Why Do Certain Banks Receive Financial Assistance from State?

The Agency for Regulation and Development of the Financial Market (ARDFM) explained why certain banks are allocated significant funds and aided with bonds, reports Orda.kz .

The government is investing billions of tenge to improve the banking system. ATF and Jusan Bank have received a significant part of the funds. Olzhas Kizatov, Deputy Chairman of the ARDFM, was asked if this did not affect the competitive environment and when they would stop providing assistance at the expense of taxpayers.

I do not agree that our banks are not competitive with foreign banks without state support. Now, thanks to these measures, the banking sector is stable, which is confirmed by international experts. According to the law, we have the opportunity to provide support for systemically important large banks. Therefore, the National Bank, the ARDFM, and the government act within the framework of legislative norms, Kizatov said. 

According to him, STB funds are allocated on a repayment basis. 

Jusan has quite high financial indicators. And we expect that this applies to all six banks that have state support funds on their balance sheets, they are all stable now. All have been given funds on a repayment basis. Based on the current stable situation, we expect that the money will be returned before the specified time, Kizatov continued. 

He also stressed that Kazakhstanis have begun to trust Kazakhstan's banking system more. The country is seeing an increase in deposits not only among legal entities, but also individuals.

If two or three years ago deposits were opened in foreign currency, now there is an increase in deposits of the population in banks in the national currency, said the deputy head of the agency.

Original Author: Karim Malibekov

DISCLAIMER: This is a translated piece. The text has been modified, the content is the same. Please refer to the original piece in Russian for accuracy.