Document from CIS Legislation database © 2003-2019 SojuzPravoInform LLC

LAW OF THE REPUBLIC OF KAZAKHSTAN

of August 31, 1995 No. 2444

About banks and banking activity in the Republic of Kazakhstan

(The last edition from 02-04-2019)

Section I. Bases and conditions of creation and activities of banks

Chapter 1. General provisions

Article 1. Bank, its status and location

1. Bank - the legal entity, being the commercial organization which according to this Law is competent to perform banking activity.

2. The official status of bank is determined by state registration of the legal entity as bank in The Government for Citizens State corporation (further - Corporation) and availability of the license of National Bank of the Republic of Kazakhstan for carrying out banking activities.

3. Any legal entity who does not have the official status of bank cannot hereinafter be referred to as as "bank" or characterize itself as engaged in banking activity.

4. The location of bank the location (postal address) of its board is recognized.

Article 2. The basic concepts used in this Law

In this Law the following basic concepts are used:

1) control - opportunity to determine decisions of the legal entity, arising in the presence of one of the following conditions:

immediate or indirect possession by one person independently or together with one or several persons in more than fifty percent of shares in the authorized capital or placed (less exclusive and redeemed by society) shares or opportunity availability to vote independently in more than fifty percent of shares;

opportunity availability at one person independently to choose at least a half of structure of governing body or executive body of the legal entity;

inclusion of the financial reporting of the legal entity, except for the financial reporting of the special finance company created according to the legislation of the Republic of Kazakhstan on project financing and securitization in the financial reporting of other legal entity according to the audit report;

availability of possibility of one person independently or together with one or several persons to determine decisions of the legal entity owing to the agreement (supporting documents) or otherwise in the cases provided by regulatory legal act of authorized body;

2) indirect possession (vote) by bank shares - opportunity to determine decisions of bank, the large member of bank, bank holding or persons who jointly are the large member of bank, bank holding through shareholding (shares in the authorized capital) legal entities;

2-1) interbank clearing - assembly, reconciliation, sorting and payment confirmation, and also carrying out their offset and determination of net line items of participants of clearing - the banks and the organizations performing separate types of banking activities;

3) banking conglomerate - the group of legal entities consisting of bank holding (in the presence) and bank, and also the affiliated organizations of bank holding and (or) the affiliated organizations of bank, and (or) the organizations in which the bank holding and (or) its affiliated organizations, and (or) bank have considerable equity participation.

The national managing holding, bank nonresident holding of the Republic of Kazakhstan, and also the affiliated organizations and the organizations in which the bank nonresident holding of the Republic of Kazakhstan has considerable equity participation, being nonresidents of the Republic of Kazakhstan are not part of banking conglomerate;

3-1) subordinated debt of bank - the unsecured obligation of bank on the issued bonds or the obtained loan corresponding to conditions, the stipulated in Article 16-1 this Law;

3-2) information system of bank or the organization performing separate types of banking activities (further - information system), - the system intended for storage, processing, search, distribution, transfer and provision of information using the hardware and software by means of which banking and other services are provided;

4) bank holding - the legal entity (except as specified when such owner is the state or national managing holding, the organization specializing in improvement of quality of credit portfolios of banks of the second level, the affiliated organizations of National Bank of the Republic of Kazakhstan, and also the cases provided by this Law) who according to written consent of authorized body can own directly or indirectly twenty five or more percent placed (less exclusive and redeemed by bank) bank shares or to have opportunity:

vote directly or indirectly in twenty five or more percent of voting shares of bank;

determine the decisions made by bank owing to the agreement or otherwise or have control;

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