On Banks and Banking Activity in the Republic of Kazakhstan (стр. 5 )

Article 26. Licensing of Banking Operations

   1. The authorized body or the National Bank within their authorities shall issue a license for banking operations and for any other operations as provided by this Law in a manner, prescribed by the authorized body and the National Bank in accordance with the requirements of this Law.
  Licenses for banking and other operations, established by Article 52-5 of this Law, shall be issued by the authorized body only to Islamic banks.
 The National Bank or the authorized body shall have a right at issue of a license to clarify the names of operations, allowed to be performed by banks in accordance with the legislation of the Republic of Kazakhstan.
 Issue of licences is subject to payment of a fee, which amount and procedure of payment shall be defined by the legislation of the Republic of Kazakhstan.   

  2. In order to obtain a license for banking operations within one year after the date of state registration, an applicant shall be obliged to submit the following documents:
  1) an application;
  2) documents, certifying fulfillment of all organizational and technical measures, including preparedness of the building, hardware and software for automation of the accounting and master ledger in compliance with the requirements of the normative legal acts of the authorized body and the National Bank, as well as on the availability of the automated bank system compliant with the requirements of the National Bank, and also on the employees who have relevant qualification;
  3) a notarized copy of the charter and a copy of the certificate of state registration of an applicant being a legal entity;
  4) a copy of the certificate of taxpayer and the statistical card;
  5) a document, confirming payment of the license fee for the performance of certain kinds of activity to the budget;
  6) documents of the persons, proposed for the positions of a bank’s executive officers in accordance with the requirements of Article 20 of this Law;
  7) the provisions on the internal audit service, approved by a bank’s Board of Directors;
  8) the provisions on the credit committee, approved by a bank’s Board of Directors;
  9) the staff structure (with references to surnames, names and patronymics, if available);
  10) documents, confirming compliance of all software aids of a bank with the requirements of the authorized body and the legislation of the Republic of Kazakhstan On Credit Bureaus;
  11) copies of the documents, confirming payment of the charter capital, which minimum amount shall be defined by the normative legal act of the authorized body or the National Bank.

  2-1. To obtain a license for additional banking operations, a bank shall be obliged:
  1) to fulfil compliance with the prudential standards within three consequent months prior to the application for issue of a license for additional banking operations;
  2) to fulfil compliance with the requirements, prescribed by the authorized body in terms of availability of the systems of risk management and internal control;
  3) to submit the rules of the general terms for additional banking operations.
   3. Simultaneously with the application for issue of a license for the performance of banking operations, a licensee shall be obliged to submit the documents, which confirm fulfilment of the requirements of paragraph 2 of this Article in a manner, defined by the normative legal acts of the authorized body or the National Bank.
  Requirements applied to a bank for obtaining a license, prescribed by subparagraphs 2), 10) paragraph 2 of this Article, shall be fulfilled by the bank at the performance of banking operations.
  4. Applications for issue of a license for the performance of banking operations shall be considered by the authorized body or the National Bank within thirty days from the date of submission of the documents, compliant with the requirements of the legislation of the Republic of Kazakhstan.
  5. A license for the performance of banking operations in the national and/or foreign currency shall be issued for unlimited period.
  6. A license for the performance of banking operations shall not be subject to transfer to third parties.
  7. All types of banking operations may be carried out only in the case if there is a direct reference to the right of its performance in the license.
  8. A decision on issue of a licence for the performance of banking operations shall be published in the official editions of the authorized body or the National Bank.
  9. A duly certified copy of a license for banking operations shall be kept in the place, accessible for customers of this bank.
  Reference. Article 26 with amendments, inserted by the RK Laws dated 11.07.1997 N 154; dated 16.07.1999 N 436; dated 02.03.2001 N 162 (see art. 2); dated 16th of May 2003 N 416; dated 10th of July 2003 N  483 (effective since 1st of January 2004); dated 23rd of December 2005 N  107 (enactment procedure, see art.2 of the Law N 107); dated 23.10.2008 N 72-IV (enactment procedure, see art.2); dated 20.11.2008 N 88-IV (enactment procedure, see art. 2); dated 12.02.2009 N 133-IV (enactment procedure, see art. 2).

  Article 27. Grounds for Denial of Issue of a License for the Performance of a Banking Operation
 
 A denial of issue of a license for the performance of banking operations shall take place in the following cases:
  1) non-compliance with any of the requirements, established by paragraph 2 and 2-1 of Article 26 of this Law;
  2) if a bank has not applied for a license within one year after its state registration;
  3) non-compliance of the submitted documents with the requirements of the legislation of the Republic of Kazakhstan;
  4) submission of the incomplete set of documents;
  5) non-approval of the executive officer appointed from among the selected candidates (for a newly established bank).
  Reference. Article 27 is stated in the wording of the RK Law dated 23.10.2008 N 72-IV (enactment procedure, see art.2).

  Article 28. Changes and Amendments to a Bank’s Foundation Documents
 
  1. Changes and amendments, introduced to the foundation documents of banks, including those which require re-registration in the bodies of Justice, shall be subject to preliminary approval by the authorized body.
  2. The authorized body shall review the issue on insertion of changes and amendments to the foundation documents of a bank within one month.
  2-1. After state registration, changes and amendments, inserted to the charter documents, including those which require re-registration in the bodies of Justice, a bank within fourteen calendar days shall be obliged to submit to the authorized body a notarized copy of changes and amendments in the charter documents with the mark and the stamp of the registration agency of Justice.
  3. The provisions, grounds and procedure for voluntary transformation of a bank into an organisation, which carries out certain types of banking operations, shall be defined in the normative legal acts of the authorized body.
  Reference. Article 28 is amended by the RK Laws dated 11th of July 1997 N 154; dated 16th of July 1999 N 436; dated 2nd of March 2001 N 162 (see art. 2); dated 10th of July 2003 N 483 (effective since 1st of January 2004).

  Article 29. Establishment and Closure of a Bank’s Branches and Representative Offices
 

  1. A resident bank of the Republic of Kazakhstan shall have a right to establish its separate subdivisions, i. e. branches and representative offices in the territory of and outside the Republic of Kazakhstan without a permit of the authorized body and on the basis of a decision, taken by the Board of Directors.
  2. Within thirty working days after the registration date of its branch and representative office in the bodies of Justice a bank shall be obliged to notify the authorized body about such establishment in written with the following documents attached:
  1) a notarized copy of the registration certificate of a bank’s branch and representative office;
  2) a notarized copy of the provision on the branch or the representative office with the mark and the stamp of the registration agency of Justice;
  3) a notarized copy of the opinion and the inspection act of the National Bank, confirming that premises of the branch comply with the requirements, prescribed by the normative legal acts of the National Bank (in case of establishment of a branch);
  4) a notarized copy of the power of attorney, issued to the chief executive officer of the branch or the representative office.
  3. No approval of the local authorities and the executive bodies is required for establishment and closure of a branch or representative office of a bank in the territory of the Republic of Kazakhstan.
  4. Branch of a bank is a separate subdivision, which is not a legal entity, located out of the bank’s location, and carrying out banking activities on behalf of the bank and acting under the authorities granted by the bank. A branch of the bank has a common balance with the bank, as well as a name, which fully coincides with the bank’s name.
 Branch of a bank shall have a right to have premises, located in several places within one region (a city of the republican importance, a capital).
  5. A representative office of a bank is a separate subdivision, which is not a legal entity, located out of the bank’s address, and which acts on behalf and by the order of the bank and does not carry out banking activities.
  6. The mandatory conditions for establishment of branches by a bank, as well as for increase in the number of additional premises of the operating branches, including premises, located in several places, are as follows:
  1) loss-free operation of a bank according to the results of last financial year;
  2) a bank’s observance of the prudential standards within three months prior to the registration date of the branch in the bodies of Justice and the registration date of amendments to the branch provisions in terms of increase in the number of premises of the bank’s operating branch, including premises, located in several places;
  3) non-enforcement by the authorized body of sanctions, prescribed by subparagraphs b) – i) paragraph 2 Article 47 of this Law, to a bank within three months prior to the registration date of the branch in the bodies of Justice and the registration date of amendments to the branch provisions in terms of increase in the number of premises of the bank’s operating branch, including premises, located in several places, as well as sanctions in a form of penalty for administrative violations, prescribed by parts 2, 3, 5, 7 and 8 of Article 168-2 and Article 356 of the Administrative Violations Code of the Republic of Kazakhstan;
  4) an opinion and an inspection act of the National Bank, confirming that premises of the branch comply with the requirements, prescribed by the normative legal acts of the National Bank.
 The requirement under subparagraph 1 paragraph 6 of this Article does not apply to a newly establish bank within three years after its establishment, provided that the requirements to the minimum amount of the bank’s own capital are observed.
  7. A resident bank of the Republic of Kazakhstan shall have a right to establish a representative office in case of loss-free activities of the bank according to the results of last financial year.
  8. In the case of insertion of changes and amendments to the provisions on branch and representative office, a resident bank of the Republic of Kazakhstan shall submit the notarized copies of such documents to the authorized body within thirty working days after the registration (re-registration) date in the bodies of Justice.
 In the case of changes in the location of a branch, the bank shall additionally submit to the authorized body the notarized copies of an opinion and an inspection act of the National Bank, confirming that premises of the branch comply with the requirements, prescribed by the normative legal acts of the National Bank.
  8-1. A resident bank of the Republic of Kazakhstan shall have a right to open its branch outside the territory of the Republic of Kazakhstan only in the case, if the information exchange agreement has been concluded between the authorized body and respective supervision agency of the foreign state.
  9. In the case of establishment of branches and representative offices outside the territory of the Republic of Kazakhstan, a resident bank of the Republic of Kazakhstan shall notify the authorized body in written about such establishment with attachment of the documents, confirming registration in the respective state agency within thirty calendar days after registration in the respective state agency.
  10. A non-resident bank of the Republic of Kazakhstan shall have a right to establish its representative office without approval of the authorized body.
  11. Within thirty working days after registration in the bodies of Justice, a representative office of a non-resident bank of the Republic of Kazakhstan shall notify the authorized body about its establishment with attachment of the following documents:
  1) a notarized copy of the registration certificate of the representative office of a non-resident bank of the Republic of Kazakhstan;
  2) a notarized copy of the provisions on representative office with the mark and the stamp of the registration body of Justice;
  3) a written statement of the banking supervision agency of the respective state, indicating that the non-resident bank of the Republic of Kazakhstan has a valid license for banking activities;
  4) a written notification of the banking supervision agency of the respective state, indicating that it does not disagree with establishment of the representative office of the non-resident bank of the Republic of Kazakhstan in the territory of the Republic of Kazakhstan, or statement of the banking supervision agency or the reputable legal service of the respective state, indicating that such a permit is not required under the legislation of the home country of the non-resident bank of the Republic of Kazakhstan;
  5) a notarized copy of the power of attorney, issued to the chief executive officer of a bank’s representative office.
  12. It is prohibited to establish branches of non-resident banks in the Republic of Kazakhstan.
  13. A representative office of a non-resident bank of the Republic of Kazakhstan shall notify the authorized body about changes and amendments to the provisions on representative office within thirty working days after the registration (re-registration) date in the bodies of Justice with attachment of the notarized copies of such documents.
  14. Within thirty working days after deregistration of a branch and/or a representative office in the bodies of Justice (the respective registration agency of the state in the case of termination of activity of a branch or a representative office outside the territory of the Republic of Kazakhstan), a bank shall in written notify the authorized body about termination of activities with attachment of the notarized copy of document, issued by the body of Justice, which confirms deregistration of this branch and (or) representative office of the bank.
  15. The authorized body shall have a right to request closure of a branch and (or) a representative office of a resident bank and a representative office of a non-resident bank of the Republic of Kazakhstan in the case of non-fulfilment of the requirements, set out in paragraphs 2, 6 – 9, 11 and 13 of this Article.
  Reference. Article 29 is stated in the wording of the RK Law dated 23rd of December 2005 N 107 (enactment procedure, see art. 2 of the Law N 107). The Article with amendments, inserted by the RK Law dated 19th of February 2007 N 230 (enactment procedure, see art.2).

Chapter 3. (The title of Chapter 3 is excluded by the RK Law dated 8th of July 2005 N 72 (enactment procedure, see art.2).

  Article 30. Bank Operations
 
  1. Bank operations refer to the performance of bank operations by banks, as well as to any other transactions, established by this Article.

  2. The following shall be recognised as the bank operations:
  1) acceptance of deposits, opening and maintenance of the bank accounts of legal entities;
  2) acceptance of deposits, opening and maintenance of the bank accounts of individuals;
  3) opening and maintenance of the correspondent accounts of banks and organisations, which carry out separate types of bank operations;
  4) opening and maintenance of the metal accounts of individuals and legal entities, where the physical quantity of affined precious metals held by the given person is recorded;
  5) cash transactions: acceptance and withdrawal of cash under one of the bank operations, mentioned in subparagraphs 1),– 9), 12 and 13) of this paragraph, including change, exchange, recalculation, sorting, packing and storage;
  6) transfer operations: execution of payment and transfer orders of legal entities and individuals;
  7) accounting transactions: accounting (discounting) for bills of exchange and any other debt obligations of legal entities and individuals;
  8) bank borrowing transactions: granting of loans in money terms on the conditions of chargeability, urgency and recoverability by a bank, a mortgage organization, a broker and/or a dealer with the right to manage accounts of customers as a nominal holder or a subsidiary organization of the national management holding in sphere of agricultural industrial complex;
  9) arrangement of foreign currency exchange operations;
  10) (excluded by the Law dated 12th of January 2007 N 222)
  11) (excluded by the Law dated 12th of January 2007 N 222)
  12) cashing of bank notes, coins and valuables;
  13) acceptance for collection of the payment documents (except for the bills of exchange);
  14) opening (issuing) and confirmation of the letters of credit and performance of the associated obligations;
  15) issue of bank guarantees to be performed in money terms; V085231
  16) issue of bank suretyship and other obligations to be performed in money terms on behalf of third parties.
  3. Bank operations do not include the activity on granting of micro credits to the legal entities, registered as microcrediting organizations in accordance with the procedure, established by the legislation of the Republic of Kazakhstan.
  4. A bank operation listed in paragraph 2 herein may be carried out in the electronic form in a manner, prescribed by the National Bank.
   5. A license issued to banks for execution of banking and any other operations, set out in this Article, shall be issued by the authorized body.
 A positive opinion of the National Bank is required for issue of a license for the performance of bank operations, listed in subparagraphs 5), and 12) paragraph 2 and subparagraph 9) paragraph 11 of this Article.
 Issue of a license to banks for the performance of bank operations requires the opinion of the National Bank on availability of the automated banking system, compliant with the requirements to the accounting and general ledger automation. The procedure for issue of the opinion shall be defined by the National Bank.
  6. One or more types of bank operations, listed in paragraph 2 of this Article, may be carried out by an organization, which executes certain types of bank operations under the license of the authorized body or the National Bank, except for the cases when the legislative act of the Republic of Kazakhstan, which governs the activities of this organization, provides for the possibility to carry out the above mentioned operations without any license.
 Licenses to the organizations, which carry out certain types of bank operations, set out in paragraph 2 of this Article, shall be issued by the authorized body, except for the cases, set out in paragraph 7 of this Article.
A positive opinion of the National Bank is required for issue of a license for bank operations, listed in subparagraph 5) paragraph 2 of this Article.
 In the case if the legislative acts of the Republic of Kazakhstan, which regulate activities of the organizations, carrying out certain types of bank operations, provides the possibility to carry out bank operations, listed in subparagraphs 9)-12) paragraph 2 of this Article in combination with other bank operations, listed in paragraph 2 of this Article, the license shall be issued by the authorized body under the positive opinion of the National Bank.
  7. Licenses to the organizations, which carry out certain types of the bank operations, for the performance of the operation, listed in subparagraph 12) paragraph 2 of this Article, and to the legal entities, which core activity is the operation, mentioned in subparagraph 9) paragraph 2 of this Article, shall be issued by the National Bank.
  8. The procedure for licensing of bank operations and other transactions, carried out by banks and established by this Article, shall be defined by the normative legal act of the authorized body.