LETTER OF NATIONAL BANK OF THE REPUBLIC OF KAZAKHSTAN

of June 22, 2011 No. 29203/1550

National Bank of the Republic of Kazakhstan, having considered your letter No. 18 of June 13, 2011 concerning electronic money, reports the following.

On the first question.

The so-called system of advance payments given in your letter which activities consist in acceptance of payments from the population for benefit of service providers is not and cannot be carried by determination to electronic payment system. Work of similar system is not connected with operator function on issuance and servicing of transactions with electronic money in any way.

For the purpose of complete understanding of distinctive features in works of the specified systems we note that the so-called system of advance or instant payments provides acceptance (collection) of payments from consumers for benefit of service providers and finishing information on each carried-out payment to the relevant service provider for the subsequent accounting (reflection) in its billing system. At the same time, information on the accepted payment or the carried-out payment transferred by similar system to the service provider (after acceptance of money from the consumer) cannot be equated to electronic money. At the same time, forming and transfer by system of such information (the electronic message) also does not mean carrying out the payment and does not guarantee its completion. The payment on the operations performed in the specified system is made (comes to the end) by means of real money by transfer to the bank account of the service provider.

In addition we note that electronic money represents the independent instrument of payment and acts as object of the civil laws. Their input in the address can be performed by the corresponding issuer (bank) having on it legitimate right and power according to the legislation of the Republic of Kazakhstan (after release of the relevant law).

On the second question.

Availability of such sign at system (money transfer between users) does not determine its status as electronic payment systems. Work of any electronic system providing carrying out money transfers between users of such system cannot be treated and be considered from line item of functioning of electronic payment system.

For example, in the market make the activities various money transfer systems (system of the urgent translations) or system of payment cards based on banks of the second level. These systems provide interaction of participating banks of system and exchange of necessary information between them when implementing electronic payments and money transfers by their clients. However, these systems are not and do not belong to electronic payment systems.

At the same time, operators of the above-stated systems of advance or instant payments for benefit of service providers have no right (power) to implementation of activities for carrying out and servicing of money transfers between physical persons and/or legal entities. These subjects perform the activities based on subitem regulation 2) of Item 3 of article 30 of the Law of the Republic of Kazakhstan "About banks and banking activity" (further - the Law on banks) according to which do not treat banking activities the acceptance from consumers of cash in payment for the provided services performed by the attorney acting for and on behalf of the principal (service provider) based on the agreement of the order including via electronic terminals.

According to the subitem 6) of Item 2 of article 30 of the Law on banks the activities connected with implementation of payments and money transfers on accomplishment of orders of clients belong to banking (translated) activities, and, respectively, are subject to licensing according to the legislation of the Republic of Kazakhstan. Therefore, this type of activity, including servicing of transactions on money transfers between physical persons, can be performed only by the banks and the organizations performing separate types of banking activities based on the corresponding license of authorized state body.

On the third question.

The current legislation of the Republic of Kazakhstan does not provide possibility of implementation of payments with use of money of the subscribers who are on "subscriber accounts" of mobile operators.

Implementation of activities for servicing and carrying out payments and money transfers perhaps only in the presence of the banking license on translated transactions (article 30 of the Law on banks), respectively, its carrying out is allowed only to the banks and the organizations performing separate types of banking activities.

Now the Law on banks establishes the exhaustive list of the organizations having the right to the license for translated transactions. Because mobile operators, implementation of banking activity by mobile operators and provision from their party of payment services to the subscribers are not part of the specified organizations contradicts the legislation of the Republic of Kazakhstan.

As for possibility of use of electronic money, release and the address of electronic money shall be performed in the strict compliance and procedure established by the regulations of the legislation of the Republic of Kazakhstan regulating procedure for the address of electronic money (after release of the relevant law).

On the fourth and fifth questions.

Now the concept and legal status of electronic money are not fixed by the legislation of Kazakhstan that does not give the chance to use them on legal causes for making of civil transactions and other transactions.

Because the current legislation of the Republic of Kazakhstan does not contain the necessary legislative arrangements fixing possibility of use of electronic money and procedure for their address in the territory of the republic, we find it possible to start creation and promotion of electronic payment system after adoption of the relevant bill and bylaws of National Bank.

At the same time we report that consideration of Parliament of the Republic of Kazakhstan of the bill "About Modification and Amendments in Some Legal Acts of the Republic of Kazakhstan concerning Electronic Money" by the Majilis taking into account the amendments made by the Senate of Parliament of the Republic of Kazakhstan is planned for June 22, 2011. In case of approval at this meeting of the Majilis of Parliament of the Republic of Kazakhstan the bill will be provided for the signature to the Head of state. At the same time, development and adoption of the relevant bylaws of National Bank will be performed within a month after release of the specified bill.

Isp. Ashykbekov E. T.

Ph. 2-704-675

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