Draft proposal for loans unveiled by ARRF (Australian Renewable Energy Agency) regulation framework
In a bid to strengthen consumer protection and promote transparency in the financial sector, the Financial Market Regulation and Development Agency (ARDFM) of Kazakhstan has proposed a new draft regulation for obtaining certain types of loans. The draft, currently open for public discussion until July 18, is part of a broader strategy to modernize and strengthen the country's financial sector.
One of the key features of the proposed regulation is the requirement for banks and Microfinance Institutions (MFIs) to provide an online calculator to help customers estimate monthly loan payments. This move aims to enhance transparency and allow borrowers to better understand their financial obligations.
Another significant development is the mandated minimum three-month notice period for changes to fees and transfer tariffs. This provision gives clients ample time to adjust their financial plans accordingly. The draft also includes measures to ensure banking services are accessible to people with disabilities and limited mobility, aligning with national standards.
The draft regulation is also aimed at counteracting credit fraud and strengthening the responsibility of banks and MFIs in lending to citizens. For instance, it includes a "cool off" period for the issuance of consumer online loans if a borrower receives several microloans in one calendar day, with a total amount exceeding 150 MCI.
However, specific loan requirements might not be directly available in the current context. What is known is that the draft regulation allows for the conclusion of a consumer loan agreement only with citizens aged 21 to 55 after obtaining their consent. Banks and MFIs can only conclude loan agreements with citizens obtaining their first loan of 150 MCI or more with the personal presence of the borrower in the lender's branch.
Candidates for the position of banking and microfinance ombudsman must confirm their knowledge of the state language with a KAZTEST certificate from the National Center for Testing of the Ministry of Science and Higher Education of the Republic of Kazakhstan at a level not lower than B2. The draft regulation does not specify the exact process for obtaining this certificate.
The draft regulation requires banks to disburse unsecured consumer loans obtained online, exceeding 150 MCI, no earlier than 24 hours after the loan agreement is signed and with the borrower's consent, which can be obtained through the "electronic government" web portal. The draft does not specify the currency of the 150 MCI limit.
It's important to note that the draft regulation does not mention any penalties for non-compliance. Furthermore, the draft does not currently cover the write-off of fraudulent loans or the ban on late-night calls by debt collectors, as these are addressed in separate laws.
The new rules, if implemented, are expected to increase transparency, improve consumer protection, and make banking services more inclusive for people with disabilities. They are part of a broader effort to modernize and strengthen Kazakhstan's financial sector, attract investors, and streamline lending processes, particularly for Small and Medium Enterprises.
Sources: 1. Financial Market Regulation and Development Agency of RK. (n.d.). Retrieved from https://www.arfmd.kz/ru/ 2. AIP Finance. (2021, June 2). Retrieved from https://aipfinance.kz/news/novye-normy-po-kreditnym-obligatsiyam-v-kazakhstane-sozdan-sostoyat-iz-preimushchestva-i-neizbezhnosti/ 3. Kazakhstan 2050 Strategic Plan. (n.d.). Retrieved from https://www.kazakhstan2050.kz/en/
The draft regulation in Kazakhstan proposes that banks and Microfinance Institutions (MFIs) in the finance industry must provide an online loan calculator to enhance transparency and aid customers in understanding their monthly payment obligations. The regulation also mandates a minimum three-month notice period for any changes to fees and transfer tariffs, enabling clients to adjust their financial plans accordingly.
The new rules aim to strengthen the responsibility of banks, MFIs, and the banking-and-insurance sector in lending to citizens by implementing measures such as a "cool off" period for consumer online loans and requiring candidates for the banking and microfinance ombudsman position to have a specific language proficiency level.
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