Экономические науки/ Банки и банковская система

 

Маер О.И.

Университет международного бизнеса, Казахстан

Institutional structure and legal regulation of major credit financial institutions in the Republic of Kazakhstan

 

Due to recent developments on the global financial arena, many economists are beginning to believe that perhaps it is the qualitative structure of the credit system of the state that may be the one pillar on which it is possible to develop the real sector. And this support must be formed by the normative-legal regulation of activity of the leading lending institutions with regular monitoring of their financial condition that should satisfy the needs of the global credit infrastructure.

Institutional structure of the credit system of the Republic of Kazakhstan can be subject to the following sectoral breakdown:

1)    First, and probably the largest segment is the republic banking sector, which includes the National Bank of Kazakhstan, the second-tier banks (commercial banks, organizations engaged in certain types of banking transactions (mortgage companies, credit unions, leasing companies, pawnshops, etc.) as well as other organizations and financial sector credit (microcredit governmental organizations, credit bureaus, etc.).

2)    The second volume in the credit system is taken by insurance market of the Republic of Kazakhstan, which includes insurance and reinsurance organizations.

3)    And third, but not the least in the significance of their work is the pension funds system: pension funds, organizations engaged in the investment management of pension assets.

Theoretically, most often the structure of the credit system of the state are the two interrelated and interdependent subsystems: the banking and para-banking, each with its elements, authorities responsible for management activities, its legal framework, and spectrum performed in the financial sphere of the functions and tasks for the formation and direction of movement of financial flows, accumulating temporarily surplus funds and stimulating economic entities and population.

In its most general form, according to the above standard described in the theory of the structure of Kazakhstan's credit system can be represented schematically in Figure 1:

 

 

 

 

 

 

 

 

 

 

 

 

 


Figure 1 - Structure of the credit system of the Republic of Kazakhstan

 

The legal basis for the functioning of the credit system is based on the Code of the Republic of Kazakhstan, in which laws and regulations for each segment of the financial sector are concentrated and systematized.

Fundamental Laws of the Republic of Kazakhstan, handling relations between the parties of financial and credit system are the following:

1)    The Law “On the National Bank of the Republic of Kazakhstan”, which defines the objectives, principles, legal status and powers of the National Bank.

2)    The Law “On Banks and Banking in the Republic of Kazakhstan”, defining the legal status, establishment, licensing, regulation and termination of the banks and institutions performing certain types of banking opera.

3)    The Law “On State Regulation and Supervision of Financial Market and Financial Organizations,” regulates social relations arising from the implementation of state regulation and supervision of financial markets and financial institutions.

4)    The Law “On pension provision in the Republic of Kazakhstan” defines the legal and right social foundations of pensions of citizens in the Republic of Kazakhstan, regulates the participation of state bodies, legal entities and individuals, regardless of ownership, in realization of the constitutional rights of citizens for pension benefits.

5)    The Law “On insurance activity”, which determines the provisions for the implementation of insurance as a form of entrepreneurial activity, especially the creation, licensing, regulation and termination of insurance (reinsurance) by companies and insurance brokers.

6)    The Law “On licensing”, which regulates the licensing of certain activities, and establishing a comprehensive list of licensed activities and sub-activities, and other laws of the Republic of Kazakhstan.

The above legislation and other normative acts in the functioning of credit and financial institutions constitute the Financial activities “constitution” of the major financial market participants.

The modern banking system of Kazakhstan has developed as a result of various transformations carried out within the framework of the banking reform, which was launched in 1987.

The transitional period during which old and new banking institutions coexisted, was comparatively short. As a result, the Republic has developed a two-tier banking system, the first level is represented by the National Bank, and the second or lower level form government, commercial, cooperative and foreign banks.

National Bank of Kazakhstan is the country's central bank and is the top level two-tier banking system of Kazakhstan. Structure of the National Bank is shown in Fig. 2, below.

The structure shown in Figure 2, can undergo changes as part of administrative reforms. The Administrative Board ensures the participation of the President Administration and the Government in the development and approval of the monetary policy of the National Bank.

The National Bank is the main bank in Kazakhstan and is owned by the by the state. On the one hand, it is a legal entity exercising certain civil transactions with commercial banks and the state. On the other hand, it also has broad authority to manage the authoritative monetary system of the republic, which are enshrined by the Law “On National Bank of the Republic of Kazakhstan”.

 

 

 

 

 

 

 

 

 

 


Figure 2 - Structure of the National Bank of Kazakhstan

 

In recent years special attention to the structure of the credit system of paying sector organizations engaged in certain types of banking operations. Today the organization, carrying out certain banking operations - is a legal person other than a bank, which is authorized to conduct certain banking transactions by a licensed authorized body and (or) the National Bank or pursuant to a law of the Republic of Kazakhstan. At the same time the law stipulates that a legal entity established in any legal form, with the exception of the production cooperative and not being a Bank, may obtain a license for individual types of banking and other operations, and will be referred to as a provider of certain types of banking or a non-bank entity.

The main types of organizations conducting certain banking operations are presented in Fig. 3.

 

 

 

 

 

 

 

 

 

 

 


Figure 3 - The main types of non-banks

 

It should be noted that non-banks legislative organizations are prohibited to engage in certain types of banking transactions such as deposits, opening and maintaining bank accounts of legal entities and individuals, opening and maintenance of metal accounts of individuals and entities that are reflected in the physical quantity of refined precious metals and coins made of precious metals belonging to the person, except for cases preamplifier of the legislation of the Republic of Kazakhstan. These transactions can only be carried out by second-tier banks in our country.

And, of course, one of the leading positions in the banking sector of the country is occupied by commercial banks (commercial banks). Among the commercial banks of Kazakhstan there are 39 STB, 1 of which is represented by 100% state participation. Today we can say that Kazakhstan's banking sector has seen better days, but the statistics in recent months gives us confidence in the improvement of financial stability and profitability of the sector.

In summary, it should be noted that the institutional structure of the credit system of the Republic of Kazakhstan is still undergoing significant changes, introducing new laws to ensure the stability of the credit sector of the country, new rules, transforming sectoral breakdown of the system, continuing its development in conformation with the world demands.

References:

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3.     Закон РК «О лицензировании» от 11 января 2007 года № 214

4.     Закон РК «О Национальном Банке Республики Казахстан» от 30 марта 1995 года N 2155

5.     Закон РК «О пенсионном обеспечении в РК» от 20 июня 1997 года № 136-I

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