Switch contrast
Accessible version Standard version

Understanding deposit insurance

KDIF insures all deposits of individuals

Deposit Insurance System in Kazakhstan

Deposit insurance system in Kazakhstan

Kazakhstan Deposit Insurance Fund was established with a view to building confidence in the Kazakhstani banking system as a framework of protection of bank deposits of general public. This issue became critical for the Republic of Kazakhstan after the financial crisis of 1998 burst in Russian Federation. Particularly, at the 1st Congress of financiers of Kazakhstan, President Nursultan Nazarbayev suggested that comprehensive set of system-wide measures was to be elaborated and implemented, one being establishment of collective deposit insurance system.

 

 

KDIF was established by the National Bank of the Republic of Kazakhstan Management Board Resolution No. 393 dated 15 November, 1999 “Regarding incorporation of ZAO “Kazakhstan Individuals Deposit Guarantee (Insurance) Fund”. Later on, based on the resolution of the Sole Shareholder, 24 September, 2010, the organization was re-registered as Joint Stock Company “Kazakhstan Deposit Insurance Fund”.

KDIF is a non-profit organization. National (Central) Bank of the Republic of Kazakhstan is the founding institution and the sole shareholder of KDIF.

The basic objective of deposit insurance system is to maintain stability of financial system, including via maintaining public confidence in Kazakhstani banking sector via establishing the framework to reimburse bank depositors in the event of a DIS member bank failure.

The key principles of deposit insurance system

  • Compulsory basis of membership for any bank licensed by the National (Central) Bank of the Republic of Kazakhstan to accept deposits from general public, open and operate current and savings bank accounts
  • Transparency of deposit insurance system
  • Mitigation of risks associated with operation of deposit insurance system
  • Accumulation of special reserve for payouts on ex-ante basis

The strategic objectives of the deposit insurance organization

  • To engage in maintaining stability of financial system
  • To protect the rights and lawful interests of insured depositors of the deposit insurance system’s member banks

KDIF is expected to support the National (Central) Bank of the Republic of Kazakhstan and address diverse issues with regard to maintaining public confidence in deposit insurance system immediately

The key functions

  • Reimbursement of bank depositors in the event of a DIS member bank failure
  • Keeping record of the deposit insurance system member banks
  • Investment management
  • Accumulation of special reserve for payouts on ex-ante basis
  • Assigning the agent bank for processing payouts selected on competitive basis
  • Participation in the failed bank’s temporary administration both during a member bank conservatorship and period of withdrawal of a member bank’s banking license
  • Participation in liquidation commission and creditor committee of a member bank under forced liquidation up to the moment of settlement of the KDIF’s claim in the amount paid to the insured depositors

Strategic objectives

  • To fulfill the Financial Sector Development Concept 2030 via advancement of legislation governing deposit insurance, including assigning KDIF with the mandate and powers during bank liquidation and insolvency resolution
  • To ensure capacity to exercise its critical functions, i.e. to reimburse depositors in a timely and orderly manner in the event of a member bank failure
  • To further develop the provisions for replenishment of the special reserve for payouts, and strengthening financial positions of KDIF
  • To envisage implementation of the integrated protection scheme aimed at extending coverage to financial product consumers in certain insurance types
  • To extend the deposit insurance coverage to certain types of legal entities (i.e. socially relevant SMEs)
  • To strengthen risk assessment practices and controls over the KDIF’s operations
  • To take intensified effort in maintaining public awareness of deposit insurance and improving general public understanding of the deposit insurance provisions
Our specialists will contact you shortly
We have received your inquiry. Thank you!
Our specialist will contact you shortly!