On National Bank of the Republic of Kazakhstan

Updated Unofficial translation

The Law of the Republic of Kazakhstan, dated 30 March 1995, No. 2155.

      Unofficial translation

      Footnote. Title is in the new wording, the Preamble is excluded, throughout the text, the words “by the Decree”, “the Decree”, “the Decree” are replaced by the words “by the Law”, “the Law”, “the Law”- by the Law of the Republic of Kazakhstan, dated 2 March 2001, No. 162 (see Article 2).
      In the text, after the word “Chapter” numbers “I – ХIII” are replaced by the numbers “1 – 13” - by the Law of the Republic of Kazakhstan, dated 20 December 2004, No 13.
      Throughout the text, the word “(interest)” is excluded - by the Law of the Republic of Kazakhstan, dated 8 July 2005, No 69.

Chapter 1. GENERAL PROVISIONS

Article 1. Bank system of the Republic of Kazakhstan

      The Republic of Kazakhstan has a dual banking system.

      The National Bank of the Republic of Kazakhstan (National Bank of Kazakhstan) is the Central Bank of the Republic of Kazakhstan and represents the top (first) level of the bank system of the Republic of Kazakhstan.

      The National Bank of Kazakhstan shall represent the interests of the Republic of Kazakhstan in the relations with central banks and banks of other countries, in international banks and other financial and credit organizations within its competence.

      The National Bank of Kazakhstan, in case of accomplishment of the tasks shall not be guided by the purpose of profit earning.

      Types, a legal status, a procedure for creation, functioning and liquidation of second-tier banks are determined by the banking and other legislation of the Republic of Kazakhstan.

      Footnote. The Article 1 – as amended by the Decree of the President of the Republic of Kazakhstan, having the force of the Law, dated 5 December 1995, No. 2672; by the Law, dated 11 July 1997, No 154; by the Law of the Republic of Kazakhstan, dated 10 July 2003 No. 483; (shall be enforced from 1 January 2004).

Article 2. Status and legal basis of activities of the National Bank of Kazakhstan

      The National Bank of Kazakhstan is a state body that ensures the development and implementation of the monetary policy of the state, the functioning of payment systems, carries out currency regulation and control, state regulation, control over and supervision of the financial market and financial institutions, contributes to the stability of the financial system and maintains state statistics.

      The National Bank of Kazakhstan is governed by the Constitution of the Republic of Kazakhstan, this Law, other laws of the Republic of Kazakhstan, acts of the President of the Republic of Kazakhstan and international treaties of the Republic of Kazakhstan in its activities.

      Footnote. The Article 2 is in the wording of the Law of the Republic of Kazakhstan, dated 28.12.2011 No. 524 – IV (shall be enforced upon expiry of ten calendar days after its first official publication); as amended by Law of the Republic of Kazakhstan № 422-V as of 24.11.2015 (shall be enforced from 01.01.2016).

Article 3. Accountability of the National Bank of Kazakhstan

      The National Bank of Kazakhstan is accountable to the President of the Republic of Kazakhstan.

      The accountability to the President of the Republic of Kazakhstan means:

      appointment of the Chairman of the National Bank of Kazakhstan by the President of the Republic of Kazakhstan with the consent of the Senate of Parliament of the Republic of Kazakhstan;

      release him (her) from the position;

      approval of the structure and total number of employees of the National Bank of Kazakhstan by the President of the Republic of Kazakhstan;

      approval of the remuneration system for employees of the National Bank of Kazakhstan by the Executive Board of the National Bank of Kazakhstan in consultation with the President of the Republic of Kazakhstan;

      approval of the structure and a total regular number, remuneration system of the National Bank of Kazakhstan by the President of the Republic of Kazakhstan;

      approval of the Provision on the National Bank of Kazakhstan by the President of the Republic of Kazakhstan;

      approval of the annual statement of the National Bank of Kazakhstan by the President of the Republic of Kazakhstan;

      approval of the design concept of banknotes and coins of the national currency- the Kazakhstani tenge by the President of the Republic of Kazakhstan;

      representation by the National Bank of Kazakhstan, of the information concerning its competence, requested by the President of the Republic of Kazakhstan.

      Footnote. The Article 3 is in the wording of the Decree of the President of the Republic of Kazakhstan, having the force of the Law, dated 05.12.1995 No. 2672; as amended by the Laws of the Republic of Kazakhstan, dated 29.06.1998 No. 236; dated 02.03.2001 No. 162 (See Article 2); dated 08.07.2005 No. 69; dated 29.04.2009 No. 154-IV (the order of enforcement, see Article 2); № 91-VI as of 11.07.2017 (shall be enforced ten days after its first official publication).

Article 4. Regulatory legal acts of the National Bank of Kazakhstan

      The National Bank of Kazakhstan shall publish the regulatory legal acts concerning matters that fall under its authority, on the basis and in execution of the Laws of the Republic of Kazakhstan that shall be mandatory for all financial institutions, consumers of financial services, other legal entities and individuals on the territory of the Republic of Kazakhstan.

      Regulatory legal acts of the National Bank of Kazakhstan shall be published in the official publications – “Kazakstan Ulttyk Bankinin Khabarshysynda” and “Bulletin of the National Bank of the Republic of Kazakhstan” in Kazakh and Russian languages.

      Footnote. Article 4, as amended by the Laws of the Republic of Kazakhstan dated 11.07.1997 No. 154; dated 10.07.2003 No. 483 (shall be enforced from 01.01.2004); dated 05.07.2012 No. 30-V (shall be enforced upon expiry of ten calendar days after its first official publication).

The Article 5 (is excluded by the Law of the Republic of Kazakhstan dated 11 July 1997, No. 154)

Article 6. The National Bank of Kazakhstan as a legal entity

      The National Bank of Kazakhstan is a legal entity in organizational legal form of a republican state institution and has an independent balance sheet, and it shall comprise a single structure together with its branches, representative offices, and organizations.

      The National Bank of Kazakhstan acts on behalf of the Republic of Kazakhstan as the founder of joint stock companies and limited liability partnerships, and participates in the activities of organizations, as well as contributing the implementation of the functions of the National Bank of Kazakhstan, and (or) is the part of the financial market infrastructure.

      The central administration of the National Bank of Kazakhstan is located in Almaty city. The National Bank of Kazakhstan may open branch offices and representative offices in the Republic of Kazakhstan and outside its borders.

      Footnote. The Article 6 is in the wording of the Law of the Republic of Kazakhstan dated 05.07.2012 No. 30-V (shall be enforced upon expiry of ten calendar days after its first official publication).

Chapter 2. Main goal, objectives, functions and powers of the National Bank of Kazakhstan

      Footnote. Title is in the new wording of the Law of the Republic of Kazakhstan dated 10 July 2003 No. 483 (shall be enforced from 1 January 2004).

Article 7. Main goal and objectives of the National Bank of Kazakhstan

      The main goal of the National Bank of Kazakhstan is to ensure the price stability in the Republic of Kazakhstan.

      To accomplish the main goal, the National Bank of Kazakhstan shall be assigned the following objectives:

      1) development and implementation the state’s monetary policy;

      2) ensuring the functioning of payment systems;

      3) implementation of currency regulation and control;

      4) promoting the stability of the financial system;

      5) regulation, control and supervision of the financial market and financial organizations, as well as other persons within the jurisdiction;

      6) ensuring the adequate level of protection of the rights and legitimate interests of consumers of financial services;

      7) implementation of statistical activity in the field of monetary statistics and the statistics of external sector;

      8) other objectives in accordance with the laws of the Republic of Kazakhstan and the acts of the President of the Republic of Kazakhstan.

      Footnote. The Article 7 is in wording of the Law of the Republic of Kazakhstan dated 10.07.2003 No. 483 (shall be enforced from 01.01.2004); as amended by the Law of the Republic of Kazakhstan dated 05.07.2012 No. 30-V (shall be enforced upon expiry of ten calendar days after its first official publication).

Article 8. Functions and powers of the National Bank of Kazakhstan

      The National Bank of Kazakhstan shall:

      1) develop and implement the state monetary policy of the Republic of Kazakhstan;

      2) issue the state equity securities;

      3) be the sole issuer of banknotes and coins of the national currency of the Republic of Kazakhstan and organizes a cash circulation in the territory of the Republic of Kazakhstan;

      4) participate in providing transportation, storage and collection of banknotes, coins and values, create the reserve state funds of banknotes, coins and valuables;

      5) control the compliance of the financial institutions and their branches with the requirements to the unit premises;

      6) regulate and supervise (oversight) for the inter-bank money transfer system, a system of inter-bank clearing and other payment systems, which provide conducting of money transfers between users in Kazakhstani tenge;

      Note of the ILLI!
      Subparagraph 7) is meant to be amended by Law of the Republic of Kazakhstan № 422-V as of 24.11.2015 (shall be enforced from 16.12.2020).

      7) establish the priority of payments on bank accounts, carrying out by banks, organizations, implementing the certain types of bank operations and by the business entities, in order to streamline payments and money transfer in agreement with the Government of the Republic of Kazakhstan, unless otherwise provided by the Laws of the Republic of Kazakhstan;

      8) carry out the currency regulation and currency control in the Republic of Kazakhstan;

      9) is excluded by Law of the Republic of Kazakhstan № 156-VI as of 24.05.2018 (shall be enforced ten days after its first official publication);

      10) provide the management of assets in foreign currency and precious metals;

      11) implement a priority right of the state to purchase refined gold to replenish assets in precious metals;

      12) carry out in the cases, stipulated by the legislation of the Republic of Kazakhstan, routine tests of purity (samples) of precious metals and raw materials, containing precious metals;

      12-1) store and test precious metals, except for precious metal products, and assays (samples) of commodities containing precious metals owned by financial institutions, other persons entitled to export and import precious metals and commodities containing precious metals;

      12-2) carry out the transportation, reception, registration, storage of precious metals, precious stones and products, made of them that are converted (entered) into state property on certain grounds, in cases provided by the legislation of the Republic of Kazakhstan;

      13) carry out the regulation of system risks independently and (or) in partnership with other state bodies of the Republic of Kazakhstan within their competence;

      14) provide loans in the manner and on the conditions provided for by this Law and legal acts of the National Bank of Kazakhstan;

      15) participates in the regulation of the external debt of financial institutions;

      16) develop a statistical methodology and defines the list, forms, terms and the order of presentation of basic statistics on cash circulation, monetary and banking statistics, balance of payment, external debt, international and investment position, securement of financial stability;

      17) conduct departmental statistical survey in accordance with the statistical work plan, and also, within its competence, exercise control in the field of state statistics;

      18) generates and disseminates the statistical information on the review of the financial market, monetary and banking statistics, balance of payments, international and investment position, and external debt, participate in the development of predictive estimates of the balance of payments;

      19) carry out the regulation, control and supervision of the financial market and financial organizations, as well as other persons in accordance with this Law and other Laws of the Republic of Kazakhstan;

      20) license the activity in the financial field and activity, related to the concentration of financial resources;

      21) approve the rules of banking transactions in the cases, provided for by the Laws of the Republic of Kazakhstan;

      21-1) establish requirements for the design and content of a certificate of bank account’s availability and number and an account statement;

      22) is excluded by Law of the Republic of Kazakhstan № 422-V as of 24.11.2015 (shall be enforced from 01.01.2016);

      22-1) independently and (or) together with other state bodies of the Republic of Kazakhstan, within its competence, develop Islamic finance in accordance with international standards of Islamic financial instruments and Islamic financial services;

      23) determine the policy and methods of accounting for the National Bank of Kazakhstan in accordance with international financial reporting standards;

      Note of the ILLI!
      Subparagraph 24) is meant to be amended by Law of the Republic of Kazakhstan № 422-V as of 24.11.2015 (shall be enforced from 16.12.2020).

      24) exercise control over and supervision of the observance by financial institutions (except for legal entities whose exclusive activity is the collection of banknotes, coins and valuables) of the requirements of the legislation of the Republic of Kazakhstan on accounting and financial reporting and international financial reporting standards, as well as accounting automation rules;

      25) participate in servicing the state debt of the Government of the Republic of Kazakhstan in agreement with the latter and serve the state debt of the National Bank of Kazakhstan;

      26) establish and publish the official exchange rate of the national currency of the Republic of Kazakhstan to foreign currencies according to the list and the order, determined by the Board of the National Bank of Kazakhstan;

      27) monitor contracts for non-state foreign loans;

      28) monitor the sources of supply and demand, as well as the uses of foreign currency on the domestic market;

      29) carry out a banking activity without necessity to obtain corresponding licenses, professional activity in the securities market and other activity as defined by the Laws of the Republic of Kazakhstan;

      30) carry out a banking service of customers of the National Bank of Kazakhstan;

      31) carry out as trustee for the National Fund of the Republic of Kazakhstan on the basis of the trust management agreement, which is between the National Bank of Kazakhstan and the Government of the Republic of Kazakhstan and shall be published in official publications;

      32) serves as a trustee of assets on the basis of the trust management agreement, concluded by the National Bank of Kazakhstan and the Government of the Republic of Kazakhstan or legal entities. The trust management agreements, concluded between the National Bank of Kazakhstan and the Government of the Republic of Kazakhstan shall be published in official publications;

      32-1) carry out the trust management of the pension assets of uniform pension savings fund under a trust management agreement, concluded between the National Bank of Kazakhstan and uniform pension savings fund;

      32-2) carry out the functions of a custodian in respect of pension assets of uniform pension savings fund;

      33) provide, upon the request of the authorized body for financial monitoring, data from its own information systems in accordance with the legislation of the Republic of Kazakhstan on combating the legalization (laundering) of proceeds from crime and the financing of terrorism;

      Note of the ILLI!
      Subparagraph 34) is meant to be amended by Law of the Republic of Kazakhstan № 422-V as of 24.11.2015 (shall be enforced from 16.12.2020).

      34) participate in the training and retraining of personnel for state bodies and financial institutions;

      35) subject financial and other institutions to limited enforcement measures, supervisory response measures, sanctions and other measures provided for by the laws of the Republic of Kazakhstan, in case of their violation of the requirements of laws and other regulatory legal acts of the Republic of Kazakhstan with regard to issues within its competence;

      35-1) introduce a special regulatory regime in relation to financial institutions and (or) other legal entities and regulate their activities;

      36) carry out procurement of goods, works and services in the manner, specified by regulatory legal acts of the National Bank of Kazakhstan;

      37) set, cancel and define the use of bank identification codes, assign and revoke codes of banks and organizations, engaged in certain types of banking operations, and codes of branches of banks and organizations, engaged in certain types of banking operations, establish their structure, as well as develop and maintain the Directory of banks and organizations, engaged in certain types of banking operations;

      37-1) is excluded by Law of the Republic of Kazakhstan № 53-VI as of 13.03.2017 (shall be enforced ten days after its first official publication);

      38) establish consultative and advisory bodies of the National Bank of Kazakhstan;

      38-1) provide information on subjects of a credit history to a credit bureau partially owned by the government in order to ensure the completeness of information contained in the database of credit histories;

      39) carry out other functions and powers under this Law, other laws of the Republic of Kazakhstan and the acts of the President of the Republic of Kazakhstan.

      Footnote. Article 8 is in the wording of the Law of the Republic of Kazakhstan dated 05.07.2012 No. 30-V (shall be enforced upon expiry of ten calendar days after its first official publication); as amended by the Law of the Republic of Kazakhstan, dated 21.06.2013 No. 106-V (shall be enforced upon expiry of ten calendar days after its first official publication); № 206-V as of 10.06.2014 (shall be enforced ten days after its first official publication); № 311-V as of 27.04.2015 (see the enforcement procedure in Article 2); № 422-V as of 24.11.2015 (shall be enforced from 01.01.2016); № 12-VІ as of 26.07.2016 (shall be enforced thirty days after its first official publication); № 53-VI as of 13.03.2017 (shall be enforced ten days after its first official publication); № 156-VI as of 24.05.2018 (shall be enforced ten days after its first official publication); № 168-VІ as of 02.07.2018 (see the enforcement procedure in Article 2).

Chapter 3. Capital and reserves of the National Bank of Kazakhstan

      Footnote. Title of the Chapter is in the wording of the Law of the Republic of Kazakhstan, dated 16 July 1999 No. 436.

Article 9. Charter capital of the National Bank of Kazakhstan

      The charter capital of the National Bank of Kazakhstan belongs to the state and shall be created in an amount not less than 20 billion Kazakhstani tenge by payments from undivided net income.

      The National Bank of Kazakhstan shall independently exercise the rights of possession, use, and disposition of property on its balance sheet on behalf of the Republic of Kazakhstan, in accordance with the procedure, established by the regulatory legal acts of the National Bank of Kazakhstan.

      Footnote. Article 9, as amended by the Laws of the Republic of Kazakhstan, dated 11July, 1997 No. 154; dated 29 June, 1998 No. 236; dated 16 July 1999 No. 436; dated 10 July, 2003 No. 483 (shall be enforced from 1January, 2004); dated 8 July, 2005 No. 69; dated 5 July 2006 No. 165 (the order of enforcement see Article 2); dated 01.03.2011 No. 414-IV (shall be enforced from the date of its first official publication).

Article 10. Reserve capital, revaluation and provision (reserves) accounts of the National Bank of Kazakhstan

      Footnote. Title is in the new wording of the Law of the Republic of Kazakhstan dated № 422-V as of 24.11.2015 (shall be enforced from 01.01.2016).

      Reserve capital of the National Bank of Kazakhstan shall be formed in the amount not less than the charter capital; it shall be replenished out of net income, and shall be intended solely to provide compensation of losses and reimbursement of losses on operations, performed in compliance with procedure, established by the Executive Board of the National Bank of Kazakhstan. The revaluation account of gold and foreign currency reserves and other assets in foreign currency is intended for the accounting of revenue from their revaluation. The revaluation account for fixed assets shall be intended for recording the results of indexing of fixed assets of the National Bank of Kazakhstan.

      Provisions (reserves) for doubtful and bad claims, including loans, deposits, securities, settlement-related losses, account balances and other assets, including volumes of works on construction in progress, other requirements for non-monetary activities of the National Bank of Kazakhstan and social payments are created at the expense of the National Bank of Kazakhstan.

      Footnote. Article 10 is in the wording of the Law dated 05.07.2012 No. 30-V (shall be enforced upon expiry of ten calendar days after its first official publication); as amended by Law of the Republic of Kazakhstan № 422-V as of 24.11.2015 (shall be enforced from 01.01.2016).

Article 11. Income of the National Bank of Kazakhstan

      Net income of the National Bank of Kazakhstan for a financial year shall be defined as the difference between actually received income and costs charged to the given financial year.

      Undivided net income of the National Bank of Kazakhstan is the net income of the National Bank of Kazakhstan, except to the exchange rate revaluation, relevant to the revaluation of gold reserves and other foreign currency assets, adjusted for the revaluation of fixed assets and intangible assets. Undivided net income shall be intended to increase a reserve and charter capitals in the amount, established by the Board of the National Bank of the Republic of Kazakhstan.

      After the approval of the annual report of the National Bank of Kazakhstan by the President of the Republic of Kazakhstan, the remaining undistributed net income shall be transferred to the state budget with a one financial year grace period.

      Note of the ILLI!
      This version of part four is in force until 01.01.2023 in accordance with Law of the Republic of Kazakhstan № 168-VІ as of 02.07.2018 (see the suspended version in the archival version of Law of the Republic of Kazakhstan “On the National Bank of the Republic of Kazakhstan” as of 24.05.2018 ).

      In case, if the amount of reserve capital is less than the amount of the charter capital, the entire undivided net income remains in possession of the National Bank of Kazakhstan and shall be addressed to the replenishment of the reserve capital until it reaches the size of charter capital. If funds of the capital reserve are insufficient to compensate losses of the financial year, the accumulated losses shall be compensated by the National Bank of Kazakhstan in full at the expense of the state budget with a one financial year grace period.

      Footnote. Article 11 is in the wording of the Law of the Republic of Kazakhstan, dated 10.07.2003 No. 483 (shall be enforced from 01.01.2004); as amended by the Law of the Republic of Kazakhstan, dated 08.07.2005.No. 69; dated 11.07.2009 No. 185-IV (shall be enforced from 30.08.2009); dated 05.07.2012 No. 30-V (shall be enforced upon expiry of ten calendar days after its first official publication).

Chapter 4. Structure and bodies of the National Bank of Kazakhstan. The order of their formation and competence

      Footnote. Title is in the wording of the Law of the Republic of Kazakhstan, dated 16 July 1999, No. 436.

Article 12. Structure and bodies of the National Bank of Kazakhstan

      The National Bank of Kazakhstan shall hold out a single centralized structure with a vertical administrative system.

      The bodies of the National Bank of the Republic of Kazakhstan shall be the Executive Board and Board of Directors (the Directorate).

      The structure of the National Bank of Kazakhstan shall include the central administration, consisting of departments and other subdivisions, branch offices, representative offices, agencies and organizations.

      Footnote. Part 3 is excluded by the Decree of the President of the Republic of Kazakhstan, having the force of the Law, dated 27 January 1996, No. 2830; as amended by the Laws of the Republic of Kazakhstan, dated 11.07.1997 No. 154; dated 16.07.1999 No. 436; dated 05.07.2012 No. 30-V (shall be enforced upon expiry of ten calendar days after its first official publication).

Article 13. Chairman of the National Bank of Kazakhstan

      The Chairman of the National Bank of Kazakhstan shall be appointed by the President of the Republic of Kazakhstan with the approval of the Senate of the Parliament for a term of 6 years.

      The Chairman shall act on behalf of and represents the National Bank of Kazakhstan without a power of attorney in relations with state bodies, banks, financial, international, foreign, and other organizations.

      The Chairman of the National Bank of Kazakhstan shall have the power to adopt operative, executive and administrative decisions concerning the activities of the National Bank of Kazakhstan, with the exception of powers, warranted by this Law to the Executive Board of the National Bank of Kazakhstan and to conclude agreements on behalf of the National Bank of Kazakhstan.

      The Chairman of the National Bank of Kazakhstan shall bear responsibility for the operation of the National Bank of Kazakhstan.

      Footnote. Article 13 as amended by the Decree of the President of the Republic of Kazakhstan, having the force of the Law, dated 04.12.1995 No. 2672; dated 27.01.1996 No. 2830; by the Laws of the Republic of Kazakhstan, dated 11.07.1997 No. 154; dated 29.04.2009 No. 154-IV (the order of the enforcement, see Article 2).

Article 14. Deputy Chairmen of the National Bank of Kazakhstan

      Deputy Chairmen of the National Bank of Kazakhstan shall be appointed by the President of the Republic of Kazakhstan upon the recommendation of the Chairman of the National Bank of Kazakhstan for a term of 6 years, regardless the terms of the appointment of the Chairman of the National Bank of the Republic of Kazakhstan.

      Deputy Chairmen shall represent the National Bank of Kazakhstan without a power of attorney and shall sign documents within the limits of their authority.

Article 15. Executive Board of the National Bank of Kazakhstan and its powers

      The Supreme body of the National Bank of Kazakhstan is the Executive Board.

      Note of the ILLI!
      It is intended to amend part two by Law of the Republic of Kazakhstan № 422-V as of 24.11.2015 (shall be enforced from 16.12.2020).

      The Executive Board of the National Bank of Kazakhstan shall approve:

      1) rules on the minimum reserve requirements, including the structure of banks’ liabilities, for calculating the minimum reserve requirements, the procedure for calculating the minimum reserve requirements, fulfilling the minimum reserve requirements, reserving and monitoring the fulfillment of the minimum reserve requirements;

      2) rules for setting the official exchange rate of the national currency of the Republic of Kazakhstan to foreign currencies according to the list determined by the Executive Board of the National Bank of Kazakhstan;

      3) rules for exchanging banknotes and coins of the national currency of the Republic of Kazakhstan (being) taken out of circulation, as well as worn and damaged banknotes and coins of the national currency of the Republic of Kazakhstan;

      4) rules for the sale and repurchase of banknotes and coins of the national currency of the Republic of Kazakhstan by the National Bank of Kazakhstan;

      5) rules for making cash transactions with individuals and legal entities in the National Bank of Kazakhstan;

      6) rules for determining whether banknotes and coins of the national currency of the Republic of Kazakhstan are fit for commerce;

      7) rules for accounting, storage, transportation and collection of banknotes, coins and valuables;

      8) rules for replacing current banknotes and coins of the national currency of the Republic of Kazakhstan in case of alteration of their design (form);

      9) rules for taking cash out of circulation;

      10) rules for cash transactions and operations of collection of banknotes, coins and valuables in banks and organizations carrying out certain types of banking operations;

      11) in consultation with relevant authorized bodies, the rules for security arrangements and space planning and furnishing of banks and organizations carrying out certain types of banking operations;

      12) requirements for the activity on counting, sorting, packing, storing banknotes, coins and valuables, and also on their delivery to banks and their customers on banks’ instructions, which is carried out by organizations licensed by the National Bank of Kazakhstan to perform operations of collection of banknotes, coins and valuables;

      13) rules for issuing licenses to organizations carrying out certain types of banking operations for the collection of banknotes, coins and valuables;

      14) instruction on the organization of cash-in-transit services in the Republic of Kazakhstan;

      15) rules for making transactions with foreign currency converted into state ownership on separate grounds in the National Bank of Kazakhstan;

      16) rules for the functioning of the interbank money transfer system;

      17) rules for the functioning of the interbank clearing system;

      18) rules for the functioning of payment systems operated either by the National Bank of Kazakhstan or its subsidiary;

      19) rules for the functioning of the interbank payment card system;

      20) requirements for organizational measures and software and hardware that provide access to payment systems;

      21) is excluded by Law of the Republic of Kazakhstan № 12-VІ as of 26.07.2016 (shall be enforced thirty calendar days after its first official publication);
      22) is excluded by Law of the Republic of Kazakhstan № 12-VІ as of 26.07.2016 (shall be enforced thirty calendar days after its first official publication);
      23) is excluded by Law of the Republic of Kazakhstan № 12-VІ as of 26.07.2016 (shall be enforced thirty calendar days after its first official publication);

      24) rules for using checks in the territory of the Republic of Kazakhstan;

      25) rules for making transactions with documentary letters of credit by the banks of the Republic of Kazakhstan;

      26) rules for discounting bills by second-tier banks of the Republic of Kazakhstan;

      27) rules for making transactions with bills of exchange and promissory notes by second-tier banks and organizations carrying out certain types of banking operations;

      28) rules for the issuance of payment cards, as well as requirements for the activity on servicing transactions with their use in the territory of the Republic of Kazakhstan;

      29) rules for making interbank payments and (or) money transfers using payment cards in the Republic of Kazakhstan;

      30) is excluded by Law of the Republic of Kazakhstan № 12-VІ as of 26.07.2016 (shall be enforced thirty calendar days after its first official publication);

      31) rules for the trust management of customer assets by the National Bank of Kazakhstan;

      32) rules for the brokerage activity of the National Bank of Kazakhstan;

      33) rules for the dealer activity of the National Bank of Kazakhstan;

      34) rules for making foreign currency conversion and reconversion transactions for its customers by the National Bank of Kazakhstan;

      35) is excluded by Law of the Republic of Kazakhstan № 168-VІ as of 02.07.2018 (shall be enforced ten calendar days after its first official publication);

      36) rules for making transactions with derivative financial instruments by the National Bank of Kazakhstan;

      37) rules for making transactions with foreign currency in cash by the National Bank of Kazakhstan;

      38) rules for conducting auctions, as part of its monetary policy, by the National Bank of Kazakhstan;

      39) rules for transferring part of the gold and foreign currency assets of the National Bank of Kazakhstan into external management;

      40) is excluded by Law of the Republic of Kazakhstan № 12-VІ as of 26.07.2016 (shall be enforced thirty calendar days after its first official publication);
      41) is excluded by Law of the Republic of Kazakhstan № 12-VІ as of 26.07.2016 (shall be enforced thirty calendar days after its first official publication);

      42) rules for issuing, using and cancelling electronic money, as well as requirements for issuers of electronic money and electronic money systems in the territory of the Republic of Kazakhstan;

      43) requirements for the degrees of security of billhead paper produced in or imported into the territory of the Republic of Kazakhstan, as well as technical requirements for billhead paper;

      44) rules for opening, maintaining and closing customer bank accounts;

      45) is excluded by Law of the Republic of Kazakhstan № 168-VІ as of 02.07.2018 (shall be enforced ten calendar days after its first official publication);
      46) is excluded by Law of the Republic of Kazakhstan № 12-VІ as of 26.07.2016 (shall be enforced thirty calendar days after its first official publication);

      47) rules for applying economic sector and payment purpose codes;

      48) rules on loans of last resort provided by the National Bank of Kazakhstan;

      49) rules for establishing correspondent banking relations between the National Bank of Kazakhstan and banks, as well as organizations carrying out certain types of banking operations;

      50) rules for establishing interbank correspondent relations, and also relations between banks and organizations carrying out certain types of banking operations;

      Note of the ILLI!
      It is intended to amend subparagraph 51) by Law of the Republic of Kazakhstan № 262-VI as of 03.07.2019 (shall be enforced from 16.12.2020).

      51) the maximum amount of payments and money transfers in correspondent accounts of banks and organizations carrying out certain types of banking operations;

      52) requirements for the design and content of a certificate of bank account’s availability and number and an account statement;

      52-1) rules for organizing the activity of payment institutions;

      52-2) rules for providing information on payments and (or) money transfers by the operator or operating center of a systemically important or important payment system;

      52-3) rules for making non-cash payments and (or) money transfers in the territory of the Republic of Kazakhstan;

      52-4) rules for providing electronic banking services by banks and organizations carrying out certain types of banking operations;

      Note of the ILLI!
      It is intended to amend subparagraph 52-4) by Law of the Republic of Kazakhstan № 262-VI as of 03.07.2019 (shall be enforced from 16.12.2020).

      52-5) rules for submitting information about payment services;

      52-6) rules for maintaining the register of important payment service providers;

      52-7) rules for maintaining the register of payment systems;

      52-8) indicators of the criteria of important payment systems;

      52-9) indicators to classify a payment service provider as an important payment service provider;

      53) rules for classifying financial institutions as system-forming ones;

      54) is excluded by Law of the Republic of Kazakhstan № 156-VI as of 24.05.2018 (shall be enforced ten calendar days after its first official publication);

      55) regulatory legal acts regulating the activity of the financial market and financial institutions, as well as other persons in accordance with this Law and other laws of the Republic of Kazakhstan;

      56) regulatory legal acts regulating the activity of the Astana International Financial Center;

      57) is excluded by Law of the Republic of Kazakhstan № 168-VІ as of 02.07.2018 (shall be enforced from 01.07.2019);

      57-1) rules for monitoring foreign exchange transactions in the Republic of Kazakhstan;

      58) rules for organizing exchange operations with foreign currency in cash in the Republic of Kazakhstan;

      59) rules for making currency transactions in the Republic of Kazakhstan;

      59-1) rules for monitoring sources of supply and demand in the domestic foreign exchange market of the Republic of Kazakhstan;

      60) rules for the export-import currency control in the Republic of Kazakhstan;

      61) rules for submitting information by branches (representative offices) of foreign non-financial institutions operating in the Republic of Kazakhstan;

      62) rules for banks’ opening, maintaining and closing metal accounts;

      63) regulatory legal acts on accounting issues, including standard charts of accounts, accounting instructions, accounting organization rules and accounting automation rules that are binding on all financial institutions, microfinance organizations, the Development Bank of Kazakhstan;

      64) financial reporting standards on issues not regulated by international financial reporting standards, as well as guidelines thereto;

      65) rules for submitting financial statements by financial institutions, microfinance organizations, which determine the procedure for their submission, including the forms, list, frequency and timing of their submission;

      65-1) reporting terms, procedure and form by a collection agency;

      66) rules for the publication of financial statements by joint-stock companies and financial institutions that determine the procedure for their publication, including the list of financial statements subject to publication and the timing of their publication;

      67) accounting policy for the accounting of trust management operations of the assets of the National Fund of the Republic of Kazakhstan;

      Note of the ILLI!
      It is intended to amend subparagraph 68) by Law of the Republic of Kazakhstan № 262-VI as of 03.07.2019 (shall be enforced from 16.12.2020).

      68) in consultation with the authorized body responsible for the management of tax revenues and other obligatory payments to the budget, the form and content of a check voucher of hardware and software systems used by banks and organizations carrying out certain types of banking operations;

      68-1) rules for the creation of provisions (reserves) in accordance with international financial reporting standards and the requirements of the legislation of the Republic of Kazakhstan on accounting and financial reporting;

      69) regulatory legal acts on the collection of administrative data on currency regulation, the formation of a financial sector review from financial institutions, cash circulation, payments and money transfers, financial stability, regulation, control over and supervision of financial institutions, credit bureaus, microfinance organizations and collection agencies, including the instructions on data submission by second-tier banks, the Development Bank of Kazakhstan and mortgage organizations to the National Bank of Kazakhstan for drawing up a financial sector review;

      69-1) rules for introducing and abolishing a special regulatory regime, carrying out activities under a special regulatory regime;

      69-2) criteria for selection and the procedure for considering documents for concluding an agreement on operating under a special regulatory regime;

      70) in consultation with the central authorized body for budget execution, the rules for making investment transactions of the National Fund of the Republic of Kazakhstan, as well as a report on the results of trust management of the National Fund of the Republic of Kazakhstan submitted to the Government of the Republic of Kazakhstan;

      71) rules for converting or reconverting assets of the National Fund of the Republic of Kazakhstan;

      72) rules for selecting external asset managers of the National Fund of the Republic of Kazakhstan;

      73) rules for exercising the state’s priority right to acquire fine gold to replenish assets in precious metals;

      74) rules for appointing to a post and terminating an employment contract with employees of the National Bank of Kazakhstan and its departments;

      75) rules for purchasing goods, works and services by the National Bank of Kazakhstan, its departments, organizations included in its structure, and legal entities, whose fifty or more percent of voting shares (participatory interests in the authorized capital) belong to the National Bank of Kazakhstan or are in its trust management, and by legal entities affiliated with them;

      76) the regulation on the internal audit unit, as well as the procedure for organizing and conducting internal audit at the National Bank of Kazakhstan;

      77) instructions on the assignment, use and cancellation of bank identification codes by the National Bank of Kazakhstan, as well as the assignment and cancellation of codes of banks and organizations carrying out certain types of banking operations, and codes of branches of banks and organizations carrying out certain types of banking operations, their structure, formation and maintaining the Directory of banks and organizations carrying out certain types of banking operations;

      78) the investment declaration of the unified accumulative pension fund, as well as alterations and additions to it;

      79) rules for the selection of investment portfolio managers operating on the basis of a license of the National Bank of Kazakhstan, including requirements thereto, when they are instructed to take actions required for the management of pension assets of the unified accumulative pension fund;

      80) rules for selecting foreign organizations managing pension assets of the unified accumulative pension fund, including the requirements thereto, when they are instructed to take actions required for the management of pension assets of the unified accumulative pension fund;

      81) the list of financial products, the approval of which is reported by a financial institution to the National Bank of Kazakhstan;

      82) the regulations of the National Bank of Kazakhstan;

      Note of the ILLI!
      It is intended to amend subparagraph 83) by Law of the Republic of Kazakhstan № 168-VІ as of 02.07.2018 (shall be enforced from 16.12.2020).

      83) the procedure for notifying the National Bank of Kazakhstan of the approval of financial products by financial institutions, as well as a list of documents attached to the notification;

      84) the list of commission fees and other payments related to the issuance and servicing of bank loans and microloans given to individuals taken into account when calculating the effective annual interest rate;

      85) requirements for the security and continuity of work of information systems of banks and organizations carrying out certain types of banking operations;

      86) methods for calculating regular payments on loans and microloans given by banks, organizations carrying out certain types of banking operations, and microfinance organizations to individuals and providing for a repayment schedule, as well as temporary bases for calculating interest on such loans (microloans);

      86-1) requirements for ensuring information security of banks and organizations carrying out certain types of banking operations, the procedure and deadlines for providing information on information security incidents, including information about disruptions, failures in information systems;

      86-2) rules for calculating the effective annual interest rate under a loan agreement;

      86-3) calculation rules, conditions for the effectiveness of a floating interest rate under bank deposit agreements;

      87) is excluded by Law of the Republic of Kazakhstan № 53-VI as of 13.03.2017 (shall be enforced ten calendar days after its first official publication);

      88) other regulatory legal acts of the National Bank of Kazakhstan in accordance with this Law, other laws of the Republic of Kazakhstan and acts of the President of the Republic of Kazakhstan.

      The Executive Board of the National Bank of Kazakhstan shall:

      1) approve the state monetary policy;

      2) set the official refinancing rate;

      3) set standards for minimum reserve requirements;

      4) make decisions on the manufacture, issuance, withdrawal of banknotes and coins of the national currency of the Republic of Kazakhstan, also at the request of other countries, the replacement of banknotes and coins of the national currency of the Republic of Kazakhstan in case of alteration of their design or form, and also establish the procedure for exchanging worn and damaged banknotes and coins of the national currency of the Republic of Kazakhstan;

      4-1) set the period of parallel circulation of banknotes and coins of the national currency of the Republic of Kazakhstan in case of alteration of their design (form);

      5) determine the nominal value and design of banknotes and coins based on the concept approved by the President of the Republic of Kazakhstan;

      6) determine the theme, mintage, alloy, timing and date of issue of collection and investment coins;

      7) set the currency fluctuation band for the buying rate and the selling rate of foreign currency for tenge with regard to transactions made at exchange offices;

      8) set the amount of and procedure for the formation of the authorized capital for authorized organizations;

      9) determine the basic principles of asset management in foreign currency and precious metals, including their structure;

      10) classify an activity as a monetary one;

      11) determine the categories of legal entities served by the National Bank of Kazakhstan;

      12) consider, approve and submit for approval by the President of the Republic of Kazakhstan the annual report on the work of the National Bank of Kazakhstan;

      13) consider, approve and submit for approval to the President of the Republic of Kazakhstan the structure, the total number of employees of the National Bank of Kazakhstan and the Regulation on the National Bank of Kazakhstan, as well as alterations and additions thereto;

      13-1) approve, in consultation with the President of the Republic of Kazakhstan, the remuneration system for employees of the National Bank of Kazakhstan;

      14) approve the budget (cost estimate) of the National Bank of Kazakhstan;

      15) consider and approve the annual consolidated financial statements of the National Bank of Kazakhstan;

      16) approve the terms of remuneration of employees of the National Bank of Kazakhstan, its departments and organizations and the conditions of social security of employees of the National Bank of Kazakhstan and its departments;

      17) appoint an official, who shall be at least a Deputy Chairman of the National Bank of Kazakhstan, entitled to make prompt decisions on trust management of the National Fund of the Republic of Kazakhstan (authorized representative);

      18) determine the procedure for applying limited enforcement measures, supervisory response measures, sanctions and other measures provided for by laws of the Republic of Kazakhstan to financial and other institutions, if they violate the requirements of laws and other regulatory legal acts of the Republic of Kazakhstan with regard to issues within its competence;

      19) consider the granting of loans of last resort in the manner and on the conditions provided for by this Law and the regulatory legal act of the National Bank of Kazakhstan;

      20) make decisions on the establishment of and participation in the activities of organizations, including those helping the National Bank of Kazakhstan perform functions assigned to it and (or) those that are part of the financial market infrastructure;

      21) decide on the participation of the National Bank of Kazakhstan in international and other organizations in accordance with this Law;

      21-1) decide on the introduction of a special regulatory regime;

      21-2) approve a model agreement on the implementation of activities under a special regulatory regime;

      21-3) consider and approve an agreement on the implementation of activities under a special regulatory regime;

      22) decide on the establishment of advisory bodies of the National Bank of Kazakhstan;

      23) approve a medium-term audit plan and annual report of the internal audit unit;

      23-1) determine foreign custodians, with which the National Bank of Kazakhstan opens accounts for accounting and storage of pension assets of the unified accumulative pension fund;

      24) carry out other functions and powers provided for by this Law, other laws of the Republic of Kazakhstan and acts of the President of the Republic of Kazakhstan.

      Footnote. Article 15 is in the wording of the Law of the Republic of Kazakhstan, dated 05.07.2012 No. 30-V (shall be enforced upon expiry of ten calendar days after its first official publication); as amended by the Laws of the Republic of Kazakhstan, dated 26.11.2012 No. 57-V (shall be enforced upon expiry of ten calendar days after its first official publication); dated 21.06.2013 No. 106-V (shall be enforced upon expiry of ten calendar days after its first official publication); № 203-V as of 16.05.2014 (shall be enforced six months after its first official publication); № 269-V as of 29.12.2014 (shall be enforced from 01.01.2015); № 422-V as of 24.11.2015 (see the enforcement procedure in Article 2); № 479-V as of 29.03.2016 (shall be enforced twenty-one calendar days after its first official publication); № 12-VІ as of 26.07.2016 (shall be enforced thirty calendar days after its first official publication); № 53-VI as of 13.03.2017 (shall be enforced ten calendar days after its first official publication); № 63-VI as of 06.05.2017 (shall be enforced twenty-one calendar days after its first official publication); № 91-VI as of 11.07.2017 (shall be enforced ten calendar days after its first official publication); № 128-VI as of 28.12.2017 (shall be enforced ten calendar days after its first official publication); № 156-VI as of 24.05.2018 (shall be enforced ten calendar days after its first official publication); № 168-VІ as of 02.07.2018 (see the enforcement procedure in Article 2).

Article 16. Composition of the Executive Board of the National Bank of Kazakhstan

      Executive Board of the National Bank of Kazakhstan consists of nine members.

      The Executive Board of the National Bank of Kazakhstan consists of the Chairman of the National Bank of Kazakhstan and five officials of the National Bank of Kazakhstan, one representative of the President of the Republic of Kazakhstan and two representatives of the Government of the Republic of Kazakhstan.

      Members of the Executive Board of the National Bank of Kazakhstan from the President of the Republic of Kazakhstan, the Government of the Republic of Kazakhstan and the National Bank of Kazakhstan shall be appointed and dismissed respectively by the President of the Republic of Kazakhstan, the Government of the Republic of Kazakhstan and the Chairman of the National Bank of Kazakhstan.

      Footnote. Article 16 is in the wording of the Decree of the President of the Republic of Kazakhstan, having the force of the Law, dated 5 December 1995, No. 2672; as amended by the Laws of the Republic of Kazakhstan, dated 11.07.1997 No. 154; dated 05.07.2006 No. 165 (the order of the enforcement, see Article 2); dated 05.07.2012 No. 30-V (shall be enforced upon expiry of ten calendar days after its first official publication).

Article 17. Executive Board session of the National Bank of Kazakhstan

      Executive Board Sessions of the National Bank of the Republic of Kazakhstan are held as and when needed, but not less once every month.

      Extraordinary sessions of the Executive Board of the Bank of Kazakhstan are held at the request of the Chairman of the National Bank of Kazakhstan or three Executive Board members.

      Executive Board members of the National Bank of Kazakhstan are notified timely of the appointment of the Executive Board session.

      Executive Board session of the National Bank of Kazakhstan shall be conducted by the Chairman of the National Bank of Kazakhstan and in case of his (her) absence – an individual, replacing him (her).

      The Executive Board is authorized to take a decision with the participation of at least two thirds of Executive Board members, including the Chairman of the National Bank of Kazakhstan, or an individual, replacing him (her).

      The Executive Board decision shall be taken by a simple majority vote of Executive Board members. In case of equality of votes, the vote of the Chairman of the National Bank of Kazakhstan shall be casting.

      No later than one week term the Chairman of the National Bank of Kazakhstan has a right to return the Executive Board decision with his (her) objections for a second discussion and voting. If the Executive Board confirms the earlier decision by two-thirds of Executive Board members, the Chairman of the National Bank of Kazakhstan shall sign the decision.

      Footnote. Article 17, as amended by the Laws of the Republic of Kazakhstan dated 11 July 1997 No. 154; dated 16 July 1999 No. 436.

Article 18. Resignation and termination of appointment

      The Chairman of the National Bank of Kazakhstan shall have the right to resign by submitting his (her) written application two months before retiring, to the President of the Republic of Kazakhstan.

      The Chairman of the National Bank of Kazakhstan shall be dismissed by the President of the Republic of Kazakhstan.

      Deputies of the Chairman shall be dismissed by the President of the Republic of Kazakhstan on presentation of the Chairman of the National Bank of Kazakhstan.

      Deputies may resign by submitting a written application to the President of the Republic of Kazakhstan, through the Chairman of the National Bank of Kazakhstan for two months before retiring.

      Footnote. Article 18 – as amended by the Decree of the President of the Republic of Kazakhstan, having the force of the Law, dated 5 December 1995 No. 2672.

Article 19. Board of Directors of the National Bank of Kazakhstan and its powers

      The Board of Directors (Directorate) of the National Bank of Kazakhstan is the operational management of the National Bank of Kazakhstan.

      The Board of Directors consists of the Chairman of the National Bank of Kazakhstan, his (her) deputies, heads of structural subdivisions and departments of the National Bank of Kazakhstan, on the presentation of the Chairman of the National Bank of Kazakhstan. Panel of the Board of Directors of the National Bank of Kazakhstan shall be approved by the Chairman of the National Bank of Kazakhstan.

      The Chairman of the National Bank of Kazakhstan shall preside at sessions of the Board of Directors. On his behalf, the Board session may be led by the Deputy Chairman of the National Bank of Kazakhstan.

      The Board of Directors, in accordance with this Law, shall take decisions on issues within the jurisdiction of the National Bank of Kazakhstan, except for those issues that fall within the competence of the Board and the Chairman of the National Bank of Kazakhstan (or his (her) deputies).

      The Board of Directors shall adopt resolutions on issues within its competence.

      The Board of Directors determines procedures for accounting and preparation of separate and consolidated financial statements of the National Bank of Kazakhstan, as well as the accounting and financial reporting of the National Fund of the Republic of Kazakhstan.

      Footnote. Article 19 as amended by the Decree of the President of the Republic of Kazakhstan, having the force of the Law, dated 4 December 1995 No. 2672; by the Laws of the Republic of Kazakhstan dated 11 July 1997 No. 154; dated 16 July 1999 No. 436; dated 2 March 2001 No. 162 (see Article 2); dated 10 July 2003 No. 483 (shall be enforced from 1 January 2004); dated 05.07.2012 No. 30-V(shall be enforced upon expiry of ten calendar days after its first official publication); № 422-V as of 24.11.2015 (shall be enforced from 01.01.2016).

Article 20. Branches, representative offices, departments and organizations of the National Bank of Kazakhstan

      Footnote. Title of Article 20 is in the wording of the Law of the Republic of Kazakhstan dated 05.07.2012 No. 30-V (shall be enforced upon expiry of ten calendar days after its first official publication).

      Branches, representative offices and departments of the National Bank of the Republic of Kazakhstan conduct its activities within the limits of their powers, established by the National Bank of Kazakhstan.

      Organizations of the National Bank of Kazakhstan are legal entities are established and terminate its activities in accordance with the legislative acts, with the specifications established by this Law.

      National Bank of Kazakhstan shall decide on the establishment, reorganization and liquidation of his organizations, and shall be their founder and authorized state body, functioning as the owner of state owned assets, including the power to regulate their activities and making decisions to change the legal status of these organizations.

      Footnote. Article 20, as amended by the Laws of the Republic of Kazakhstan dated 27.01.1996 N. 2830; dated 11.07.1997 No. 154; dated 01.03.2011 No. 414-IV (shall be enforced from the date of its first official publication); dated 05.07.2012 No. 30-V (shall be enforced upon expiry of ten calendar days after its first official publication).

Chapter 4-1. EMPLOYEES OF THE NATIONAL BANK OF KAZAKHSTAN AND ITS DEPARTMENTS

      Footnote. The Law is supplemented by Chapter 4-1 in accordance with the Law of the Republic of Kazakhstan dated 05.07.2012 No. 30-V (shall be enforced upon expiry of ten calendar days after its first official publication).

Article 20-1. Composition of positions of employees of the National Bank of Kazakhstan and its departments and the regulation of their employment

      Employees of the National Bank of Kazakhstan and its departments are persons, not related to the administrative state and civil servants, holding the positions at the National Bank of Kazakhstan and its departments, and the remuneration to them is paid from the budget (cost estimates) of the National Bank of Kazakhstan.

      The composition of positions of employees of the National Bank of Kazakhstan and its departments shall include the positions:

      1) political civil servants;

      2 ) employees of the National Bank of Kazakhstan and its departments;

      3) technical employees of the National Bank of Kazakhstan and its departments.

      Employees of the National Bank of Kazakhstan and its departments are persons that are not related to civil servants, and performing official duties at the National Bank of Kazakhstan and its departments, aimed at achieving the objectives and functions of the state.

      The official powers mean the rights and obligations under a particular public duties of employees in the National Bank of Kazakhstan and its departments that meet the goals and objectives facing the National Bank of Kazakhstan.

      List of positions of employees of the National Bank of Kazakhstan and its departments is approved by the President of the Republic of Kazakhstan.

      Technical employees of the National Bank of Kazakhstan and its departments are the persons not related to the civil servants, and performing work duties for maintenance and operation of the National Bank of Kazakhstan and its departments.

      List of technical staff positions is approved by the Board of Directors of the National Bank of Kazakhstan.

      Work of employees of the National Bank of Kazakhstan and its departments is regulated by the Labour Code of the Republic of Kazakhstan with the special aspects, stipulated in this Law and other regulatory legal acts of the Republic of Kazakhstan.

      The remuneration of employees of the National Bank of Kazakhstan and its departments is established on the basis of the remuneration system for employees of the National Bank of Kazakhstan approved by the Executive Board of the National Bank of Kazakhstan in consultation with the President of the Republic of Kazakhstan.

      Footnote. Article 20-1 as amended by Law of the Republic of Kazakhstan № 91-VI as of 11.07.2017 (shall be enforced ten days after its first official publication).

Article 20-2. Terms of appointment of employees of the National Bank of Kazakhstan and its departments

      Persons, applying for the position of an employee of the National Bank of Kazakhstan and its departments, should have education, level of professional training necessary for the appointment to the corresponding position in the National Bank of Kazakhstan and its departments.

      Holding a position of the employee of the National Bank of Kazakhstan and its departments is carried out after compulsory special examination.

      The following persons cannot be appointed to the position of an employee of the National Bank of Kazakhstan and its departments:

      1) a person, recognized in the manner prescribed by law as incapable or partially capable;

      2) a person, that during the three years prior to his (her) appointment as an employee of the National Bank of Kazakhstan and its departments brought to disciplinary liability for corruption offences;

      3) a person, that commit corruption crime;

      4) a person, dismissed for corruption offences;

      5) a person, that has a criminal record, which at the time of holding a position of an employee of the National Bank of Kazakhstan and its departments are not canceled or withdrawn in accordance with the law;

      6) a person, that has not undertaken a special examination for compliance with anti-corruption legislation of the Republic of Kazakhstan.

      Footnote. Article 20-2 as amended by Law of the Republic of Kazakhstan № 422-V as of 24.11.2015 (shall be enforced from 01.01.2016).

Article 20-3. Termination of employment contract with employees of National Bank of Kazakhstan and its departments

      Termination of employment contract with employees of the National Bank of Kazakhstan and its departments is made on the following grounds:

      1) provided by the Labour Code of the Republic of Kazakhstan;

      2) achievement of the retirement age, set by the law of the Republic of Kazakhstan, with the right to the annual renewal of their employment with the National Bank of Kazakhstan and its departments;

      3) the negative results of a special examination for compliance with anti-corruption legislation of the Republic of Kazakhstan;

      4) submission of false information about his (her) income and assets;

      5) non-compliance with anti-corruption obligations and restrictions established by this Law and the Law of the Republic of Kazakhstan “On Combating Corruption”;

      6) non-transfer into trust management the self-owned investment funds, bonds and shares of commercial organizations;

      7 ) providing for admission to the National Bank of Kazakhstan and its departments the false documents or information that could be grounds for refusal to hire;

      8) negative results of certification;

      9) other grounds provided for by the laws of the Republic of Kazakhstan.

      Footnote. Article 20-3 as amended by Law of the Republic of Kazakhstan № 411-V as of 18.11.2015 (shall be enforced from 01.01.2016).

Article 20-4. The rights and obligations of employees of the National Bank of Kazakhstan and its departments

      1. Officials of the National Bank of Kazakhstan and its departments shall have the right to:

      1) use the rights and freedoms, guaranteed to citizens by the Constitution of the Republic of Kazakhstan and the Labour Code of the Republic of Kazakhstan;

      2) participate within their authority in considering the issues and decision-making, demand their execution by the relevant bodies and officials;

      3) obtain in the prescribed manner the information and materials, necessary for the performance of official duties;

      Note of the ILLI!
      Subparagraph 4) is provided for in the version of Law of the Republic of Kazakhstan № 422-V as of 24.11.2015 (shall be enforced from 16.12.2020).

      4) visit organizations in the manner prescribed by the laws of the Republic of Kazakhstan to perform their official duties;

      5) require the manager the exact definition of the tasks and scope of official powers in accordance with the position, occupied by employees of the National Bank of Kazakhstan and its departments;

      6) respect the personal dignity, fair and respectful attitude on the part of managers and other individuals and officials;

      7) the training and advanced training at the expense of the budget (cost estimates) of the National Bank of Kazakhstan;

      8) unimpeded access to materials that relate to their official duties, and if necessary, give personal explanation;

      9) promotion to the positions with regard to qualifications, abilities, and the conscientious performance of their official duties;

      10) require the internal investigation in the presence of unfounded charges, according to the opinion of an employee;

      11) be engaged in teaching, research and other creative activities.

      2. Employees of the National Bank of Kazakhstan and its departments shall:

      1) comply with the Constitution and legislation of the Republic of Kazakhstan;

      2) take an oath in the manner, determined by the National Bank of Kazakhstan;

      Note of the ILLI!
      Subparagraph 3) is provided for in the version of Law of the Republic of Kazakhstan № 422-V as of 24.11.2015 (shall be enforced from 16.12.2020).

      3) ensure the observance and protection of the rights, freedoms and legitimate interests of individuals and legal entities, consider applications of individuals and legal entities in the manner and within the time limits established by the legislation of the Republic of Kazakhstan, take action thereon;

      4) exercise the powers within the rights, granted to them and in accordance with the duties;

      5) carry out orders and instructions of executives, decisions and instructions of higher authorities and officials, issued within their powers;

      6) maintain the confidentiality of the received in the performance of official duty information, affecting the privacy and dignity of individuals, and do not require them to provide such information, except as provided by the legislation of the Republic of Kazakhstan;

      7 ) ensure the safety of state property;

      8) immediately bring to the attention of administration or to law enforcement agencies about the cases of corruption offences became known to them;

      9) improve their professional level and qualifications for the effective exercise of official duties;

      10) not disclose to third parties the service, commercial, banking secrecy, insurance secret, pension savings and other information in any form available to the perception on all types of media, received in the performance of their official duties, including the information obtained when working with automated information subsystems (if there is an access to them), except as provided by the laws of the Republic of Kazakhstan;

      11) within one month from the date of holding a position of an employee of the National Bank of Kazakhstan or its departments, transfer into trust management and submit to the personnel department of the National Bank of Kazakhstan, a notarized copy of the contract for trust management of the self-owned investment funds, bonds, and shares of commercial organizations.

      3. Employees of the National Bank of Kazakhstan and its departments may not acquire investment funds, bonds, shares of commercial organizations.

      4. When employees of the National Bank of Kazakhstan and its departments, by right of their position, carry out inspections of activities of financial institutions, their branches and affiliates, the Development Bank of Kazakhstan, legal entities operating in the securities market, other securities market entities, issuers of securities, credit bureaus, bank holding companies, banking conglomerates, major participants in a bank, insurance holdings, insurance groups, major participants in an insurance (reinsurance) company, organizations guaranteeing insurance payments to policyholders (insured persons, beneficiaries) in the event of forced liquidation of insurance organizations, actuaries licensed to carry out the actuarial activity in the insurance market, special finance companies, Islamic special finance companies, investment funds, large participants in an investment portfolio manager, persons with characteristics of a major participant in a bank, an insurance (reinsurance) company, investment portfolio manager, bank holding company, insurance holding company, professional organizations, microfinance organizations, collection agencies, participants in a payment system, operators and operating centers of payment systems, including any other person authorized to provide services for the functioning of a payment system under an agreement therewith, payment service providers, including any other person authorized to provide payment services under an agreement therewith, as well as persons making foreign exchange transactions, temporary administrations (temporary administrators), liquidation commissions of banks, insurance (reinsurance) companies (hereinafter referred to as the audited entity), they are obliged to immediately report to higher ranking managers all circumstances that may impede efficient and impartial performance of their official powers, such as:

      1) close relatives (relatives-in-law), spouses, who are senior managers of audited entities;

      2) close relatives or spouses working at audited entities;

      3) loans granted by audited entities and other property liabilities to audited entities.

      Footnote. Article 20-4, as amended by Law of the Republic of Kazakhstan dated 21.06.2013 No. 106-V (shall be enforced upon expiry of ten calendar days after its first official publication); № 422-V as of 24.11.2015 (shall be enforced from 01.01.2016); № 12-VІ as of 26.07.2016 (shall be enforced thirty days after its first official publication); № 63-VI as of 06.05.2017 (shall be enforced twenty-one days after its first official publication); № 166-VI as of 02.07.2018 (shall be enforced ten days after its first official publication).

Article 20-5. Responsibility of employees of the National Bank of Kazakhstan and its departments

      1. Employees and technical employees of the National Bank of Kazakhstan and its departments shall be responsible for a failure to perform or improper performance of assigned duties and labor discipline in accordance with the Labor Code of the Republic of Kazakhstan.

      2. Is excluded by Law of the Republic of Kazakhstan № 411-V as of 18.11.2015 (shall be enforced from 01.01.2016).

      3. A disciplinary penalty:

      1) is imposed by an official authorized to appoint and dismiss an employee of the National Bank of Kazakhstan and its departments, who is subject to disciplinary liability;

      2) cannot be re-imposed for the same offence;

      3) is imposed in the manner determined by an act of the National Bank of Kazakhstan.

      4. The employees of the National Bank of Kazakhstan and its departments, who have committed a disciplinary offence, may be temporarily suspended from office by an official authorized to appoint and dismiss him/her from office, until the responsibility issue is settled in the established manner.

      5. Is excluded by Law of the Republic of Kazakhstan № 411-V as of 18.11.2015 (shall be enforced from 01.01.2016).
      6. Is excluded by Law of the Republic of Kazakhstan № 411-V as of 18.11.2015 (shall be enforced from 01.01.2016).
      7. Is excluded by Law of the Republic of Kazakhstan № 411-V as of 18.11.2015 (shall be enforced from 01.01.2016).

      8. It is mandatory to familiarize the employees and technical employees of the National Bank of Kazakhstan and its departments with all materials related to the imposition of disciplinary penalties, they are given the right to personally participate in internal investigation procedure.

      9. The employees and technical employees of the National Bank of Kazakhstan and its departments being brought to responsibility can appeal actions and decisions of the National Bank of Kazakhstan to court.

      10. If the employees and technical employees of the National Bank of Kazakhstan and its departments commit criminal and other offences, their bear criminal, administrative, material liability, respectively, on the grounds and in the manner established by the laws of the Republic of Kazakhstan.

      11. The National Bank of Kazakhstan provides legal protection for its employees, members of the Management Board, including former employees and members of the Executive Board, and persons involved by it, in case of filing lawsuits against them in connection with their actions (inaction), decision-making for the purposes of performing functions assigned to the National Bank of Kazakhstan, and also duties they performed as members of temporary administrations and liquidation commissions of second-tier banks, insurance (reinsurance) organizations.

      Footnote. Article 20-5 as amended by Law of the Republic of Kazakhstan № 227-V as of 03.07.2014  (shall be enforced from 01.01.2015);  № 233-V as of 04.07.2014  (shall be enforced from 01.01.2015); № 411-V as of 18.11.2015 (shall be enforced from 01.01.2016); от 02.07.2018 № 168-VІ (shall be enforced from 01.01.2019).

Chapter 5 INTERACTION OF NATIONAL BANK OF KAZAKHSTAN WITH STATE AUTHORITIES

Article 21. Basic principles of interaction

      National Bank of Kazakhstan within its authority, granted to it by the laws of the Republic of Kazakhstan and the acts of the President of the Republic of Kazakhstan is independent in its activities. The representative and executive authorities may not interfere in the activities of the National Bank of Kazakhstan, its branches, representative offices, agencies and organizations in the implementation of its legislated authority.

      Footnote. Article 21, as amended by the Decree of the President of the Republic of Kazakhstan, having the force of the Law dated 5 December, 1995 No. 2672; by the Laws of the Republic of Kazakhstan dated 11.07.1997 No. 154; dated 05.07.2012 No. 30-V (shall be enforced upon expiry of ten calendar days after its first official publication).

Article 22. The Government of the Republic of Kazakhstan and the National Bank of Kazakhstan

      National Bank of Kazakhstan shall coordinate its activities with the Government of the Republic of Kazakhstan. National Bank of Kazakhstan and the Government must inform each other about the prospective activities and the results of national importance, and hold regular consultations.

      National Bank of Kazakhstan takes into account in its activities the economic policy of the Government and contributes to its implementation, if it is not contrary to the performance of its main functions and the implementation of monetary policy.

      Chairman of the National Bank of Kazakhstan, or one of his (her) deputies shall have the right to participate in government sessions in a consultative capacity.

      The Government shall not be liable for the obligations of the National Bank of Kazakhstan, as well as the National Bank of Kazakhstan shall not be liable for the obligations of the Government, except when it takes on that responsibility.

      National Bank of Kazakhstan and the Government of the Republic of Kazakhstan shall cooperate on the issues of stability of financial system through the joint risk assessment for financial stability, development, adoption and implementation of a set of consistent solutions in order to prevent systemic financial crisis and minimize its effects.

      Footnote. Article 22, as amended by the Laws of the Republic of Kazakhstan dated 08.07.2005 No. 69; dated 05.07.2012 No. 30-V (shall be enforced upon expiry of ten calendar days after its first official publication).

Article 23. National Bank of Kazakhstan - a bank, a financial adviser and agent

      National Bank of Kazakhstan may act as a bank, financial adviser and agent of the state bodies in agreement with them.

      Footnote. Articles 23-28 – are in the wording of the Law of the Republic of Kazakhstan dated 11 July, 1997 No. 154.

Article 24. National Bank of Kazakhstan – a bank of the Government of the Republic of Kazakhstan

      The Government of the Republic of Kazakhstan allocates its funds in the National Bank of Kazakhstan. National Bank of Kazakhstan makes payments, carries out other transactions on the accounts of the Government, as well as offers other services to it.

      Direct funding of the Government of the Republic of Kazakhstan by the National Bank of Kazakhstan is not allowed.

      Footnote. Article 24, as amended – by the Laws of the Republic of Kazakhstan dated 8 December, 1997 No. 200; dated 10 July, 2003 No. 483 (shall be enforced from 1 January, 2004).

Article 25. National Bank of Kazakhstan – a financial adviser of the Government of the Republic of Kazakhstan

      National Bank of Kazakhstan is acting as financial adviser to the Government of the Republic of Kazakhstan in the development and implementation of government borrowing, the formation of fiscal policy on the issues, related to monetary policy.

Article 26. National Bank of Kazakhstan – an agent of the Government of the Republic of Kazakhstan

      National Bank of Kazakhstan acts as an agent of the Government of the Republic of Kazakhstan on the terms that have been agreed between the National Bank of Kazakhstan and the Government of the Republic of Kazakhstan.

      National Bank of Kazakhstan, as an agent of the Government of the Republic of Kazakhstan, serves the government loans of the Government an agreement with it.

Article 27. Transactions with public securities, issued by a decision of the Government of the Republic of Kazakhstan

      National Bank of Kazakhstan shall have the right to conduct transactions with public securities issued by a decision of the Government of the Republic of Kazakhstan.

      National Bank of Kazakhstan may not acquire in its property the public securities of the central authorized body for budget execution during their placement in the primary market.

      The central authorized body for budget execution shall coordinate the conditions for admitting financial institutions to initial placement of government securities issued by decision of the Government with the National Bank of Kazakhstan.

      Footnote. Article 27, as amended – by the Law of the Republic of Kazakhstan dated 10 July, 2003 No. 483 (shall be enforced from 1 January, 2004); dated 5 July, 2006 No. 165 (the order of enforcement see Article 2); № 168-VІ as of 02.07.2018 (shall be enforced ten days after its first official publication).

Article 28. Regulation of circulation of public securities

      National Bank of Kazakhstan shall regulate the circulation of public securities of the Government of the Republic of Kazakhstan and the local executive bodies in agreement with the central authorized body for budget execution.

      Footnote. Article 28 – is in the wording of the Law of the Republic of Kazakhstan dated 10 July, 2003 No. 483 (shall be enforced from 1 January, 2004); as amended by the Law of the Republic of Kazakhstan dated 5 July, 2006 No. 165 (the order of enforcement see Article 2).

Chapter 6 MONETARY POLICY

Article 29. Development and implementation of monetary policy

      National Bank of Kazakhstan is the only body that defines and implements the state monetary policy of the Republic of Kazakhstan. Monetary policy is implemented by the National Bank of Kazakhstan in order to ensure the price stability.

      Monetary policy is implemented through the establishment of:

      the official refinancing rate;

      the levels of interest rates on the main transactions of monetary policy;

      the minimum reserve requirements;

      in exceptional cases, the direct quantitative restrictions on the level and amount of certain types of transactions.

      Footnote. Article 29 – is in the Law of the Republic of Kazakhstan dated 10 July, 2003 No. 483 (shall be enforced from 1 January, 2004). It is amended – by the Law of the Republic of Kazakhstan dated 8 July, 2005 No. 69.

Article 30. Types of transactions of monetary policy

      In order to implement monetary policy, the National Bank of Kazakhstan shall perform the following operations:

      1) the granting of standing loans;

      2) acceptance of deposits;

      3) foreign currency intervention;

      4) issuance of short-term notes of the National Bank of Kazakhstan;

      5) purchase and sale of state and other securities, including the right of re-purchase;

      6) is excluded by Law of the Republic of Kazakhstan № 422-V as of 24.11.2015 (shall be enforced from 01.01.2016);

      7) other transactions by a decision of the National Bank of Kazakhstan.

      Footnote. Article 30, as amended – by the Law of the Republic of Kazakhstan dated 11 July, 1997 No. 154, is in the new wording – by the Law of the Republic of Kazakhstan dated 10 July, 2003 No. 483 (shall be enforced from 1 January, 2004); as amended by Law of the Republic of Kazakhstan № 422-V as of 24.11.2015 (shall be enforced from 01.01.2016); № 168-VІ as of 02.07.2018 (shall be enforced ten days after its first official publication).

Article 31. Official refinancing rate

      Footnote. Article 31 is excluded by Law of the Republic of Kazakhstan № 422-V as of 24.11.2015 (shall be enforced from 01.01.2016).

Article 32. Reserve requirements

      The National Bank of Kazakhstan shall, in order to implement monetary policy, establish the minimum reserve requirements.

      The National Bank of Kazakhstan approves the rules on minimum reserve requirements, including the structure of banks’ liabilities, for calculating the minimum reserve requirements, the procedure for calculating the minimum reserve requirements, fulfilling the minimum reserve requirements, reserving and monitoring the fulfillment of the minimum reserve requirements.

      Changing the minimum reserve requirements shall be entered into effect no earlier than one month from the date of such decision.

      In case of violation of the minimum reserve requirements, the banks shall be liable under the laws of the Republic of Kazakhstan.

      In ten days from the date of appointment of the chairman of the liquidation commission, the National Bank of Kazakhstan shall return to a liquidation commission of a bank, the reserved funds.

      Footnote. Article 32 is in the wording of the Law of the Republic of Kazakhstan dated 08.07.2005 No. 69; as amended by the Law of the Republic of Kazakhstan dated 05.07.2012 No. 30-V (shall be enforced upon expiry of ten calendar days after its first official publication); № 422-V as of 24.11.2015 (shall be enforced from 01.01.2016).

Article 33. Buying and selling securities

      Buying and selling of state and other securities is carried out by the National Bank of Kazakhstan within the general monetary policy.

      Footnote. Article 33 – is in the wording of the Law of the Republic of Kazakhstan dated 10 July, 2003 No. 483 (shall be enforced from 1 January, 2004).

Article 34. Official refinancing rate and interest rates on monetary policy operations

      The National Bank of Kazakhstan sets an official refinancing rate.

      Interest rates on monetary policy operations are set by the National Bank of Kazakhstan in order to influence market interest rates in the financial market as part of a current monetary policy.

      Footnote. Article 34 as amended by Law of the Republic of Kazakhstan № 422-V as of 24.11.2015 (shall be enforced from 01.01.2016).

Article 35. Standing loans

      The National Bank of Kazakhstan grants standing loans in accordance with the adopted guidelines of the monetary policy exclusively against collateral with highly liquid, risk-free securities and other low-risk assets for a period not exceeding thirty calendar days.

      Footnote. Article 35 as amended by Law of the Republic of Kazakhstan № 168-VІ as of 02.07.2018 (shall be enforced ten days after its first official publication).

Article 36. Foreign currency interventions

      Foreign currency interventions of the National Bank of Kazakhstan are implemented independently by buying and selling foreign currency and carrying out other types of foreign currency transactions in the interbank or exchange market in order to influence to the rate of tenge.

      Foreign currency interventions of the National Bank of Kazakhstan are implemented within the general monetary policy.

      Footnote. Article 36 is in the new wording – of the Law of the Republic of Kazakhstan dated 10 July, 2003 No. 483 (shall be enforced from January 1, 2004).

Article 36-1. Deposits

      The order, conditions for attracting and repayment, timing and limits of attracting deposits are determined by the National Bank of Kazakhstan.

      National Bank of Kazakhstan shall have the right to attract deposits as in national, and in foreign currency.

      Footnote. It is supplemented by Article 36-1 – by the Law of the Republic of Kazakhstan dated 10 July, 2003 No. 483 (shall be enforced from 1 January, 2004).

Article 36-2. Short-term notes of the National Bank of Kazakhstan

      Short-term notes of the National Bank of Kazakhstan are the public securities, issued by the National Bank of Kazakhstan, the obligations under which carries the National Bank of Kazakhstan.

      The procedure and conditions of issuance, placement, circulation and repayment of short-term notes are determined by the National Bank of Kazakhstan.

      National Bank of Kazakhstan in accordance with the objectives of monetary policy is entitled to issue short-term notes as in national, and in foreign currency.

      Footnote. It is supplemented by Article 36-2 – by the Law of the Republic of Kazakhstan dated 10 July, 2003 No. 483 (shall be enforced from 1 January, 2004); as amended by the Law of the Republic of Kazakhstan dated 05.07.2012 No. 30-V (shall be enforced upon expiry of ten calendar days after its first official publication).

Article 36-3. Rediscounting of commercial bills

      Footnote. Article 36-3 is excluded by Law of the Republic of Kazakhstan № 422-V as of 24.11.2015 (shall be enforced from 01.01.2016).

Article 37. Quantitative restrictions on banks’ operations

      Direct quantitative restrictions of the National Bank of Kazakhstan are the maximum interest rates on certain types of operations and transactions, direct credit crunch, freeze of remuneration rates, direct regulation of specific types of credit in order to encourage or deter the development of certain industries.

      National Bank of Kazakhstan shall have the right to apply direct quantitative restrictions in case of impossibility of suspending inflation processes by indirect methods of monetary control.

      Footnote. Article 37, as amended – by the Law of the Republic of Kazakhstan dated 11 July, 1997 No. 154.

Chapter 7 MONEY CIRCULATION AND MONETARY UNIT

Article 38. Monetary unit

      Monetary unit (the national currency) of the Republic of Kazakhstan is the Kazakhstani Tenge. Kazakhstani Tenge consists of 100 tiyns.

      Banknotes of the Republic of Kazakhstan that are in circulation consist of notes and coins.

      Structure of nominal values of banknotes and coins is determined by the National Bank of Kazakhstan.

Article 39. Means of payment

      Legal mean of payment in the Republic of Kazakhstan, except in cases stipulated by the legislative acts, regulatory legal acts of the National Bank of Kazakhstan, is the Kazakhstani tenge.

      Footnote. Article 39 – is in the wording of the Law of the Republic of Kazakhstan dated 11 July, 1997 No. 154.

Article 40. Issue of banknotes and coins

      Issue of banknotes and coins, organization of their circulation and withdrawal from the circulation on the territory of the Republic of Kazakhstan are carried out exclusively by the National Bank of Kazakhstan.

      Issue of banknotes and coins in circulation is carried out by the National Bank of Kazakhstan through their sale to individuals and legal entities.

      Footnote. Article 40 – is in the wording of the Law of the Republic of Kazakhstan dated 8 July, 2005 No. 69

Article 41. Ensuring of monetary unit

      Banknotes and coins of the National Bank of Kazakhstan are unconditional obligations of the National Bank of Kazakhstan and provided by all of its assets.

      National Bank of Kazakhstan has regularly published in the media a message of the size of foreign exchange reserves.

      Footnote. Article 41, as amended by the Laws of the Republic of Kazakhstan dated 11.07.1997 No. 154; dated 05.07.2012 No. 30-V (shall be enforced upon expiry of ten calendar days after its first official publication).

Article 42. Production and characterization of banknotes and coins

      National Bank of Kazakhstan shall determine the need for the required amount of banknotes and coins, and provide their production, establish the procedure for storage, destruction and collection of cash.

      Coins are divided into the following types:

      investment coins – coins, made of precious metals that are subject to investment and savings;

      collectible coins – anniversary, memorable and other coins of special coinage, produced as a limited edition of precious and base metal that are subject of collection and savings;

      circulating coins – coins, made of precious metals and intended for cash monetary circulation.

      Banknotes and coins of the national currency of the Republic of Kazakhstan are developed in accordance with the design concept of banknotes and coins of the national currency - Kazakhstan tenge. Images and descriptions of banknotes and coins shall be published in the media.    

      Footnote. Article 42, as amended – by the Law of the Republic of Kazakhstan dated 11 July, 1997 No. 154; dated 8 July, 2005 No. 69; № 422-V as of 24.11.2015 (shall be enforced from 01.01.2016)

Article 43. Requirements for admission of banknotes and coins

      Note of the ILLI!
      Part one of Article 43 is meant to be amended by Law of the Republic of Kazakhstan № 422-V as of 24.11.2015 (shall be enforced from 16.12.2020).

      Banknotes and coins put into circulation by the National Bank of Kazakhstan shall be accepted at their face value throughout the Republic of Kazakhstan for all types of payments, as well as for crediting to bank accounts and for transfers, shall be exchanged and changed by all banks and the National postal operator without restriction.

      Nobody, except the National Bank of Kazakhstan, can annul the banknotes and coins, issued by the National Bank of Kazakhstan.

      Footnote. Article 43, as amended – by the Law of the Republic of Kazakhstan dated 16 July, 1999 No. 436; № 422-V as of 24.11.2015 (shall be enforced from 01.01.2016).

Article 43-1. Sale and re-purchase of banknotes and coins by the National Bank of Kazakhstan

      Sale, re-purchase of banknotes and circulating coins by the National Bank of Kazakhstan are carried at their face value.

      Sale and re-purchase by the National Bank of Kazakhstan of investment and collectible coins are carried out in the manner prescribed by regulatory legal acts of the National Bank of Kazakhstan.

      Footnote. It is supplemented by Article 43-1 – by the Law of the Republic of Kazakhstan dated 8 July, 2005 No. 69.

Article 44. The right to replace monetary unit

      The President of the Republic of Kazakhstan has the right to replace monetary unit. The President of the Republic of Kazakhstan shall determine the procedure, terms and conditions for the functioning of monetary unit of the Republic of Kazakhstan.

      Footnote. Article 44 is in the wording of the Decree of the President of the Republic of Kazakhstan, having the force of the Law dated 5 December, 1995 No. 2672.

Article 45. Putting banknotes and coins of the national currency of the Republic of Kazakhstan into circulation, their replacement and taking out of circulation

      The decision to put into circulation banknotes and coins of the national currency of the Republic of Kazakhstan, the procedure for their replacing and taking out of circulation are taken by the National Bank of Kazakhstan and published in the media.

      Footnote. Article 45 as amended by Law of the Republic of Kazakhstan № 422-V as of 24.11.2015 (shall be enforced from 01.01.2016).

Article 46. Worm, doubtful banknotes and defective (damaged), doubtful coins

      Note of the ILLI!
      Part one of Article 46 is provided for in the version of Law of the Republic of Kazakhstan № 422-V as of 24.11.2015 (shall be enforced from 16.12.2020).

      Worn banknotes with at least seventy percent of the banknote size established by the National Bank of Kazakhstan, and defective (damaged) coins are exchanged without restrictions by the National Bank of Kazakhstan, banks and the National postal operator.

      Note of the ILLI!
      Part two of Article 46 is provided for in the version of Law of the Republic of Kazakhstan № 422-V as of 24.11.2015 (shall be enforced from 16.12.2020).

      Doubtful banknotes with more than fifty percent and doubtful coins are accepted by the National Bank of Kazakhstan, banks and the National postal operator in accordance with the regulatory legal act of the National Bank of Kazakhstan.

      Doubtful banknotes and doubtful coins are exchanged by the National Bank of Kazakhstan in the manner prescribed by the regulatory legal act of the National Bank of Kazakhstan.

      The National Bank of Kazakhstan is not obligated to compensate for lost or destroyed banknotes and coins.

      Footnote. Article 46 as amended by Law of the Republic of Kazakhstan № 422-V as of 24.11.2015 (shall be enforced from 01.01.2016).

Article 47. Responsibility for the manufacture, storage and sale of counterfeit banknotes and coins

      Persons guilty of making, storing counterfeit banknotes and coins for the purpose of selling, guilty of selling counterfeit banknotes and coins, as well as unauthorized issue of cash, are liable under the laws of the Republic of Kazakhstan.

      Footnote. Article 47 as amended by Law of the Republic of Kazakhstan № 422-V as of 24.11.2015 (shall be enforced from 01.01.2016).

Article 47-1. Organization of cash services

      Footnote. Article 47-1 is excluded by the Law of the Republic of Kazakhstan dated 11.07.2009 No. 185-IV (shall be enforced from 30.08.2009).

Chapter 8. Organization of payments and money transfers

      Footnote. Title of the Chapter – is in the wording of the Law of the Republic of Kazakhstan dated 16 July, 1999 No. 436.

Article 48. Powers of the National Bank of Kazakhstan in organizing and regulating payments and (or) money transfers, payment systems and the payment services market

      The powers of the National Bank of Kazakhstan in the organization and regulation of payments and (or) money transfers, payment systems and the payment services market, the state control over the payment services market and the supervision (oversight) of payment systems are determined in accordance with the Law of the Republic of Kazakhstan “On Payments and Payment Systems”.

      Footnote. Article 48 as amended by Law of the Republic of Kazakhstan № 12-VІ as of 26.07.2016 (shall be enforced thirty days after its first official publication).

Article 48-1. (Article 48-1 is excluded – by the Law of the Republic of Kazakhstan dated 8 July, 2005 No. 69).

Article 49. Accounts

      National Bank of Kazakhstan establishes the types, legal regime and structure of bank accounts, the procedure and conditions for the opening, maintaining and closing the accounts.

      Footnote. Article 49, as amended by the Laws of the Republic of Kazakhstan dated 11.07.1997 No. 154; dated 11.07.2009 No. 185-IV (shall be enforced from 30.08.2009).

Article 50. Methods for making payments and transfer of money

      Methods for making payments and transfer of money, used in the Republic of Kazakhstan, are established by the legislative acts and the regulatory legal acts of the Republic of Kazakhstan, adopted in accordance with them.

      Footnote. Article 50 – is in the wording of the Law of the Republic of Kazakhstan dated 16 July, 1999 No. 436.

Article 51.

      (Article 51 is excluded – by the Law of the Republic of Kazakhstan dated 11 July, 1997 No. 154).

Chapter 8-1. Promoting the stability of the financial system

      Footnote. The Law is supplemented by Chapter 8-1 in accordance with the Law of the Republic of Kazakhstan dated 05.07.2012 No. 30-V (shall be enforced upon expiry of ten calendar days after its first official publication).

Article 51-1. Development and implementation of measures ensuring the stability of the financial system

      The National Bank of Kazakhstan independently and (or) together with other state bodies, within their competence, develops and implements measures aimed at ensuring the stability of the financial system.

      In order to promote stability of the financial system, the National Bank of Kazakhstan shall: 

      1) conduct regular monitoring of macro-economic and macro-financial factors affecting the stability of the financial system;

      2) carry out macro-prudential regulation of the financial system;

      3) grant loans of last resort in the manner and on the conditions provided for by this Law and the regulatory legal act of the National Bank of Kazakhstan;

      Note of the ILLI!
      Subparagraph 4) was in effect from 01.01.2016 until 31.12.2016 in accordance with Law of the Republic of Kazakhstan № 422-V as of 24.11.2015.

      4) pay one-time compensation, also through an organization specializing in the improvement of the quality of credit portfolios of second-tier banks, for deposits (monetary contributions) of individuals accepted in national currency (tenge), in connection with the transition to a free-floating exchange rate in the manner, on the conditions and within the time limits established by the Executive Board of the National Bank of Kazakhstan;

      5) place deposits with second-tier banks, also through its subsidiaries, in order to reduce the share of non-performing loans in the manner, on the conditions and within the time limits established by the Executive Board of the National Bank of Kazakhstan;

      6) place deposits with second-tier banks, also through its subsidiaries, for refinancing mortgage housing loans and mortgage loans of individuals in the manner, on the conditions and within the time limits established by the Executive Board of the National Bank of Kazakhstan;

      7) make transactions with derivative financial instruments with second-tier banks, international financial institutions, also through its subsidiaries, in the manner, on the conditions and within the time limits established by the Executive Board of the National Bank of Kazakhstan;

      8) analyze information on security incidents of banks and organizations carrying out certain types of banking operations, including information on disruptions, failures in information systems.

      Footnote. Article 51-1 as amended by Laws of the Republic of Kazakhstan № 422-V as of 24.11.2015 (see the enforcement procedure in Article 2); № 128-VI as of 28.12.2017 (shall be enforced ten days after its first official publication); № 168-VІ as of 02.07.2018 (shall be enforced from 01.01.2019).

Article 51-2. Macro-prudential regulation

      Macro-prudential regulation shall be understood as a set of administrative, organizational and legal measures aimed at regulating systemic risks of the financial system.

      Systemic risks of the financial system shall be understood as risks of disruption in the provision of financial services, entailing the deterioration in the financial condition of the entire financial system or its part and (or) undermining its stable functioning. Systemic risks of the financial system also include risks of system-forming financial institutions.

      System-forming financial institutions shall be understood as financial institutions, whose stable functioning affects the stability of the financial system as a whole.

      In order to implement macro-prudential regulation, the National Bank of Kazakhstan shall:

      1) regularly monitor systemic risks of the financial system;

      2) establish the procedure for classifying financial institutions as system-forming ones;

      2-1) make a list of system-forming financial institutions;

      3) have the right to establish prudential standards and (or) other mandatory norms and limits for system-forming financial institutions in order to reduce the level of systemic risks of the financial system and prevent their occurrence;

      4) impose restrictions on certain types of banking and other operations by financial institutions, independently or jointly with the Government of the Republic of Kazakhstan, in case of occurrence a systemic financial crisis or its threat.

      Footnote. Article 51-2 as amended by Laws of the Republic of Kazakhstan № 422-V as of 24.11.2015 (shall be enforced from 01.01.2016); № 168-VІ as of 02.07.2018 (shall be enforced ten days after its first official publication).

Article 51-3. Loans of last resort

      1. Loans of last resort are loans provided by the National Bank of Kazakhstan to banks experiencing short-term liquidity shortages.

      The National Bank of Kazakhstan acts as a lender of last resort only on the following conditions:

      1) the borrower shall be a bank - a resident of the Republic of Kazakhstan, which is not classified as a bank with an unstable financial situation that threatens the interests of its depositors and creditors and (or) stability of the financial system, or as an insolvent bank;

      2) the loan shall be secured by assets, the list of which and the established discounts thereto are determined by the National Bank of Kazakhstan.

      The value of the assets provided as collateral, taking into account the discount, must cover the size of the loan, including all interest thereon;

      3) the loan is provided in national currency;

      4) the level of an interest rate on the loan shall not be lower than the official refinancing rate of the National Bank of Kazakhstan, taking into account the additional interest rate established by the National Bank of Kazakhstan;

      5) the loan shall be provided for a period of fourteen to ninety calendar days and may not be extended more than three times. The total term of use of the loan, with account of all the extensions, may not exceed one year. The loan of last resort is extended on the conditions specified in this article.

      2. The National Bank of Kazakhstan has the right to provide loans of last resort to system-forming infrastructure financial institutions.

      3. In case of a failure to fulfill (improper fulfillment of) obligations under the loan of the last resort by the bank, the National Bank of Kazakhstan has the right to sell the pledged assets out of court.

      The pledged assets may be sold by the bank to the National Bank of Kazakhstan or to a third party indicated by the National Bank of Kazakhstan.

      The assignment of the right (of claim) to assets that are collateral under a loan agreement of last resort does not require:

      1) the consent of shareholders, debtors of the bank, as well as other concerned parties (including mortgagors, guarantors, sureties). In this case, the new creditor’s identity is recognized to be of no substantial significance for the debtor;

      2) to amend agreements, concluded by the bank with its debtors, and also with other persons (including pledgers, guarantors, sureties), for the purpose of indicating the new party to the agreement.

      4. The procedure, conditions for the provision and repayment of loans of last resort, as well as foreclosure on assets that are collateral under a loan agreement of last resort, are determined by the National Bank of Kazakhstan.

      Footnote. The Law is supplemented with Article 51-3 in accordance with Law of the Republic of Kazakhstan № 168-VІ as of 02.07.2018 (shall be enforced from 01.01.2019).

Chapter 8-2. Special regulatory regime

      Footnote. The Law is supplemented with Chapter 8-2 in accordance with Law of the Republic of Kazakhstan № 168-VІ as of 02.07.2018 (shall be enforced ten days after its first official publication).

Article 51-4. Goals of introduction and general conditions for operating under a special regulatory regime

      1. A special regulatory regime is a set of special conditions for carrying out activities in the financial sector, activities related to the concentration of financial resources and (or) payment services established by the National Bank of Kazakhstan.

      2. A special regulatory regime is aimed at achieving the following goals:

      1) promoting competition in the financial services market and the investment attractiveness of the financial market;

      2) the introduction of new services and development of the financial market to increase the level of satisfaction and meet the interests of consumers, business entities and the state;

      3) the formation of optimal regulation and supervision of the financial market and financial institutions, ensuring financial stability and protecting the interests of consumers.

      3. The principles of a special regulatory regime are as follows:

      1) ensuring equal conditions for participation under a special regulatory regime;

      2) compliance with a special regime for regulating the rights and interests of consumers by participants.

      4. A special regulatory regime is introduced by a decision of the Executive Board of the National Bank of Kazakhstan, which indicates the types of activities (services, products) in the financial sector, activities related to the concentration of financial resources and (or) payment services, special conditions for their implementation under a special regulatory regime, the procedure and conditions for applying the requirements of the legislation of the Republic of Kazakhstan to special regulatory regime participants.

      The total term of a special regulatory regime introduced by the National Bank of Kazakhstan does not exceed five years.

      5. A special regulatory regime ceases to be effective after expiration of the period for which it was introduced.

      6. The procedure for introducing and abolishing a special regulatory regime, carrying out activities under a special regulatory regime shall be approved by a regulatory legal act of the National Bank of Kazakhstan.

Article 51-5. Implementation of activities under a special regulatory regime

      1. Special regulatory regime participants may be financial institutions and (or) other legal entities operating in the financial sector, carrying out activities related to the concentration of financial resources and (or) payment services (hereinafter referred to as special regulatory regime participants).

      2. A special regulatory regime participant shall carry out its activity in accordance with an agreement on operating under the special regulatory regime concluded with the National Bank of Kazakhstan.

           A model agreement on operating under a special regulatory regime is approved by the National Bank of Kazakhstan.

      A model agreement shall contain a clause obligating a special regulatory regime participant to notify service consumers of operating under a special regulatory regime.

      3. The selection criteria and procedure for considering documents for concluding an agreement on operating under a special regulatory regime are approved by the regulatory legal act of the National Bank of Kazakhstan.

      4. The National Bank of Kazakhstan refuses a special regulatory regime participant to conclude an agreement on operating under a special regulatory regime if the declared type of activity does not meet the goals of introducing the special regulatory regime, when it fails to meet the selection criteria for special regulatory regime participants and (or) submitted documents do not meet to the requirements established by the regulatory legal act of the National Bank of Kazakhstan.

      5. The agreement on operating under a special regulatory regime shall terminate:

      1) upon termination of the special regulatory regime in connection with the expiration of the period for which it was introduced, or its cancellation;

      2) upon the expiration of the term or in case of early termination of the agreement on operating under the special regulatory regime;

      3) in other cases stipulated by the civil legislation of the Republic of Kazakhstan or an agreement on operating under a special regulatory regime.

      6. The National Bank of Kazakhstan has the right to unilaterally terminate an agreement on operating under a special regulatory regime in the event of a special regulatory regime participant’s failure to fulfill obligations under the agreement, and also in case the special regulatory regime participant has ceased to meet the requirements established by the regulatory legal act of the National Bank Kazakhstan.

      The National Bank of Kazakhstan shall notify a special regulatory regime participant of its failure to fulfill obligations specified in the agreement on operating under the special regulatory regime and the requirement to eliminate violations within sixty working days of the notification.

      A special regulatory regime participant, within five working days of receipt of the notification of the authorized body, shall develop and submit to the National Bank of Kazakhstan an action plan to eliminate identified violations and (or) reasons, as well as conditions that contributed to their occurrence. The action plan shall indicate a list of planned activities, deadlines for their implementation, and also responsible officials.

      If the National Bank of Kazakhstan approves the action plan, the special regulatory regime participant proceeds with its implementation and submits to the National Bank of Kazakhstan a report on the implementation of activities within the time frames established by the National Bank of Kazakhstan.

      If the National Bank of Kazakhstan disapproves of the action plan, the special regulatory regime participant shall remedy the flaws indicated by the National Bank of Kazakhstan.

      In case of disapproval of the action plan and (or) failure to take action to remedy the indicated flaws by the special regulatory regime participant, the National Bank of Kazakhstan shall notify it of unilateral termination of the agreement on operating under the special regulatory regime.

      7. After the termination of an agreement on operating under the special regulatory regime, the financial institution and (or) another legal entity must immediately terminate the activity, carried out under the special regulatory regime, subject to licensing or with respect to which the licensing procedure applies in accordance with the laws of the Republic of Kazakhstan, and also fulfill obligations to its customers in the manner and within the time limits established by the regulatory legal acts of the National Bank of Kazakhstan.

      8. After the termination of the agreement on operating under the special regulatory regime, the activity subject to licensing or authorization-based procedure in accordance with the laws of the Republic of Kazakhstan is considered to be illegal and entails liability established by the laws of the Republic of Kazakhstan.

Chapter 9. OPERATIONS OF THE NATIONAL BANK OF KAZAKHSTAN

      Note of the ILLI!
      Article 52 is meant to be amended by Law of the Republic of Kazakhstan № 422-V as of 24.11.2015 (shall be enforced from 16.12.2020).

      The owners of bank accounts in the National Bank of Kazakhstan are legal entities that have opened accounts with it in the manner established by the National Bank of Kazakhstan, and banks.

      Footnote. Article 52 – is in the Law of the Republic of Kazakhstan dated 16 July, 1999 No. 436; as amended by Law of the Republic of Kazakhstan № 168-VІ as of 02.07.2018 (shall be enforced ten days after its first official publication).

Article 52-1. Operations and transactions of the National Bank of Kazakhstan in national currency

      National Bank of Kazakhstan performs the following operations in national currency:

      1) provides loans to organizations entitled to receive such loans in the manner prescribed by legal acts of the National Bank of Kazakhstan;

      2) is excluded by Law of the Republic of Kazakhstan № 422-V as of 24.11.2015 (shall be enforced from 01.01.2016);

      3) buys and sells state securities;

      4) buys and sells deposit certificates, debt securities that the National Bank of Kazakhstan considers as suitable to provide loans;

      5) accepts deposits, make payments and transfers of money, takes securities and other assets in deposit and management;

      6) carries out transactions with derivative financial instruments;

      Note of the ILLI!
      Subparagraph 7) is meant to be amended by Law of the Republic of Kazakhstan № 422-V as of 24.11.2015 (shall be enforced from 16.12.2020).

      7 ) if necessary, opens accounts in banks and financial institutions in the territory of the Republic of Kazakhstan and abroad;

      8) writes the checks and issues promissory notes;

      9) performs other banking operations, as well as transactions on its own behalf in accordance with its objectives, if it is not expressly prohibited by this Law.

      Footnote. It is supplemented by Article 52-1 – by the Law of the Republic of Kazakhstan dated 16 July, 1999 No. 436; as amended – by the Law of the Republic of Kazakhstan dated 10 July, 2003 No. 483 (shall be enforced from 1 January, 2004); dated 5 July, 2006 No. 165 (the order of enforcement see Article 2); № 422-V as of 24.11.2015 (shall be enforced from 01.01.2016); № 168-VІ as of 02.07.2018 (shall be enforced from 01.01.2019) .

Article 53. Collateral

      Footnote. Article 53, as amended – by the Law of the Republic of Kazakhstan dated 11 July, 1997 No. 154; Article is excluded – by the Law of the Republic of Kazakhstan dated 10 July, 2003 No. 483 (shall be enforced from 1 January, 2004).

Article 54. Restrictions on operations of the National Bank of Kazakhstan

      National Bank of Kazakhstan shall not:

      - serve the organization, as well as acquire shares of legal entities, except as provided by this Law;

      - engage in trading and other activities, with the exception of the those permitted by applicable legislation;

      - provide loans without collateral, as well as loans for a period of more than one year;

      - extend the granted loans or allow the renewal of bills with expiring dates, unless otherwise expressly provided for by the laws of the Republic of Kazakhstan.

      Exception of cases, specified in part one of this Article, can only be done by a special decision of the National Bank of Kazakhstan.

      Footnote. Article 54 - as amended by the Decree of the President of the Republic of Kazakhstan, having the force of the Law, dated 5 December, 1995 No. 2672, is supplemented by the second part, the last paragraph of the first part – is in the wording of the Decree of the President of the Republic of Kazakhstan, having the force of the Law, dated 27 January, 1996 No. 2830. It is amended – by the Laws of the Republic of Kazakhstan dated 11 July, 1997 No. 154; dated 16 July, 1999 No. 436; № 168-VІ as of 02.07.2018 (shall be enforced ten days after its first official publication).

Chapter 10 ACTIVITY OF THE NATIONAL BANK OF KAZAKHSTAN IN FOREIGN ECONOMIC RELATIONS. OPERATIONS WITH CURRENCY VALUES

      Footnote. Title of the Chapter is amended – by the Law of the Republic of Kazakhstan dated 11 July, 1997 No. 154.

Article 55. The relationship of the National Bank of Kazakhstan with banks in other states

      Footnote. Article is excluded – by the Law of the Republic of Kazakhstan dated 10 July, 2003 No. 483 (shall be enforced from 1 January, 2004).

Article 56. Functions of the National Bank of Kazakhstan in the field of currency regulation and currency control

      The National Bank of Kazakhstan as a body of currency regulation and currency control shall:

      1) determine the procedure for the circulation of currency valuables ​​in the Republic of Kazakhstan;

      2) determine the procedure for making foreign exchange transactions in the Republic of Kazakhstan, including the procedure for the purchase and sale of foreign currency in the domestic foreign exchange market of the Republic of Kazakhstan;

      3) set the qualification requirements for the implementation of activities on the organization of exchange transactions with foreign currency in cash;

      4) determine the licensing procedure and issue licenses and (or) annexes thereto for the organization of exchange transactions with foreign currency in cash;

      5) determine the procedure for organizing exchange transactions with foreign currency in cash, including the procedure for opening exchange offices and establishing limits for deviation of buying rates from selling rates of foreign currency in cash for national currency on transactions made through exchange offices of authorized banks and (or) authorized organizations;

      6) determine the procedure for monitoring foreign exchange transactions and submitting information on foreign exchange transactions and accounts of residents of the Republic of Kazakhstan with foreign banks, including the procedure for registering currency agreements on capital flows, notifications of foreign exchange transactions and accounts of residents of the Republic of Kazakhstan with foreign banks and submitting information for the purposes of monitoring foreign exchange transactions;

      7) determine the procedure for exercising export-import currency control in order to ensure the observance of the repatriation requirement by residents of the Republic of Kazakhstan;

      8) issue special permits for foreign exchange transactions under a special currency regime;

      9) in consultation with state authorities, within their competence, determine the procedure and forms for accounting and reporting on foreign exchange transactions that are binding on residents of the Republic of Kazakhstan and non-residents of the Republic of Kazakhstan in the Republic of Kazakhstan, as well as the procedure and deadlines for reporting by currency control agents;

      10) in cases of establishing facts of violation of the banking and currency legislation of the Republic of Kazakhstan by banks and other persons, impose sanctions provided for by the banking and currency legislation of the Republic of Kazakhstan.

      The National Bank of Kazakhstan has the right to perform other functions in the field of currency regulation and currency control in accordance with this Law, other laws of the Republic of Kazakhstan and acts of the President of the Republic of Kazakhstan.

      Footnote. Article 56 is excluded by Law of the Republic of Kazakhstan № 168-VІ as of 02.07.2018 (shall be enforced from 01.07.2019).

Article 57. Asset management in foreign currency and precious metals

      National Bank of Kazakhstan performs the following operations with assets in foreign currency and precious metals:

      buys and sells foreign currency;

      conducts operations with securities, issued and guaranteed by the Government of the Republic of Kazakhstan in foreign currency, by foreign governments or international financial organizations;

      opens accounts in banks of the Republic of Kazakhstan, foreign central banks, foreign banks and other financial institutions that have the appropriate authorization under the legislation of the states where they are registered, as well as in international financial institutions;

      opens and maintains an account, or acts as a representative or a correspondent for the foreign central bank, foreign banks and other financial institutions that have the appropriate authorization under the legislation of the states, where they are registered, foreign governments and their agents, as well as international financial institutions;

      carries out the acceptance and storage of refined gold, other precious metals;

      conducts operations in the purchase, sale, placement for storage and deposit of refined gold and other precious metals on the domestic and foreign markets, including the purchase of refined gold within the implementation of the priority right of the state;

      in accordance with the legislation of the Republic of Kazakhstan, imports assets in foreign currency and precious metals in the Republic of Kazakhstan, as well as exports them abroad to place on their accounts in foreign banks and specialized financial institutions;

      conducts securities transactions, the requirements for which are determined by the Board of the National Bank of Kazakhstan;

      conducts transactions with money market instruments with counterparties that have a credit rating, a minimum level of which is determined by the Board of the National Bank of Kazakhstan;

      conducts transactions with derivative financial instruments in accordance with the regulatory legal acts of the National Bank of Kazakhstan;

      opens and maintains metal accounts of the customer;

      performs other operations by decision of the National Bank of Kazakhstan.

      National Bank of Kazakhstan carries out any currency transactions without restrictions.

      To achieve the goals and objectives stipulated in this Law, the National Bank of Kazakhstan shall carry out the asset management in foreign currency and precious metals, ensuring their safety, liquidity and profitability in the long term with allowance for risk of assets investments and in accordance with the basic principles of their management.

      Footnote. Article 57 is in the wording of the Law of the Republic of Kazakhstan dated 05.07.2012 No. 30-V (shall be enforced upon expiry of ten calendar days after its first official publication); as amended by the Law of the Republic of Kazakhstan dated 21.06.2013 No. 106-V (shall be enforced upon expiry of ten calendar days after its first official publication).

Article 58. Gold and foreign currency reserves of the National Bank of Kazakhstan

      Gold and foreign currency reserves of the National Bank of Kazakhstan (hereinafter - gold and foreign currency reserves) shall be formed for the purpose of securing internal and external stability of Kazakhstani tenge from the assets of the National Bank of Kazakhstan, having high liquidity on the international markets of a capital and shall include:

      fine gold in bars and gold on metals accounts;

      reserve position in the International Monetary Fund and assets in the special drawing rights of the International Monetary Fund;

      assets in free convertible foreign currency, including cash money, deposits, placed in foreign banks, and securities, the emitters of which are the foreign governments or international financial organizations;

      other external assets, denominated in free convertible foreign currencies, having liquidity and possibility of use without restricted conditions.

      National Bank of Kazakhstan shall secure the maintenance of gold and foreign currency reserves on the level, required for securing stability and convertibility of the national currency, making payments on obligations of the Republic of Kazakhstan.

      Use of gold and foreign currency reserves in the form of issuing credits (loans, borrowed money) and provision of guarantees or other commitments to residents and non-residents of the Republic of Kazakhstan is not allowed, with the exception of cases, provided by decision of the Board of directors of the National Bank of Kazakhstan.

      Increase and change of the structure of gold and foreign currency reserves shall be performed by the National Bank of Kazakhstan by:

      purchase of fine gold for Kazakhstani tenge and foreign currency;

      purchase of assets in free convertible foreign currency for Kazakhstani tenge (including commemorative and souvenir coins) and foreign currency of residents and non-residents of the Republic of Kazakhstan, as well as of the Government of the Republic of Kazakhstan;

      proceeds in free convertible foreign currency of commission and other remunerations from deposit, contribution, dealing operations with foreign currency and operations with securities, denominated in foreign currency, as well as from the credits, provided by it in foreign currency;

      proceeds in gold and free convertible foreign currency from the sales, depositing and other operations with gold, conducted by the National bank of Kazakhstan, including proceeds from operations with securities of the National Bank of Kazakhstan, denominated in fine gold;

      proceeds in free convertible foreign currency from securities offerings in foreign currency by the National Bank of Kazakhstan;

      transfer of assets in foreign currency and precious metals to the gold and foreign currency reserves in accordance with basic principles of assets management in foreign currency and precious metals;

      proceeds from the credits, received by the National Bank of Kazakhstan from international financial organizations, central banks of foreign states and other creditors;

      proceeds in free convertible foreign currency from the services, rendered by the National Bank of Kazakhstan, in accordance with this Law and Regulation on the National Bank of Kazakhstan.

      Reduce and change of the structure of gold and foreign currency reserves shall be performed by the National Bank of Kazakhstan by:

      sales of free convertible currency for the purpose of conduct of monetary management, including a policy of exchange rate, and offset a disbalance of supply and demand on foreign currency on internal currency market;

      repayment and servicing of external debt of the Republic of Kazakhstan, fulfillment of obligations of the Government of the Republic of Kazakhstan and the National Bank of Kazakhstan, international obligations of the Republic of Kazakhstan, including international obligations of the National Bank of Kazakhstan, at the expense of budget and the budget (expenditure estimate) of the National Bank of Kazakhstan;

      payment of import of production (works, services), maintenance of diplomatic and other representative offices abroad, payment of business trip and representational expenses;

      sale of assets in free convertible foreign currency for purchasing other foreign currency;

      redemption of equity securities of the National Bank of Kazakhstan;

      refund of principal sum and remuneration on the credits, received by the National Bank of Kazakhstan, as well as payments of commission and other their accompanying expenses;

      transfer of gold and foreign currency reserves to the other assets in foreign currency and precious metals in accordance with basic principles of assets management in foreign currency and precious metals;

      sale of fine gold for Kazakhstani tenge and foreign currency;

      payment of expenses, linked with management and keeping of assets in foreign currency and precious metals;

      writing off of the detrimental gold and foreign currency reserves.

      Increase or reduction of gold and foreign currency reserves shall be performed as well as in the result of change of marketable value of assets, included in gold and foreign currency reserves, and operations of residents-owners of bank accounts in free convertible currency, opened in the National Bank of Kazakhstan.

      Footnote. Article 58 is in the wording of the Law of the Republic of Kazakhstan dated 05.07.2012 No. 30-V (shall be enforced upon expiry of ten calendar days after its first official publication); as amended by the Law of the Republic of Kazakhstan dated 21.06.2013 No. 106-V (shall be enforced upon expiry of ten calendar days after its first official publication).

Article 59. Priority right of the state on acquisition of fine gold for replenishment of assets in precious metals

      Footnote. Article 59 is excluded by Law of the Republic of Kazakhstan № 445-V as of 14.01.2016 (shall be enforced twenty-one days after its first official publication).

Article 60. Revaluation account of gold and foreign currency assets

      Footnote. Article 60 is excluded by the Law of the Republic of Kazakhstan dated 11.07.2009 No. 185-IV (shall be enforced from 30.08.2009).

Chapter 11. THE PROCEDURE FOR ORGANIZING AND CARRYING OUT OF CONTROL AND SUPERVISION OF FINANCIAL MARKET AND FINANCIAL ORGANIZATIONS AND IN THE SCOPE OF FINANCIAL LEGISLATION OF THE REPUBLIC OF KAZAKHSTAN

      Footnote. Chapter 11 is in the wording of the Law of the Republic of Kazakhstan dated 05.07.2012 No. 30-V (shall be enforced upon expiry of ten calendar days after its first official publication).

Article 61. The authority of the National Bank of Kazakhstan to exercise control and supervision

      1. The National Bank of Kazakhstan exercises control over and supervision of the financial market and financial institutions in the field of financial legislation of the Republic of Kazakhstan.

      Control and supervision in the field of financial legislation of the Republic of Kazakhstan provide for the National Bank of Kazakhstan to exercise, within its competence, control over and supervision of audited entities’ compliance with the requirements established by the banking legislation of the Republic of Kazakhstan, the legislation of the Republic of Kazakhstan on insurance and insurance activity, currency regulation and currency control, payments and payment systems, pension provision, securities market, accounting and financial reporting, credit bureaus and the formation of credit histories, mail, the Development Bank of Kazakhstan, microfinance organizations, collection activity, the Fund for guaranteeing insurance payments, counteracting the legalization (laundering) of proceeds from crime and the financing of terrorism, joint stock companies, investment funds, in the field of state statistics and other laws of the Republic of Kazakhstan, the identification of violations of the rights and legitimate interests of consumers of financial services, violations posing a threat to the national and economic security of the Republic of Kazakhstan, the stability of its financial system, identification of flaws and (or) risks in the activities of financial institutions, banking conglomerates and (or) insurance groups.

      2. Pursuant to control results, the National Bank of Kazakhstan, in accordance with this Law and other laws of the Republic of Kazakhstan, and in case of identification, in the course of its control activities, of audited entities’ failure to meet the requirements of the legislation of the Republic of Kazakhstan, deficiencies and (or) risks in the activities of financial institutions, banking conglomerates (or) insurance groups shall initiate administrative proceedings or apply other measures, including law-enforcement measures provided for by the laws of the Republic and Kazakhstan.

      Pursuant to supervision results, the National Bank of Kazakhstan, in accordance with this Law and other laws of the Republic of Kazakhstan, and in case of identification, in the course of its supervision activities, of audited entities’ failure to meet the requirements of the legislation of the Republic of Kazakhstan, deficiencies and (or) risks in the activities of financial institutions, banking conglomerates (or) insurance groups shall apply measures provided for by the laws of the Republic of Kazakhstan, including law-enforcement measures, without initiating administrative proceedings.

      3. The National Bank of Kazakhstan shall exercise control and supervision in the form of an inspection and other forms in accordance with this Law and other laws of the Republic of Kazakhstan.

      4. The National Bank of Kazakhstan cooperates with central banks, control and supervisory bodies of other states, international and other organizations and has the right to exchange confidential information that constitutes commercial secrets in the securities market, bank secrets, insurance secrets or other law-protected secrets, necessary for implementation of control and supervisory functions, on the basis and in accordance with the international treaty of the Republic of Kazakhstan, an agreement providing for the exchange of confidential information.

      In this paragraph, other organizations shall be understood as associations of central banks, control and supervisory bodies of other states set up for the purpose of developing common standards for regulating the activities of the banking sector, the securities market and the insurance market.

      Footnote. Article 61 as amended by Law of the Republic of Kazakhstan № 168-VІ as of 02.07.2018 (shall be enforced ten days after its first official publication);as amended by Law of the Republic of Kazakhstan № 217-VI as of 21.01.2019 (shall be enforced from 16.07.2018).

Article 62. Types of inspections of the National Bank of Kazakhstan

      1. The National Bank of Kazakhstan, independently or with the involvement of other state bodies and (or) organizations, carries out inspections based on risk assessment, unscheduled and documentary inspections of the activity of audited entities in a comprehensive or selective manner with regard to certain issues of their activity.

      2. An inspection based on risk assessment is an audit carried out by the National Bank of Kazakhstan with a visit to the audited entity and appointed by the National Bank of Kazakhstan based on the risk assessment in relation to the audited entity.

      An inspection of an entity based on risk assessment is carried out by the National Bank of Kazakhstan no more than once a year.

      The list of entities subject to inspection is compiled by the National Bank of Kazakhstan on a semi-annual basis, with account of risk assessment associated with the audited entities’ activities.

      The list of entities subject to inspection on the basis of risk assessment is approved by the Chairman of the National Bank of Kazakhstan or other authorized officials pursuant to the relevant order of the Chairman of the National Bank of Kazakhstan.

      3. An unscheduled inspection by the National Bank of Kazakhstan is carried out with a visit to an audited entity in the following cases:

      1) in connection with receipt of applications from individuals and legal entities and requests from state bodies submitted in the manner required by the legislation of the Republic of Kazakhstan, as well as receipt of other information about violations of the legislation of the Republic of Kazakhstan;

      2) in case of identification by the National Bank of Kazakhstan, in the course of its performance of control and supervisory functions, of violations of the requirements of the legislation of the Republic of Kazakhstan or flaws and (or) risks able to create a situation posing a threat to stable functioning of a financial institution, banking conglomerate, insurance group and (or) the interests of their customers;

      3) in the presence of a threat to the national and economic security of the Republic of Kazakhstan, the stability of its financial system;

      4) in order to control the elimination of violations of the requirements of the legislation of the Republic of Kazakhstan identified by a previous inspection.

      An unscheduled inspection may simultaneously cover activities of several entities with regard to their compliance with certain requirements of the legislation of the Republic of Kazakhstan.

      4. A documentary inspection is carried out by the National Bank of Kazakhstan without visiting an audited entity, in the form of a request for documents and information if signs of violations of the requirements of the legislation of the Republic of Kazakhstan are discovered in the process of analyzing primary statistical and administrative data or in connection with receipt of applications from individuals, legal entities and state bodies and other information requiring verification of compliance with the legislation of the Republic of Kazakhstan on issues within the competence of the National Bank of Kazakhstan.

      5) if a bank is classified as a bank with unstable financial situation posing a threat to the interests of its depositors and creditors and (or) stability of the financial system, and (or) classified as an insolvent bank.

      Footnote. Article 62 as amended by Law of the Republic of Kazakhstan № 269-V as of 29.12.2014 (shall be enforced from 01.01.2015); as amended by Law of the Republic of Kazakhstan № 168-VІ as of 02.07.2018 (see the enforcement procedure in Article 2).

Article 62-1. Carrying out of functions and powers on regulation and supervision of insurance activity

      Footnote. Is excluded by the Law of the Republic of Kazakhstan dated 10 July, 2003 No. 483 (shall be enforced from 1 January, 2004).

Article 62-2. General procedure for organizing and conducting an inspection based on risk assessment, an unscheduled inspection

      1. The National Bank of Kazakhstan carries out an inspection based on risk assessment and an unscheduled inspection pursuant to an inspection act approved by a Deputy Chairman of the National Bank of Kazakhstan, heads of territorial branches of the National Bank of Kazakhstan or other authorized officials on the basis of a relevant order.

      In cases of appointment of an inspection based on risk assessment or an unscheduled inspection, it is necessary to register inspection appointment acts in the register of inspection appointment acts. Subdivisions of the central office, territorial branches of the National Bank of Kazakhstan shall keep separate registers of inspection appointment acts.

      The National Bank of Kazakhstan shall register an inspection appointment act with the authorized body for legal statistics and special accounting within two working days of the inspection’s commencement.

      The inspection appointment act shall indicate:

      1) the act’s number and date;

      2) the surname, initials and position of inspecting employees, as well as persons entrusted with the inspection management;

      3) the name of the audited entity subject to the appointed inspection, its location;

      4) the type of inspection;

      5) issues to be checked;

      6) the duration of the inspection;

      7) the audited period.

      2. An inspection based on risk assessment, an unscheduled inspection is considered to have started on the date the audited entity’s head (his/her deputy) receives a copy of an inspection appointment act. After serving the audited entity with a copy of the inspection appointment act, it is necessary to acknowledge its receipt and familiarization with the inspection appointment act on the original copy.

      In cases of refusal to accept the inspection appointment act or denying inspecting officials of the National Bank of Kazakhstan access to the materials necessary for performing the inspection, it is necessary to draw up a corresponding act to be signed by the inspecting official of the National Bank of Kazakhstan. If an employee of the audited entity refuses to accept the inspection appointment act, it is necessary to make an appropriate entry in it. A refusal to accept an inspection appointment act is not a reason for canceling the inspection. If an audited entity refuses to provide documents and information within the time frames specified in requests of an inspection group, fails to observe the provisions of this article, which made the performance of the inspection within the established time limits impossible, the inspection shall be considered failed by decision of the inspection manager upon consultation with the official authorized to approve the inspection appointment act.

      Upon delivery of a copy of an inspection appointment act to an employee of the audited entity or its founder (one of the founders), a copy of the inspection appointment act with the acknowledgement of its receipt by the head (his/her deputy) of the audited entity must be submitted to officials of the National Bank of Kazakhstan within two working days of delivery of the inspection appointment act.

      If it is not possible to hand a copy of the inspection appointment act to an employee of the audited entity or its founder (one of the founders), it shall be sent by registered mail with return receipt to the place of registration of the audited entity and (or) its head (his/her deputy). If the letter is returned and it is impossible to hand an inspection appointment act within the time frames established for its performance, the inspection shall be considered failed. In this case, the inspection manager shall notify the official authorized to approve the inspection appointment act thereof in writing.

      3. The audited entity, within twenty-four hours of the inspection’s commencement, shall submit a letter to an inspection manager or an inspecting employee of the National Bank of Kazakhstan, containing the data on:

      1) a manager responsible for inspection arrangements and also for familiarization with and signing of an inspection completion act, an interim act and (or) inspection results act, and a person acting for him/her;

      2) specialists of the audited entity responsible for the preparation of necessary documents (information), their timely transfer to inspecting employees and (or) receipt of interim acts from inspecting employees.

      4. The duration of an inspection based on risk assessment, an unscheduled inspection may not exceed thirty working days. The duration of an inspection based on risk assessment, unscheduled inspection can be extended because of significant scope of the inspection, pursuant to an additional act on the extension of the inspection approved by a Deputy Chairman of the National Bank of Kazakhstan, heads of territorial branches of the National Bank of Kazakhstan or other authorized officials on the basis of a relevant order only once for a period not exceeding thirty working days, and in relation to a bank classified as a bank with unstable financial situation posing a threat to the interests of its depositors and creditors and (or) stability of the financial system, or as an insolvent bank - for a period of more than thirty working days.

      5. The audited entity is obliged to provide inspecting employees with a permit to enter their administrative buildings (also on holidays and weekends), a separate room for work equipped with office equipment and long-distance communications, provide access to information related to the activity of the audited entity, including automated systems and databases in real time mode without the possibility to correct data (in viewing mode with the possibility to output data on paper), provide inspecting employees with the opportunity to copy necessary documents, also electronically, and also provide explanations (oral and written) to the questions of inspecting employees and help them complete the inspection on time.

      6. Inspecting employees shall send written requests to the head of the audited entity, a manager responsible for inspection arrangements, or another authorized employee of the audited entity, which shall be executed within the specified time frames.

      The audited entity shall, on the day of receipt of the request from inspecting employees or within the time frames specified in the request, provide all the necessary information and documents, including copies thereof, for their inclusion in inspection materials.

      7. When replacing an inspecting employee (changing the composition of an inspection group), an additional act shall be drawn up indicating the number and date of the previous inspection appointment act and grounds for replacing the inspecting employee (changing the composition of the inspection group).

      8. The date of completion of an inspection based on risk assessment, unscheduled inspection shall be considered the date of delivery of the inspection completion act to the audited entity. The act on completion of the inspection based on risk assessment, unscheduled inspection is signed by the inspection manager and his/her immediate supervisor and is handed to the audited entity on or before the deadline of the inspection period specified in the inspection appointment act.

      Footnote. Article 62-2 as amended by Law of the Republic of Kazakhstan № 269-V as of 29.12.2014 (shall be enforced from 01.01.2015); № 422-V as of 24.11.2015 (shall be enforced from 01.01.2016); № 168-VІ as of 02.07.2018 (shall be enforced from 01.01.2019).

Article 62-3. Special aspects of conduct of documentary verification

      1. A documentary verification shall not require drawing up of an act on its appointment.

      2. During documentary verification, a request signed by an authorized official shall be directed to verified subject in order to clear additional circumstances and shall include:

      1) name of verified subject, its location area;

      2) ground of documentary verification;

      3) list of documents, that shall be presented to the National Bank of Kazakhstan or its department by a verified subject;

      4) period for presentation of requested materials;

      5) information, requiring explanations of verified subject, as may be required.

      3. A verified subject shall present requested documents and explanations not later than fifteen working days from the date of receiving request, unless otherwise established in the request.

      4. Completion of a documentary verification shall be the date of signing the conclusion on its results by an authorized official, not requiring signing of a verified subject.

Article 62-4. Other inspection-related issues

      1. If necessary, inspecting employees of the National Bank of Kazakhstan draw up interim acts submitted to the audited entity for familiarization.

      2. Within two working days of receipt of the interim act, the audited entity shall return one copy of the interim act signed by its head (his/her deputy) or the manager responsible for the inspection arrangements, and submit written objections to the inspection manager in case of any comments on the contents of the interim act.

      The conclusions set forth in interim acts are preliminary and may be revised in the inspection results act with account of objections received from the audited entity and additional information, including that from third parties.

      3. Within thirty working days of completion of an inspection on the basis of risk assessment, an unscheduled inspection, two copies of inspection results act signed by inspecting employees of the National Bank of Kazakhstan, an inspection manager and his/her immediate supervisor shall be sent to the head of an audited entity. 

      The following information shall be indicated in the inspection results act:

      1) the date and place of drawing up the act;

      2) the name of the inspecting body;

      3) the date and number of the inspection appointment act pursuant to which the inspection was conducted;

      4) the surname, initials and position of the person (s) who conducted the inspection;

      5) the name of the audited entity, its location, business identification number (if any), the surname, name, patronymic (if any) of the head of the audited entity or his/her representative;

      6) the place and duration of the inspection;

      7) information on the inspection results also on violations identified;

      8) information on the familiarization with the inspection results act by the audited entity’s head (his/her deputy) or manager responsible for the inspection arrangements, or by another person specified in paragraph 7 of this article;

      9) the signature of the inspecting official (s).

      The inspection results act may be accompanied by necessary documents (information) or their copies, related to the inspection results.

      4. The audited entity’s head (his/her deputy) or the manager responsible for the inspection arrangements shall accept the first copy of the inspection results act, initial each sheet of the second copy of the act, on its last sheet write the date of receipt indicating the position, surname, name, patronymic (if any) and send it to the National Bank of Kazakhstan within twenty-four hours of receiving the inspection results act. The audited entity shall inform its executive and other governing bodies about inspection results set forth in the inspection results act.

      5. If there are objections to the inspection results, the audited entity shall submit them in writing to the National Bank of Kazakhstan within ten working days of receipt of the inspection results act.

      6. The results of the inspection of the audited entity, set forth in the act on the results of the inspection based on risk level assessment, unscheduled inspection, if necessary, are considered at a meeting chaired by the Chairman of the National Bank of Kazakhstan (his/her deputies), heads of departments of the National Bank of Kazakhstan, persons entrusted with the management of the inspection, with the invitation of the heads of the audited entity.

      The results of the meeting are documented in the minutes signed by the chairman of the meeting, and within five working days of their signing are sent for review to the head of the audited entity. If there are any objections, the audited entity shall submit them in writing to the National Bank of Kazakhstan within three working days of receipt of the meeting’s minutes.

      If the National Bank of Kazakhstan disagrees with the audited entity’s objections to the minutes of the meeting, the final decision shall be made by the Chairman of the National Bank of Kazakhstan or his/her deputy and brought to the attention of the head of the audited entity.

      7. On the part of the audited entity, the act on the results of the inspection on the basis of risk assessment, unscheduled inspection shall be signed by its head, his/her deputy or the manager responsible for the inspection arrangements.

      In the absence of the head of the audited entity, his/her deputy or the manager responsible for the inspection arrangements, an act on the results of the inspection based on risk assessment, unscheduled inspection can be signed, on the part of the audited entity, by its founder (one of the founders) or another employee acting on behalf of the audited entity, also on the basis of an appropriate order and (or) power of attorney.

      8. In the absence of persons specified in paragraph 7 of this article and in case of impossibility of submitting an inspection results act to them for signing, the inspection results act shall be deemed executed on the date of signing the inspection results act by inspecting employees.

      9. The inspection results shall be used solely for the purpose of fulfilling its functions by the National Bank of Kazakhstan.

      10. The act on the results of the inspection based on risk assessment, unscheduled inspection cannot be used by the audited entity to confirm its financial viability for advertising or other purposes, and also transferred without the consent of the National Bank of Kazakhstan to third parties, except for cases provided for by the laws of the Republic of Kazakhstan.

      11. If there is a discrepancy in the documentary data of financial and other statements submitted by the audited entity to the National Bank of Kazakhstan with the information indicated in the act on the results of the inspection based on risk assessment, unscheduled inspection, the audited entity, on instructions from the National Bank of Kazakhstan, brings its statements into line with actual data specified in the inspection results act, also for previous reporting dates.

      12. The audited entity, within the time period established by the National Bank of Kazakhstan, submits for approval an action plan with planned measures, indicating responsible officers and deadlines for eliminating violations and flaws identified in the course of inspection.     

      After coordination of the action plan with the National Bank of Kazakhstan, the audited entity submits reports on the elimination of violations and flaws or clarification on the reasons for a failure to fulfill the obligations assumed under the action plan.

      13. The audited entity’s violation of the requirements, specified in part four of paragraph 2, paragraphs 3, 5 and 6 of Article 62-2, paragraph 3 of Article 62-3 of this Law, and also in paragraphs 2, 4 and 12 of this Article, is a reason for applying limited enforcement measures, supervisory response measures and sanctions provided for by the laws of the Republic of Kazakhstan to the audited entity or its head.

      14. Employees of the National Bank of Kazakhstan are prohibited from disclosing or transferring information obtained in the course of inspecting the activities of the audited entity to third parties.

      15. Inspecting persons shall bear responsibility for disclosing information obtained in the course of inspecting the activities of the audited entity and constituting a law-protected secret in accordance with the laws of the Republic of Kazakhstan.

      Footnote. Article 62-4 as amended by the Law of the Republic of Kazakhstan dated 21.06.2013 No. 106-V (shall be enforced upon expiry of ten calendar days after its first official publication); in the version of Law of the Republic of Kazakhstan № 269-V as of 29.12.2014 (shall be enforced from 01.01.2015); № 168-VІ as of 02.07.2018 (shall be enforced from 01.01.2019).

Article 62-5. Other forms of control and supervision

      National Bank of Kazakhstan and its department shall carry out other forms of control and supervision by:

      1) analysis of information and accounting, provided in accordance with requirements of the legislation of the Republic of Kazakhstan;

      2) remote supervision, also on a consolidated basis, in relation to financial institutions, their major participants, bank and insurance holding companies, organizations included in the banking conglomerate and insurance group, organizations guaranteeing insurance payments, in the manner established by the laws of the Republic of Kazakhstan;

      3) consideration of the documents on the issues of coordination, issue and revocation of authorization documents, agreements, licensing, registration of securities issues, approval of reports on sums of placement (redemption) of securities, invalidation of securities issues, provided by the Laws of the Republic of Kazakhstan, information on affiliated persons, within the competence, established by the legislation of the Republic of Kazakhstan.

      Note of the ILLI!
      Subparagraph 3-1) is meant to be amended by Law of the Republic of Kazakhstan № 168-VІ as of 02.07.2018 (shall be enforced from 16.12.2020).

      3-1) consideration, within the competence established by the legislation of the Republic of Kazakhstan, of documents required by a regulatory legal act regulating the procedure for notifying the National Bank of Kazakhstan of approval of financial products by financial institutions, branches of a non-resident bank of the Republic of Kazakhstan, branches of an insurance (reinsurance) organization that is a non-resident of the Republic Kazakhstan, as well as the list of documents attached to the notification, and Article 31-1 of the Law of the Republic of Kazakhstan “On Microfinance Organizations”;

      4) inspection of exchange offices of authorized organizations for compliance with qualification requirements;

      5) inspection of safety system and fulfillment of requirements to the premises, electronic and other equipment of participants of credit history system and data bases on insurance;

      6) direction of a representative to financial organizations in cases and in the manner, established by the Laws of the Republic of Kazakhstan;

      7) is excluded by Law of the Republic of Kazakhstan № 156-VI as of 24.05.2018 (shall be enforced ten days after its first official publication);

      8) monitoring issuers of equity securities for compliance with the requirements established by the legislation of the Republic of Kazakhstan on joint stock companies and the securities market, in the manner established by the laws of the Republic of Kazakhstan;

      9) consideration of accounting and other information, provided by temporary administrations (temporary administrators), liquidation commissions of banks, insurance (reinsurance) organizations;

      10) appointment and dismissal of the chairman and members of liquidation commissions in recognition of branches and representative offices of compulsorily liquidated bank, insurance (reinsurance) organizations;

      11) approval of intermediate liquidation balance sheet and register of requirements of creditors of compulsorily liquidated bank, insurance (reinsurance) organization, composition of a commission of creditors of voluntarily or compulsorily liquidated banks, insurance (reinsurance) organizations;

      12) coordination of report on liquidation and liquidation balance sheet of compulsorily liquidated bank, insurance (reinsurance) organization;

      13) giving instructions to agents of exchange control that are compulsory for their implementation for the purpose of proper exchange control;

      14) holding of meetings and discussions of verified subjects, based on the results of control and supervision of their activity;

      15) assessing (analyzing) the financial and property status of a bank classified as a bank with unstable financial situation posing a threat to the interests of its depositors and creditors and (or) stability of the financial system, as an insolvent bank, also with the involvement of appraisers, audit organizations and other persons and (or) a visit to the bank;

      16) is excluded by Law of the Republic of Kazakhstan № 156-VI as of 24.05.2018 (shall be enforced ten days after its first official publication);

      17) approval of report of temporary administration (temporary administrator) of bank, insurance (reinsurance) organization on performed work;

      18) analysis and evaluation of the functioning of payment systems, as well as services rendered by payment service providers;

      19) examination of participants in systemically important payment systems for compliance with the requirements for organizational measures and software and hardware that provide access to payment systems, as part of the monitoring of systemically important payment systems;

      20) maintaining registers of payment systems, payment organizations, important payment services providers;

      21) analyzing the activities of collection agencies for compliance with the requirements of the legislation of the Republic of Kazakhstan on the collection activity, and also by analyzing information, documents and materials of audio and (or) video recording (if any) submitted by the collection agency in accordance with subparagraph 15) of paragraph 1 of Article 15 of the Law Republic of Kazakhstan “On the Collection Activity”.

      Footnote. Article 62-5 as amended by the Law of the Republic of Kazakhstan dated 21.06.2013 No. 106-V (shall be enforced upon expiry of ten calendar days after its first official publication); № 203-V as of 16.05.2014 (shall be enforced six months after its first official publication); № 479-V as of 29.03.2016 (shall be enforced twenty-one days after its first official publication); № 12-VІ as of 26.07.2016 (shall be enforced thirty days after its first official publication); № 63-VI as of06.05.2017 (shall be enforced twenty-one days after its first official publication); № 156-VI оas of 24.05.2018 (shall be enforced ten days after its first official publication); № 168-VІ as of 02.07.2018 (see the enforcement procedure in Article 2).

Article 62-6. The authority of the National Bank of Kazakhstan to use a reasoned judgment

      1. The National Bank of Kazakhstan has the right to use a reasoned judgment in relation to banks, organizations carrying out certain types of banking operations, bank holdings, major bank participants, insurance (reinsurance) companies, insurance holdings, large participants in an insurance (reinsurance) company, insurance brokers, organizations guaranteeing insurance payments, professional participants in the securities market (except for organizations engaged in the transfer agent activity), major participants in investment portfolio managers.

      2. A reasoned judgment shall be understood to mean sound professional opinion of the collegial body of the National Bank of Kazakhstan, which is a cause for applying supervisory response measures established by the laws of the Republic of Kazakhstan, and also for making decisions in other cases provided for by this Law and other laws of the Republic of Kazakhstan.

      The National Bank of Kazakhstan has the right to use a reasoned judgment in case of:

      1) valuating goodwill for the presence or absence of impeccable business reputation, and also in case of assessing the financial situation for the presence or absence of unstable financial situation when issuing (refusing to issue) a permit to open a bank, insurance (reinsurance) company, giving consent to acquire the status of a major bank participant, a bank holding company, a major participant in an insurance (reinsurance) company, an insurance holding company, a large participant in an investment portfolio manager, permission for material participation of a bank and (or) bank holding company, insurance (reinsurance) company and (or) insurance holding company in the capital of organizations, permission to create or acquire a subsidiary by a bank and (or) bank holding company, insurance (reinsurance) company and (or) insurance holding, as well as consent to the appointment (election) to the position of an executive officer of a bank, bank holding company, insurance (reinsurance) company, insurance holding company, insurance broker, organization guaranteeing insurance payments, a professional participant in the securities market (except for organizations engaged in the transfer agent activity), considering notifications of organizations carrying out certain types of banking operations about the appointment (election) of executive officers, issuing licenses for banking or other operations, for the insurance (reinsurance) activity, for the activity of an insurance broker, activities in the securities market;

      2) identification of persons recognized as persons having special relations with a bank, insurance (reinsurance) company, establishment of facts of offering preferential terms by a bank, insurance (reinsurance) company to persons having special relations with them, as well as classifying transactions made by a bank, insurance (reinsurance) company as preferential ones;

      3) assessing the quality of the risk management and internal control systems of a bank and banking conglomerate, insurance (reinsurance) company and insurance group, a professional participant in the securities market (except for organizations engaged in the transfer agent activity) for the presence and implementation of effective internal policies and procedures appropriate to the nature, scope and complexity of their activity, as well as the size of the bank, banking conglomerate, insurance (reinsurance) company, insurance group, professional participant in the securities market;

      4) assessment of the adequacy of provisions (reserves) of a bank, insurance (reinsurance) company, professional participant in the securities market (except for organizations engaged in the transfer agent activity), insurance reserves formed by an actuary licensed to carry out the actuarial activity in the insurance market, and also for compliance of the methods for their formation with the risks of the bank, insurance (reinsurance) company, professional participant in the securities market, as well as the reliability of information used for their formation.

      3. The composition of the collegial body of the National Bank of Kazakhstan, indicated in part one of paragraph 2 of this article, shall be approved by the Executive Board of the National Bank of Kazakhstan from among the Deputy Chairmen of the National Bank of Kazakhstan, heads of structural divisions and departments of the National Bank of Kazakhstan. Meetings of the collegial body of the National Bank of Kazakhstan are chaired by one of the Deputy Chairmen of the National Bank of Kazakhstan.

      The National Bank of Kazakhstan shall use a reasoned judgment with observance of the principles of legality, validity, objectivity and the uniform approach.

      A reasoned judgment shall be based on information received in the course of control over and supervision of the activities of individuals, specified in paragraph 1 of this article, performed by the National Bank of Kazakhstan, and other information received from individuals and legal entities, international organizations, government bodies, including foreign supervisory authorities and organizations, other available sources, which is essential for the formation of a reasoned judgment.

      When forming a reasoned judgment, the National Bank of Kazakhstan shall take into account, if any, explanations of the persons specified in paragraph 1 of this article.

      The draft reasoned judgment shall be sent to the person specified in paragraph 1 of this article. The person specified in paragraph 1 of this article shall, within five working days, submit to the National Bank of Kazakhstan a reasoned response containing consent or disagreement with the draft reasoned judgment. A failure by the person specified in paragraph 1 of this article to submit a reasoned response within the prescribed time frames shall be deemed as consent to the draft reasoned judgment.

      Based on the results of consideration of a reasoned response containing disagreement with the draft reasoned judgment submitted by the person specified in paragraph 1 of this article, the National Bank of Kazakhstan decides on the need to submit the draft reasoned judgment for consideration to the collegial body of the National Bank of Kazakhstan.

      4. In case of disagreement with a supervisory response measure applied by the National Bank of Kazakhstan on the basis of a reasoned judgment, the person specified in paragraph 1 of this article, within ten working days of application of the supervisory response measure, has the right to submit its objections to the National Bank of Kazakhstan in writing.

      Objections regarding the application of the supervisory response measure shall be considered at a meeting attended by the Chairman of the National Bank of Kazakhstan or submitted for consideration of the Executive Board of the National Bank of Kazakhstan upon the proposal of the Chairman of the National Bank of Kazakhstan. If the supervisory response measure applied on the basis of a reasoned judgment can result in decreasing prudential standards and other mandatory norms and limits below the established values, the objections received shall be considered by the Executive Board of the National Bank of Kazakhstan. Representatives of the person specified in paragraph 1 of this article are entitled to participate in the consideration of objections.

      Objections must be considered within ten working days of their receipt. The term for consideration of objections may be extended only once for a period not exceeding ten working days.

      Based on the results of consideration of the objections of the person specified in paragraph 1 of this article, the National Bank of Kazakhstan shall send a written notice of substantiated disagreement with the objections or cancellation of the supervisory response measure applied by the National Bank of Kazakhstan.

      A supervisory response measure applied on the basis of a reasoned judgment shall take effect upon expiration of the time period specified in part one of this paragraph or from the day of sending to the person, specified in paragraph 1 of this article, of a written notice of substantiated disagreement with the objections, if any.

      The person specified in paragraph 1 of this article has the right to appeal against a supervisory response measure applied on the basis of a reasoned judgment in a judicial proceeding.

      The National Bank of Kazakhstan is liable under the Civil Code of the Republic of Kazakhstan for decisions recognized as unlawful, which were based on a reasoned judgment.

      5. The National Bank of Kazakhstan, with account of confidentiality requirements, shall publish the summary of incidents of practical application of supervisory response measures using a reasoned judgment.

      6. The procedure for the formation and use of a reasoned judgment is determined by the regulatory legal act of the National Bank of Kazakhstan.

      7. Shall be enforced from 16.12.2020 in accordance with Law of the Republic of Kazakhstan № 168-VІ as of 02.07.2018.
      Footnote. Chapter 11 is supplemented with Article 62-6 in accordance with Law of the Republic of Kazakhstan № 168-VІ as of 02.07.2018 (shall be enforced from 01.01.2019).

Article 63. Prudential regulations and other norms and limits, compulsory for compliance

      Footnote. Article 63 as amended by the Law of the Republic of Kazakhstan dated 11 July, 1997 No. 154; dated 2 March, 2001 No. 162 (see Article 2); Article is excluded by the Law of the Republic of Kazakhstan dated 10 July, 2003 No. 483 (shall be enforced from 1 January, 2004).

Article 64. Requirements, specified to employees of banking supervision of the National bank of Kazakhstan

      Footnote. Article 64 as amended by the Law of the Republic of Kazakhstan dated 11 July, 1997 No. 154; dated 16 July, 1999 No. 436; dated 2 March, 2001 No. 162 (See Article 2); Article is excluded by the Law of the Republic of Kazakhstan dated 10 July, 2003 No. 483 (shall be enforced from 1 January, 2004).

Chapter 12. ACCOUNTING OF THE NATIONAL BANK OF KAZAKHSTAN

Article 65. Financial year

      The financial year of the National Bank of Kazakhstan shall begin on 1 January and end on 31 December on calendar estimation.

Article 66. Reporting

      National Bank of Kazakhstan shall annually present the annual report on approval of the President of the Republic of Kazakhstan.

      The President of the Republic of Kazakhstan shall consider the annual report of the National Bank of Kazakhstan and adopt decision on its approval.

      Footnote. Article 66 is in the wording of the Decree of the President of the Republic of Kazakhstan, having the force of the Law, dated 5 December, 1995 No. 2672; as amended by the Laws of the Republic of Kazakhstan dated 16 July, 1999 No. 436; dated 10 July, 2003 No. 483 (shall be enforced from 1 January, 2004); dated 5 July, 2006 No. 165 (the order of enforcement See Article 2); dated 11.07.2009 No. 185-IV (shall be enforced from 30.08.2009); dated 05.07.2012 No. 30-V (shall be enforced upon expiry of ten calendar days after its official publication).

Article 67. Annual report

      The annual report of the National Bank of Kazakhstan shall include:

      - report on monetary policy and condition of financial market;

      - report on activity of the National Bank of Kazakhstan in expired year;

      - annual consolidated financial reporting of the National Bank of Kazakhstan.

      Footnote. Article 67 as amended by the Decree of the President of the Republic of Kazakhstan, having a force of the Law, dated 5 December, 1995 No. 2672; by the Laws of the Republic of Kazakhstan dated 11 July, 1997 No. 154; dated 16 July, 1999 No. 436; dated 10 July, 2003 No. 483 (shall be enforced from 1 January, 2004); dated 8 July, 2005 No. 69.

Article 68. Audit of activity of the National Bank of Kazakhstan

      By the decision of the Board of directors of the National Bank of Kazakhstan, an audit of financial accounting of the National Bank of Kazakhstan shall annually be conducted by an audit organization, having experience of an audit of the central bank of the state – a member of Organization for Economic Cooperation and Development (OECD) or countries of Commonwealth of Independent States (CIS).

      Any information, received during verification shall be recognized as confidential and an audit organization shall bear responsibility for its transfer to third parties.

      Audit of activity of the National Bank of Kazakhstan and its organizations by all the state bodies shall be carried out only with the consent or under the instruction of the President of the Republic of Kazakhstan.

      Footnote. The third part of Article 68 as amended by the Decree of the President of the Republic of Kazakhstan, having a force of the Law, dated 5 December, 1995 No. 2672; by the Law of the Republic of Kazakhstan dated 10 July, 2003 No. 483 (shall be enforced from 1 January, 2004); dated 8 July, 2005 No. 69; dated 11.07.2009 No. 185-IV (shall be enforced from 30.08.2009).

Chapter 13 FINAL PROVISIONS

Article 69. Liquidation of the National Bank of Kazakhstan

      The National Bank of Kazakhstan may be liquidated by adoption of the relevant Law of the Republic of Kazakhstan. In case of liquidation of the National Bank of Kazakhstan, its property shall be transferred to a legal successor, mentioned in the relevant Law.

      Footnote. Article 69 as amended by the Decree of the President of the Republic of Kazakhstan, having a force of the Law, dated 5 December, 1995 No. 2672.
      Note of the ILLI!
      Article 70 is meant to be amended by Law of the Republic of Kazakhstan № 422-V as of 24.11.2015 (shall be enforced from 16.12.2020).

Article 70. Powers on receipt of information

      In the purpose of securing the qualitative and timely fulfillment of the functions, assigned on the National Bank of Kazakhstan, the National Bank of Kazakhstan shall have the right to receive the required information without charge from any individuals and legal entities, as well as state bodies, including information, composing official, commercial, bank and other privacy, protected by the Law. By this, the received information shall not be subject to disclosure.

      State bodies, financial and other organizations, their associations (unions), as well as individuals shall be obliged to provide the documents, accounting, including financial, and other additional information in case of necessity, required for fulfilling the functions of the National Bank of Kazakhstan upon the request of the National Bank of Kazakhstan.

      Footnote. Article 70 is in the wording of the Law of the Republic of Kazakhstan dated 05.07.2012 No. 30-V (shall be enforced upon expiry of ten calendar days after its first official publication).

Article 70-1. Compensatory nature of services, rendered by the National bank of Kazakhstan

      National Bank of Kazakhstan shall have the right to make banking operations and other services on a paid basis. Types and amounts of payment for the services rendered by it shall be determined by the National Bank of Kazakhstan on an independent basis.

      National Bank of Kazakhstan shall not charge for banking and other services, rendered to the Government of the Republic of Kazakhstan and central authorized body for budget execution, with the exception of services on management of the National fund of the Republic of Kazakhstan, other funds and organizations.

      Note of the ILLI!
      Part three of Article 70-1 is meant to be amended by Law of the Republic of Kazakhstan № 422-V as of 24.11.2015 (shall be enforced from 16.12.2020).

      National Bank of Kazakhstan shall render the public services to individuals and legal entities on a paid basis in cases, provided by the regulatory legal acts of the Republic of Kazakhstan. Amounts of payment for the public services, rendered by it shall be determined by the tax legislation of the Republic of Kazakhstan.

      Footnote. Article 70-1 is supplemented by the Law of the Republic of Kazakhstan dated 11 July, 1997 No. 154; in the wording of the Law of the Republic of Kazakhstan dated 3 May, 2001 No. 182; as amended by the Laws of the Republic of Kazakhstan dated 10 July, 2003 No. 483 (shall be enforced from 1 January, 2004); dated 5 July, 2006 No. 165 (the order of enforcement See Article 2); dated 05.07.2012 No. 30-V (shall be enforced upon expiry of ten calendar days after its first official publication); dated 21.06.2013 No 106-V (shall be enforced upon expiry of ten calendar days after its first official publication).

Article 71. Limitation periods

      Limitation periods shall not apply to credited parties on improper execution of credit agreements on requirements of the National Bank of Kazakhstan.

      Footnote. Article 71 is in the wording of the Law of the Republic of Kazakhstan dated 05.07.2012 No. 30-V (shall be enforced upon expiry of ten calendar days after its first official publication).

Article 72. Responsibility of the National Bank of Kazakhstan

      National Bank of Kazakhstan shall bear responsibility for nonfulfillment of its obligations in the manner, established by the Laws of the Republic of Kazakhstan.

      Footnote. Article 72 is in the wording of the Law of the Republic of Kazakhstan dated 05.07.2012 No. 30-V (shall be enforced upon expiry of ten calendar days after its first official publication).

Article 73. Conflict of interests

      Footnote. Article 73 as amended by the Law of the Republic of Kazakhstan dated 11 July, 1997 No. 154; Article is excluded by the Law of the Republic of Kazakhstan dated 10 July, 2003 No. 483 (shall be enforced from 1 January, 2004).

Article 74. Enforcement of this Law

      Footnote. The title of Article as amended by the Law of the Republic of Kazakhstan dated 11 July, 1997 No. 154.

      This Law shall enter into force from the date of publication.

      The President
      of the Republic of Kazakhstan

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