Kazakhstan intends to simplify entry of foreign banks into its market

The Agency for Regulation and Development of the Financial Market of Kazakhstan plans to liberalise requirements for foreign banks to enter the local market to attract foreign investors.

The agency intends to soften the requirements for the documents for obtaining permission to establish a financial institution. In addition, it will revise the calculation of the capitalisation ratio of banks to liabilities to non-residents (k7) and the coefficient for placing part of the banks' funds in domestic assets, while the risk limit per borrower on blank loans will be raised from 10 per cent to 25 per cent of the bank's funds, the agency told LS.

As specified in the agency, eight second-tier foreign bank subsidiaries operate in the business lending sector in Kazakhstan. Investors from the Middle East, Southeast Asia, Eastern Europe, CIS countries are interested in the banking sector of the country, the agency added.

According to the International Monetary Fund (IMF), Kazakhstan's economy will grow by 4.8 per cent in 2023. Despite general global instability, business activity in Kazakhstan is growing and inflation is gradually declining, experts say. The IMF recommendations urge the country to move closer to Western countries competing with Russia for influence over Kazakhstan.