The new draft of the Banking Law includes measures to improve banking regulation to enhance quality of corporate governance and effectiveness of supervisory mechanisms.

 Madina Abylkassymova, Chairperson of the Agency for Regulation and Development of the Financial Market, made this statement at a presentation to the Majilis of Parliament of the draft laws ‘Banks and Banking Activities in the Republic of Kazakhstan’ and ‘Changes and Amendments to Certain Legislative Acts of the Republic of Kazakhstan on the Regulation and Development of the Financial Market.’ The draft laws were developed for the purpose to implement the 2024 and 2025 Addresses of the Head of State.

The amendments are grouped into three areas: development of corporate governance, improvement of regulatory instruments, and optimization of the existing standards.

"The draft law provides for enhancement of the institution of independent directors to ensure objectivity and independence of their decisions. Additional requirements for their independence are introduced, as well as setting the maximum term of office on the board of directors to nine years," Madina Abylkassymova said.

Along with that, list of persons with special relations with the bank is being expanded, given the criteria applied in the international financial reporting standards.

To expedite return of assets to economic circulation, a further limitation on the maximum period for recovered assets to remain on the banking group's balance sheet to three years is being introduced.

"Use of the reasoned judgment mechanism is to be expanded. Requirements are to be established for heads of departments in charge of risks, internal audit, and compliance," added the ARDFM Head.

Moreover, within optimization of the regulatory framework, outdated and duplicate provisions are being eliminated, and requirements for shareholders and management are being unified and transferred to the Law of the Republic of Kazakhstan "State Regulation, Control, and Supervision of the Financial Market and Financial Organizations."

The new Banking Law takes into account technological changes, growing role of the banking sector in economic financing, increased competition, and involvement of new market participants, as well as issues of promoting the fintech and liberalizing the circulation of digital assets.

Source : https://www.gov.kz/memleket/entities/ardfm/press/news/details/1071056?lang=kk