The Agency of the Republic of Kazakhstan for Regulation and Development of the Financial Market
What does the maximum annual effective interest rate (AEIR) mean?
Annual Effective Interest Rate (AEIR) is the rate of remuneration that takes into account all client expenses related to the issuance and servicing of the loan. AEIR includes remuneration, all types of fees, and other payments charged in connection with the issuance and servicing of the loan, calculated in accordance with the procedure established by the legislation of the Republic of Kazakhstan. The bank is obliged to provide information on the AEIR before signing the contract — for this purpose, a title page is issued showing all the terms of the contract.
In accordance with the Resolution of the Board of the National Bank of the Republic of Kazakhstan dated March 26, 2012 No. 137 "On Approval of the Rules for Calculating Remuneration Rates in a Reliable, Annual, Effective, Comparable Calculation (Real Cost) for Loans and Deposits"; Resolution of the Board of the National Bank dated December 24, 2012 No. 377 "On Approval of the Maximum AEIR"; Joint Resolution of the Board of the Agency dated August 16, 2024 No. 62 and Resolution of the Board of the National Bank dated August 19, 2024 No. 45 "On Determining the Maximum AEIR":
Unsecured bank loans: the maximum AEIR is 46%.
Secured bank loans: the maximum AEIR is 35%.
Mortgage housing loans: the maximum AEIR is reduced to 20%.
For microloans up to 20,000 MCI (Monthly Calculation Index), the AEIR cannot exceed 46% per annum.
For microloans up to 50 MCI for a period of up to 45 days, other rules apply: from August 20, 2024, the AEIR is established at less than 0.3% per day, but not more than 179%.
What mistakes do borrowers most commonly make when taking out a mortgage?
The most common mistakes include underestimating one’s financial capabilities, focusing solely on the amount of the monthly payment without considering the total cost of the loan and the overall amount of interest paid, and overlooking additional expenses associated with purchasi...
What additional expenses, apart from the monthly payment, should be taken into account when purchasing a home with a mortgage?
When purchasing a home with a mortgage, it is important to consider not only the monthly loan payment but also additional expenses associated with acquiring and maintaining the property. These may include property appraisal costs, insurance, notarial and registration fees, taxes,...
Can a borrower lose their home due to a prolonged mortgage delinquency? What is the foreclosure procedure?
In the event of a prolonged failure to fulfill obligations under a mortgage loan, the legislation provides for the possibility of foreclosure on the mortgaged property. However, before such measures are taken, borrowers are provided with a number of tools to settle their debt. In...
What are the “gray” and “black” lists of droppers?
To combat dropper schemes, a centralized system for recording suspicious clients has been established. The system is operated by the Anti-Fraud Center of the National Bank, which receives information from banks, payment organizations, telecommunications operators, and law enforce...
What new requirements have been introduced for the remote issuance and reissuance of bank cards?
For the remote issuance and reissuance of bank cards, financial institutions are required to use two-factor authentication, including biometric identification. Bank cards may only be linked to Kazakhstan-registered mobile phone numbers, which reduces the risk of using foreign SIM...
What is “dropping” and what penalties are provided by law?
“Dropping” refers to the illegal provision, transfer, or use of access to a bank account, payment instrument, or identification tool, as well as the execution of unauthorized payments or money transfers, including on behalf of third parties, in exchange for financial compensation...
How has the regulator strengthened its oversight of collection agencies in recent years?
Since 2017, the Agency has pursued a regulatory policy aimed at strengthening oversight of collection activities, improving the functioning of the debt collection market, and reducing unfair collection practices. Since 2017, the following regulatory measures have been introduced:...
Does a debtor have the right to record a conversation with a collector?
Yes. Under subparagraph 7) of paragraph 1 of Article 16 of the Law on Collection Activities, a debtor and/or their representative has the right to independently record interactions with employees of a collection agency using audio and/or video recording equipment.
