Majilis Member Questions Banking Sector Privileges and Oversight, Criticizes Former Prime Minister Mamin

Majilis Deputy Bakytzhan Bazarbek sharply criticized Kazakhstan’s banking sector, accusing second-tier banks of corruption, abuse of privilege, and evading state oversight.

Former Prime Minister Askar Mamin was also targeted in his remarks, Orda.kz reports.

According to the deputy, the country’s banking system has long operated under a “special status,” allowing institutions to violate laws under the cover of banking secrecy.

Banks were bailed out with budget funds. They were not prevented from transferring capital abroad. Healthy competition was limited. Access to banking information was restricted in the banks’ interests. Bank lobbying in the corridors of power became commonplace. Banks were given the opportunity to break laws and fend off regulatory pressure. Legal protection of banking secrecy is a green light from any audits,
 Bazarbek stated.

He cited the example of land plots held by banks in violation of existing laws.

Under current rules, if a bank fails to develop land within six months, it must revert to state ownership. However, Bazarbek said, this mechanism is ignored. To bypass the requirement, banks transfer such assets to the Problem Loans Fund, which later sells the land to private buyers.

And to prevent the state from seizing the land, banks are quietly dumping all this land into the Problem Loans Fund, which then sells it individually at auction. It’s a clever ploy to circumvent the prohibitions and restrictions in the Land Code. For example, Halyk Bank holds 2,153 land plots, totaling 2,589,887 hectares and worth 166 billion 884 million tenge, and is also mortgaged. The Problem Loans Fund holds 1,298 land plots, totaling 1,159,000 hectares and worth 53 billion 126 million tenge. Or consider the protocol signed by Askar Mamin in 2020 — the loss of 383 hectares of Almaty land, which was held in the Problem Loans Fund and intended for the construction of schools, hospitals, and nurseries, but was subsequently sold to developers,
 Bazarbek said.

He also reminded that banks have yet to repay billions of tenge allocated during past bailouts.

According to Bazarbek, the loans — issued a decade ago — are being repaid gradually: Nurbank was given until 2030 to repay 46 billion tenge, while Eurasian Bank received 150 billion to be repaid by 2032.

Alatau City Bank is getting absolutely fantastic, cushy terms — they’ve given them the opportunity to repay 950 billion in three stages. The first stage is 2034, the second is 2034–2035, and the third is 2040–2045. RBK was given 176 billion until 2032. Even offering preferential terms for debt repayment is already a sign of lobbying by the bank. Are they really going to pay off our debt with pennies?
 the deputy said.

The country is in crisis, there’s no money at all. There’s no need to stand on ceremony with these banks— you need to put money in these banks now, right now,
 he concluded.

Original Author: Ilya Astakhov