations, financial robustness, broader product offerings, and supporting entrepreneurship. As of August 1, 2022, KMF Bank AO's assets totaled 395 billion tenge, and its client base exceeds 275,000 individuals. More than 90% of KMF Bank's funds were directed towards financing small and medium-sized businesses, including the agricultural sector.
AO "Commercial Bank BiENKE": A New Player
AO "Commercial Bank BiENKE" is the 24th second-tier bank in Kazakhstan. The bank's credit portfolio as of the time of licensing is not disclosed. The bank's client base and the percentage of funds directed towards financing small and medium-sized businesses, including the agricultural sector, are also not specified.
Joining the Deposit Insurance System
Servicing of physical persons by both banks is not yet possible, as they have not joined the deposit insurance system. This will change in the future, allowing both banks to expand their services to include individual clients.
The Future of Kazakhstan's Financial Sector
The licensing of KMF Bank AO and AO "Commercial Bank BiENKE" marks a significant step forward for Kazakhstan's financial sector. As these banks begin operations, further details about their specifics and performance will be revealed, contributing to a vibrant and competitive financial landscape in the country.
The licensing of KMF Bank AO and AO "Commercial Bank BiENKE" has expanded the financial sector of Kazakhstan, adding to the existing 23 second-tier banks in the industry. Both banks have complied with the financial requirements and have been granted licenses after a rigorous evaluation process by the National Bank of Kazakhstan.
