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Under the Law of the Republic of Kazakhstan “On State Regulation, Control and Supervision of the Financial Market and Financial Organisations”, one of the Agency’s key tasks is to ensure a high level of protection of the rights and interests of consumers of financial services, ensure transparency and accessibility of information about financial institutions and the services they provide, and promote financial literacy and financial inclusion among the population. |
Articles 36 of the Law on Banks and 9-2 of the Law on Microfinance Activities establish the conditions and procedures for debt settlement and the measures that a creditor may apply to an insolvent borrower.
Thus, the borrower has the right to apply to the creditor for loan restructuring within 30 calendar days from the date the overdue payment occurs, by submitting a written application or by another method specified in the loan agreement.
In the application, the borrower must specify the reasons for the delay, propose possible restructuring options, and provide supporting documents evidencing reduced income, difficult social circumstances, hardship, or inability to fulfill their credit obligations.
The creditor must consider the proposed changes to the terms of the bank loan or microcredit agreement within 15 calendar days from the day the borrower’s application is received and provide a written response indicating:
1) consent to the proposed changes;
2) the creditor’s counterproposals;
3) refusal to amend the terms with a reasoned explanation for such refusal.
Creditors, when considering supportive measures for borrowers experiencing difficulties in repaying loans or restructuring requests, make decisions in accordance with their internal policies on a case-by-case basis, applying an individual approach to each borrower.
A borrower who is an individual has the right, within 15 calendar days from the date of receiving the decision of the bank and/or microfinance organization (MFO) regarding the refusal to resolve or restructure the loan, as well as in case of failure to reach a mutually acceptable agreement on changing the terms of the bank loan or microcredit agreement, to appeal to the banking or microfinance ombudsman, simultaneously notifying their creditor.
The application must include proof of the written request to the bank/MFO and the creditor’s response indicating failure to reach a mutually acceptable agreement on the amendment of the loan or microcredit agreement terms.
During the period when the ombudsman is reviewing the application of an individual belonging to socially vulnerable groups under the Law of the Republic of Kazakhstan “On Housing Relations” for a mortgage housing loan (mortgage loan) not related to entrepreneurial activity, the creditor is prohibited from enforcing recovery on the pledged property by filing a lawsuit or by extrajudicial means.
According to Article 36 of the Law on Banks, banks, as a measure applied to insolvent borrowers, may enforce collection in a non-disputable (without consent) manner on funds available in any of the borrower’s bank accounts (if such enforcement is stipulated in the bank loan agreement), except for funds in accounts intended for crediting allowances and social payments, alimony for the maintenance of minor and incapacitated adult children, payments from citizens’ housing construction savings, funds intended for crediting compensation for investment expenses, and accumulative deposits under educational savings agreements.
Since January 1, 2017, enforcement of debt collection from an individual borrower’s bank loan by presenting a payment demand is limited to fifty percent of the amount of money in the borrower’s bank account and/or from each subsequent amount credited to the borrower’s bank account, and is carried out without waiting for the entire amount necessary for full payment of the demand to be credited to the account.
Since September 24, 2019, the amount remaining in an individual’s current account must not be less than the subsistence minimum established for the respective financial year by the law on the republican budget.