CA-NEWS (KZ) - The State Agency for Financial Supervision (FSA) proposes amending legislation to ban banks from giving loans to affiliates.

The respective provision is specified in the draft law "On amendments to some legislative acts on regulation of banking and financial markets."

"The bill provides for a complete ban on extending bank loans and bank guarantees to persons closely associated with the banks except for the legal persons, who are participants of the banking conglomerate," the head of the FSA Elena Bakhmutova told the government meeting on Thursday.

The participants of the banking conglomerate, will be eligible to receive a bank loan, if they have an adequate loan security, "which meets the size and type requirements established by the law and if these persons are proved solvent," she said.

According to the bill, this rule will be put into force on January 1, 2013.

In order to increase transparency of bank capital origin, the bill introduces mandatory declaration of income and property of individuals enjoying a status of a major bank shareholder.

"Investments in the capital of banks and other financial institutions in the form of gifts, gains, income from the sale of donated property should not exceed 25% of the shares purchased in the financial organization," said Bakhmutova.

According to the banking regulations of Kazakhstan persons closely associated with the bank are: officials and bank executives, as well as their spouses and close relatives; major shareholders, or executives of a major corporate shareholders, and their spouses and close relatives; an entity with respect to which the bank is a major participant, officials of the legal entity, their spouses and close relatives and affiliates of the bank.