ASTANA – Starting in 2020, foreign banks will be allowed to open direct branches in Kazakhstan. Under the country’s commitments upon accession to the World Trade Organisation (WTO), they will no longer be required to register their branches as subsidiaries under the nation’s jurisdiction.
“We have made specific commitments in the field of financial services and we have to follow them in the five years after accession. These five years have not yet ended. We are now embarking on the fourth year of fulfilling our commitments to join the WTO. These five years will expire in 2020 and we will allow direct branches of foreign banks to open their offices and provide services in Kazakhstan,” said Kazakh Permanent Representative to WTO Zhanar Aitzhanova at the seventh roundtable meeting on accession.
The measure will lead to more competition in the financial sector and affect the quality and terms of service provided to businesses and the public, she added.
Kazakhstan became an official WTO member in November 2015. Membership provides an opportunity to stimulate export development, as it removes discriminatory treatment of Kazakh goods and opens free access to foreign markets.
The country has more than 30 banks and the market is changing after a decade of crisis. The modifications are due to the National Bank tightening regulations, new rules of international financial reporting standards, intensified competition in the market and the lack of qualified personnel.
The banks face numerous challenges, as access to quasi-public sector deposits is no longer simple and they have not yet adjusted to market conditions.