In the period from February 24 to March 5, 2022, the pressure on the liquidity of subsidiary Russian banks increased, caused by the outflow of customer funds to other banks in the country and payments on their obligations.
"Russian subsidiary banks are taking the necessary measures to continuously provide banking services in a stable mode, including the timely execution of orders for payments and transfers of customer money. To do this, subsidiary Russian banks additionally use support from their parent structures in the form of providing monetary liquidity," -the agency said. The Agency, together with the National Bank, is taking additional measures to provide liquidity within the framework of monetary policy instruments.
"The negative impact of the imposed sanctions on Kazakhstani banks is not observed. Against the background of the volatility of exchange rates, Kazakhstani banks fully ensure the increased demand for foreign currency," the Agency for Regulation and Development of the Financial Market emphasized. The equity capital of the banking sector of Kazakhstan is 4.6 trillion tenges.
Second-tier banks have a significant stock of highly liquid assets, amounting to about 11.6 trillion tenges or 31.3 percent of assets. The agency emphasized that the high level of capital stock and highly liquid assets allow banks to absorb emerging shocks in the financial market. At the same time, the consequences of the imposition of sanctions and the volatility of the exchange rate affect the foreign exchange position and foreign exchange liquidity of Kazakhstani banks.
These risks are due to the population's increased demand for the purchase of foreign currency, including for conversion operations on deposits, which cause a violation of the balance of foreign currency assets and liabilities of banks. To mitigate the above risks and mitigate their impact on banks' compliance with prudential liquidity and foreign exchange position ratios (all critical values that a bank must perform to ensure its sustainable operations. - Author's note), the agency has adopted the following regulatory measures.
For the timely execution of customer orders for payments and money transfers until June 1, 2022, a special procedure for compliance with the following prudential standards is introduced:
1) liquidity ratios;
2) the ratio of placement in internal assets;
3) liquidity coverage ratio;
4) net stable funding ratio;
5) limits of the open currency position.
"In case of violation of these standards of the bank due to independent circumstances related to the outflow of customer funds and the revaluation of the value of assets and liabilities in connection with changes in the tenge exchange rate, the bank will be allowed to form the necessary amount of tenge and foreign currency liquidity to comply with the minimum prudential standards," the information says.
It is noted that until September 1, 2022, to maintain the ability of foreign parent banks to strengthen the liquidity of their subsidiaries in Kazakhstan at their own expense, when fulfilling the bank's capitalization ratio to obligations to non-residents of the country, the amounts of deposits and loans received from parent banks are excluded from the calculation of the obligations of subsidiary banks. Until January 1, 2023, the deadline for further tightening the net stable funding ratio (NSFR) calculation by including deposits of legal entities with the possibility of early withdrawal in the calculation of available stable funding has been postponed.
Used and translated by materials of tengrinews.