July 23 at a press conference following the Government session, First Deputy Prime Minister – Minister of Finance Alikhan Smailov spoke about the ongoing work on writing off penalties and fines for loans.

Smailov said that the total amount of penalties and fines as of July 1, 2019, according to the National Bank, is about 50 billion tenge, which is available to 5 million 46 thousand citizens who have unsecured consumer loans.

Only those penalties and fines that are on the balance sheet of banks and microfinance organizations will be charged.

“The Decree of the Head of State said that fines in banks and microfinance organizations will be written off. Under the legislation of the Republic of Kazakhstan “On Banks and Banking Activities,” financial organizations are provided with the right to assign their rights to claims to borrowers to collection organizations. Thus, if the bank transferred the rights of claim, then these rights of claim are not with the bank. Under the Decree, we write off only those penalties and fines that are on the balance sheet of the bank,” Smailov explained.

According to him, two situations may arise. The first is when the bank transfers the rights of a collection organization to collect the debt as part of the pre-trial settlement, but it does not assign the rights. Then these rights of claim remain in the bank. So, these penalties and fines will be written off. The second situation is when the rights are already sold by banks or microfinance organizations to collection organizations and are not bank assets. Accordingly, penalties and fines may not be written off.

As Smailov noted, banks have already actively started writing off penalties and fines. According to the results of this work, the Financial Support Fund will pay 30% of this written off amount to financial institutions. That is, banks assume 70% of the load on the write-off of fines and penalties.