The maximum period of keeping assets collected by financial institutions on the balance sheet shall not exceed three years. Such a rule is stipulated in a new bill, which was approved today by the members of the upper house of the Kazakh Parliament. It is aimed at stimulating the accelerated integration of distressed assets in the economic circulation. The document also grants the right to sell distressed assets to private investors. This applies only to debts of legal entities and individual entrepreneurs. Services related to the management of such loans are provided by the newly established institution of service companies.
“Service companies manage assets in trust, develop their own collection strategy and provide other services to owners of distressed assets. High requirements for service companies, such as the amount of capital, market experience and impeccable business reputation will be established at the legislative level. The Agency keeps a register of service companies that meet the established requirements and places information about them on its Internet resource. This will provide an additional mechanism for protecting the rights of borrowers,” said Madina Abylkassymova, Chairperson, the Kazakh Agency for Regulation and Development of Financial Market.
At the beginning of the year, the volume of distressed assets amounted to 2.3 trillion tenge or 6 percent of the assets of the banking system. In total, over the past five years, such assets have been written off in the amount of 6.7 trillion tenge. During this time, the licenses of eight insolvent banks were revoked.
Translation by Assem Zhanmukhanova
Editing by Saule Mukhamejanova
