Central Bank toughens requirements to borrowers

Kazakhstan-based banks will be obliged to turn down applications for loans by clients if the monthly payments exceed 50% of the clients’ income, the country’s National Bank’s resolution reads.When deciding on providing a loan, second-tier banks shall examine the total amount of any outstanding loans a client has had for the last 6 months and his/her average monthly income for the same period.Should monthly loan payments exceed 50% of the monthly income, the bank shall neither provide any new loans nor raise the current credit limits.The new resolution comes into force April 1, 2014.At the extended government sitting mid-February Kazakhstan’s President Nursultan Nazarbayev commissioned banks’ heads to reduce the share of NPLs “in any possible ways” to 15% of their portfolio by 2015 and further to 10% by 2016.As of December 1, 2013 NPLs stood at 31.4% of the overall banks’ portfolio, 19.7% up against the start of 2013.