BAKU, Azerbaijan, July 1. MPs of the Kazakh Parliament’s Senate [upper house] adopted the law "On amendments and additions to certain legislative acts of Kazakhstan on development of distressed assets market", Trend reports via Kazakh media.
The law envisages the expansion of the existing list of authorized buyers of problem loans by including private investors.
Private investors will be allowed to purchase only problem loans of legal entities and individuals.
Besides, the law envisages the creation of an institution of service companies which will provide services to private investors in managing non-performing loans.
The functions of service companies will be assigned to subsidiaries of banks which manage distressed assets, and collection agencies which already have acquired relevant experience and competence. The service companies will carry out trust management of assets, develop individual recovery strategies and provide other services to owners of distressed assets.
The law also provides an opportunity for private investors to independently manage large corporate loans in the amount of over 50 million tenge ($110,000). The loans for trust management will be transfered to service companies in case of purchasing small loans from legal entities with a debt of less than 50 million tenge, loans from individuals and non-residents.
In order to protect the rights and interests of borrowers, a private investor will be subject to all requirements and restrictions imposed by the legislation of Kazakhstan on the relationship between a lender and a borrower under bank loan and microcredit agreements. Thus, the rights of borrowers to private investors and service companies will be protected.
Along with the above, the law envisages the establishment of a three-year deadline for the presence of recovered property on the balance sheets of banks and microfinance organizations, that is, property which has become the property of the bank. This will stimulate banks and micro-financial organizations to rapidly involve distressed assets in economic circulation.