Kazakh central bank discusses irrevocable deposits

ALMATY. KAZINFORM The National Bank of Kazakhstan and the second-tier banks are discussing the issue of the optimal model for introducing irrevocable deposits for the depositors, ready to place new funds in a bank provided that they will not withdraw them ahead of time. Daniyar Akishev, the central bank head, told this in a briefing for journalists in Almaty, Kazinform reports.

The introduction of new regulations for deposits will not allow the depositors to withdraw their savings before the deposit period expiry.

Any deposit is a deposit withdrawable on demand. According to the Civil Code of Kazakhstan, any bank is obliged to return the deposit to the depositor within 3 days. This rule makes the relations between the bank and the depositor quite unstable. In this regard, it is necessary to change certain legislation norms. It is a depositor who should decide which deposit to choose. However, the introduction of irrevocable deposits will not affect the existing deposits. Irrevocable deposits should have higher guarantee amounts and rates. We are discussing all these issues and preparing the framework to implement this project," Mr. Akishev said.

He noted that, according to the world practice, the main advantages of irrevocable deposits imply that long-term depositors have the opportunity to accumulate money at the most attractive return rate with additional protection mechanisms. In addition, while the banks have this tool, it will help to create a more stable funding base, reduce liquidity risk and enable long term lending.