Deposits of individuals in Kazakhstan’s banks have reached 26.4 trillion tenge. The Kazakhstan Deposit Insurance Fund (KDIF) reminded the public about the banks participating in the national deposit insurance system, DKNews.kz reports.
The KDIF notes that 21 second-tier banks currently participate in the deposit protection system for individual savers. The full list of participating banks is available on the Fund’s official website. Experts from the KDIF explained which banks are part of the system and outlined the three key principles of participation.
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1 - Mandatory and “automatic” participation for all banks on equal terms
Under Kazakhstan’s law on mandatory deposit insurance, all individual depositors have the right to compensation from the KDIF if a bank’s license is revoked.
At the same time, the Law on Banks requires every second-tier bank licensed by the authorized body to accept deposits and open and maintain accounts for individuals to participate in the national deposit insurance system. The terms of participation and the accession agreement are the same for all banks.
Kazakhstan’s deposit insurance system has been in place for 25 years, and currently all operating banks in the country are members of the system. The only exception applies to Islamic banks. These rules are also preserved in the draft of the new Law on Banks.
Each bank independently defines its deposit policy, while the Fund’s role is to provide legal protection to depositors.
The term “deposit” includes:
- all types of deposits, including savings, term, non-term, conditional, and demand deposits,
- as well as funds in current accounts and on payment cards.
Deposits of individuals are protected in both tenge and foreign currency. The maximum insurance coverage per depositor in each participating bank is:
- up to 20 million tenge for savings deposits in tenge,
- up to 10 million tenge in total for other types of deposits (term, non-term, demand, etc.) and for accounts and cards in tenge,
- up to 5 million tenge for all deposits, cards, and accounts in foreign currency.
If a depositor holds several accounts within the same bank, the total insurance coverage cannot exceed 20 million tenge, with limits applied by type and currency. The KDIF guarantee also covers accrued interest.
According to current data, the insurance system fully covers 99.8% of all individual deposit accounts across Kazakhstani banks. Deposits exceeding the KDIF guarantee are also protected, but only within the maximum insured amounts.
Deposits of both residents and non-residents are guaranteed equally. However, the KDIF does not insure corporate accounts and deposits. Individual entrepreneurs, private notaries, court executors, lawyers, and professional mediators enjoy the same protection as individual depositors.
Maxim Zolotukhin/DKNews.kz
2 - Financial sustainability of the deposit protection system
The right of individuals to deposit protection in Kazakhstani banks is guaranteed by law, unconditional, and does not require any additional action or insurance payments from depositors.
Insurance coverage is already secured by the Fund’s special reserve. As of October 1, the accumulated reserve of the KDIF totals 1.4 trillion tenge. The system is financed through contributions from participating banks and does not rely on the state budget.
To maintain the value of the reserve and protect it from inflation, the KDIF invests its funds in low-risk assets.
In case of a shortfall, additional financing mechanisms are available, none of which involve taxpayer funds.
Thus, Kazakhstan’s deposit insurance system is financed entirely by the banking sector, in full compliance with international standards.
Experts from the KDIF previously shared details on the Fund’s investment principles.
3 - Ongoing development of the deposit protection system
Banks play an active role in the development of the deposit insurance system through the KDIF Advisory Council.
This collegial body prepares independent proposals and reviews initiatives developed by KDIF experts. All proposed amendments to the participation agreement, contribution procedures, remuneration rates, criteria for selecting agent banks, rules for compensating depositors, and quality control mechanisms are discussed with the Council before approval.
Currently, the Advisory Council includes representatives of nine banks, nearly half of all participants in the system, as well as the Association of Financiers of Kazakhstan, which serves as a permanent member.
