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Kazakh regulator suspends licenses of 2 local lenders

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Kazakh regulator suspends licenses of 2 local lenders

The National Bank of the Republic of Kazakhstan suspended the license of JSC Eximbank Kazakhstan and Bank of Astana JSC for a period of three months.

The regulator said May 29 that it had decided to suspend the licenses due to repetitive violations of banking regulations by Eximbank and the failure of Bank of Astana to comply with "contractual obligations on payment and transfer operations."

The suspension of the licenses applies to attracting new retail deposits and opening new bank accounts for individual clients, but will not affect existing deposits and customers of the lenders, the central bank noted.

As of May 1, the value of retail deposits held at Eximbank and Bank of Astana stood at 267 million Kazakh tenge and 53 billion tenge, respectively, equivalent to 0.003% and 0.6% of the total value of retail deposits in the Kazakh banking system, the central bank noted.

Kazakh President Nursultan Nazarbayev said in April that the two banks, as well as JSC Qazaq Banki, had bad financial indicators because of poor management by their shareholders. Following the president's remarks, Bank of Astana suffered an outflow of retail deposits and had to impose restrictions on money transfers and other transactions.

The license of Qazaq Banki was suspended by the central bank at the end of April.

As of May 28, US$1 was equivalent to 329.64 Kazakh tenge.