Kazakh Senate passes bill prohibiting foreign currency mortgage loans17 november 2015, 16:27
Kazakh Senate, the upper house of Kazakhstan’s Parliament, has ratified a bill “On amendments and additions to some legislative acts of Kazakhstan on non-performing loans and assets of second-tier banks, financial institutions providing financial service and involved in other activities, and the National Bank of Kazakhstan” in two successive readings, Tengrinews reports.
Deputy Chairman of the National Bank of Kazakhstan Kuat Kozhakhmetov presented the draft law to the Senators. He explained that the main goal of the bill was to strengthen the protection of the rights of borrowers, improve the stability of the financial system and facilitate the development of capital markets and introduction of Islamic finance in Kazakhstan.
“To strengthen the protection individual borrowers and reducing the debt burden, this bill bans issuance of mortgage loans in foreign currency to individuals who do not have income in the foreign currency, and prioritizes repayment of principal over penalties and fines for non-performing loans. To increase transparency of banking services, the bill obliges banks to set commercial loans at a fixed rate without any additional fees and charges, and prohibits banks from unilaterally changing loan agreements, except for cases when the changes improve the terms of the agreement for the borrower (with prior notification)," Kozhakhmetov said.
Other than that, the bill provides for compensation payments to depositors, who, as of August 1, had bank deposits amounting to less than 1 million tenge. Additionally, there are rules that ban transactions that have the purpose of manipulating the market exchange rate and introduce penalties for making such transactions.
A bill was then sent to Kazakhstan’s President Nursultan Nazarbayev for signing.
Reporting by Assemgul Kassenova, writing by Assel Satubaldina, editing by Tatyana Kuzmina