On housing construction savings in the Republic of Kazakhstan

The Law of the Republic of Kazakhstan dated 7 December, 2000 No. 110

Unofficial translation

      Chapter 1. General provisions

Article 1. Relations, regulated by this Law

      This Law establishes the legal basis and regulates relations between the subjects of the system of housing construction savings, related to its operation, as well as the conditions, content and the forms of its state stimulation.

Article 2. Basic definitions used in this Law

      The following basic definitions are used in this Law:
      1) a preliminary housing loan – a target loan, provided by housing savings bank to the depositor within the contracted amount in order to improve housing conditions, without the condition of principal redemption before receiving the contracted amount, the balance of which is repaid through the contracted amount in accordance with this Law, the internal credit policy of the bank and the contract terms of the bank loan;
      2) an intermediate housing loan – a target loan, provided by housing savings bank to the depositor in order to improve housing conditions, provided the accumulation of minimum required amount of the money accumulated, the balance of which is repaid through the contracted amount under the contract of housing construction savings in accordance with this Law, the internal credit policy of the bank and the contract terms of the bank loan;
      3) an evaluation index – a calculated value, determined by the housing construction savings bank for each contract for the formation of priority of payment of the contractual amounts;
      4) the amount of accumulated money – money, actually saved by the depositor, consisting of his (her) contributions, and compensations accrued on these by the housing construction savings bank and the state bonuses; state awards;
      5) the minimum required amount of the accumulated money – money, defined in the contract on housing construction savings to obtain home loan;
      6) accrual period - the period during which the depositor makes ??the accumulation of housing construction savings;
      7) the remuneration rate on the loan - the interest rate, paid by the depositor under the contracts on housing construction savings and the bank loan, for the provision of a loan by housing construction savings bank as a percentage to the principal amount at the rate of the annual amount of money owed by housing construction savings bank;
      8) commission fee - the money, paid by depositor to the housing construction savings bank for the services of conclusion of contracts on the housing construction savings;
      9) state bonus – the money, allocated annually from the republican budget and accrued to the accumulated amount of deposit for the year and the remuneration of the housing construction savings bank;
      10) the remuneration rate on the deposit – the interest rate, charged by the housing construction savings bank under the contract on housing construction savings for the actually accumulated balance of the deposit for the year in accordance with the internal regulations of the housing construction savings bank;
      11) tariff program - an internal document of the housing construction savings bank that determines the remuneration rate on the deposit and other terms of savings and credit, as well as the amount of commission fees of the bank;
      12) housing loan - a target loan, provided to the depositor in order to improve housing conditions, in accordance with this Law and the terms of contracts on housing construction savings, and on the provision of a bank loan;
      13) housing construction savings - the money, accumulated by depositors in the housing construction savings banks to receive housing loan with accrued remuneration rate on the deposit and the state bonus to undertake measures to improve housing conditions;
      14) housing construction savings system - a closed system of funding the measures to improve housing conditions, based on attracting depositors’ money in housing construction savings, the accrued state bonuses on them and providing them with housing loans in accordance with this Law and the terms of the contract on housing construction savings;
      15) a contract on housing construction savings - a contract between the depositor and the housing construction savings bank and (or) between the depositor, the housing construction savings bank and the third parties, including concluded through agent(s) of the bank in accordance with this Law and the internal documents of the housing construction savings bank;
      16) contribution (deposit) in the housing construction savings – the money, deposited by a depositor or third parties on account of the depositor, opened in the housing construction savings bank in accordance with the terms of the contract on housing construction savings;
      17) a depositor of housing construction savings (depositor) - an individual, that entered into a contract on housing construction savings with the housing construction savings bank;
      18) remuneration of the housing construction savings bank – the money, accruing by the housing construction savings bank in accordance with the remuneration rate of the deposit;
      19) contracted amount - the amount of money, required for the depositor for the activities of improvement of the housing conditions, consisting of housing construction savings and housing loan.
      Footnote. Article 2 is in the wording of the Law of the Republic of Kazakhstan dated 14.04.2005 No. 43; as amended by the Laws of the Republic of Kazakhstan dated 02.07.2007 No. 272 (the order of enforcement see Art. 2); dated 05.07.2012 No. 27-V (shall be enforced upon expiry of ten calendar days after its first official publication).

Article 3. System of housing construction savings

      1. Subjects of the housing construction savings system shall be saving banks, depositors of these banks and the state that provides the payment of state bonuses from the republican budget.
      2. Housing construction savings shall be made ??and accumulated only in housing construction savings banks in national currency of the Republic of Kazakhstan.
      3. Depositor is entitled to have multiple accounts on deposit in the housing construction savings in each housing construction savings bank. Thus, the state bonuses by a depositor’s choice will be credited only one account in one housing savings bank.
      3-1. The minimum size of the contracted amount shall not be less than five hundred monthly calculation indices, established by the law on the republican budget for the relevant financial year.
      4. The minimum required amount of the accumulated money must be at least fifty percent of the contracted amount.
      5. The size of remuneration rate on deposits and the remuneration rates on the loan shall be established at the time of conclusion of the contract on housing construction savings and shall remain constant throughout the validity of the contract.
      When a depositor on his (her) own initiative goes from one tariff program to another, the size of remuneration rate on the deposit can be changed under the conditions, defined by the housing construction savings bank during the validity period of the contract on housing construction savings.
      The size of remuneration rate on housing loans may not exceed the size of the remuneration rate on deposits in housing construction savings by more than three percent per annum.
      6. State bonuses and remuneration of the housing construction savings bank are directed at increasing the principal amount of the deposit in accordance with this Law.
      7. State bonuses, received on the account of the housing construction savings bank are credited to the accounts of depositors - citizens of the Republic of Kazakhstan.
      8. Housing, intermediate housing and preliminary housing loans may be used by depositor only to undertake measures to improve the housing conditions in the territory of the Republic of Kazakhstan, which are defined as:
      1) construction (including land acquisition), purchase of home, including through its exchange in order to improve;
      2) repair and modernization of the home (including the acquisition of building materials, payment of contract works);
      3) repayment of obligations that appeared in connection with measures to improve housing conditions;
      4) making an initial payment for residential mortgage loan from banks and organizations, engaged in certain types of banking operations.
      9. Depositor has the right to early termination of the contract on housing construction savings and to receive a deposit, with the remuneration of the housing construction savings bank credited on it. In this case the depositor has the right to receive a state bonus at the accumulation of the deposit for more than three years under the conditions stipulated in the contract on housing construction savings.
      Footnote. Article 3 is in the wording of the Law of the Republic of Kazakhstan dated 14.04.2005 No. 43; as amended by the Law of the Republic of Kazakhstan dated 02.07.2007 No. 272 (the order of enforcement see Art. 2); dated 05.07.2012 No. 27-V (shall be enforced upon expiry of ten calendar days after its first official publication).

Chapter 2. Legal regulation of the functioning of the system of housing construction savings

Article 4. Legal status of the housing construction savings bank

      1. Housing construction savings bank - a bank, having a license from the National Bank of the Republic of Kazakhstan on implementation of the activities, referred to in Article 5 of this Law.
      Housing construction savings bank is obliged to participate in the system of compulsory deposit insurance in accordance with the legislation of the Republic of Kazakhstan.
      2. A legal entity that has no official status of the housing construction savings bank cannot be named as “Housing construction savings bank” and (or) implement the activities, specified in paragraph 1 of Article 5 of this Law.
      3. Procedure for establishment, operation and termination of housing construction savings banks is governed by the legislation of the Republic of Kazakhstan.
      Footnote. Article 4 as amended by the Laws of the Republic of Kazakhstan dated 10.07.2003 No. 483 (shall be enforced from 01.01.2004); dated 14.04.2005 No. 43; dated 02.07.2007 No. 272 (the order of enforcement see Art. 2); dated 05.07.2012 No. 30-V (shall be enforced upon expiry of ten calendar days after its first official publication).

Article 5. Types of activity of the housing construction savings banks

      1. The main activities of the housing construction savings banks in accordance with the license of the National Bank of the Republic of Kazakhstan shall be:
      1) accepting deposits (deposits) in the housing construction savings, opening and maintaining accounts of depositors;
      2) providing to depositors of housing, intermediate housing and preliminary housing loans to implement the measures to improve housing conditions.
      2. Housing construction savings banks may, apart from the main activity listed in paragraph 1 of this Article, exercise the participation in the authorized capital of legal entities that are part of the infrastructure of financial market and (or) offering automation of housing construction savings bank in the manner, prescribed by the banking legislation Republic of Kazakhstan, as well as other kinds of operations in accordance with the license of the National Bank of the Republic of Kazakhstan, which include:
      1) cash transactions - receiving and cashing in the implementation of one of the banking operations, referred to in paragraph 1 and subparagraphs 2), 6) of paragraph 2 of this Article, including their change, exchange, counting, sorting, packing and storage;
      2) transfer operations - responding to the requests of individuals and legal entities on payments and money transfers;
      3) (is excluded – dated 2 July, 2007 No. 272 (the order of enforcement see Art. 2);
      4) issue of its own securities (except for shares);
      5) safe operations - storage of securities, issued in the form of documents, documents and valuables of clients, including leasing of safe boxes, cabinets and premises;
      6) organization of exchange of foreign currency transactions;
      7) opening and maintaining the bank accounts of legal entities.
      Also, housing construction savings banks may carry out dealer activity in accordance with the banking legislation of the Republic of Kazakhstan.
      3. Housing construction savings banks have the right to engage in activities under the banking legislation of the Republic of Kazakhstan for the second-tier banks that do not require a license.
      Footnote. Article 5 is in the wording of the Law of the Republic of Kazakhstan dated 14.04.2005 No. 43; as amended by the Laws of the Republic of Kazakhstan dated 02.07.2007 No. 272 (the order of enforcement see Art. 2); dated 05.07.2012 No. 27-V (shall be enforced upon expiry of ten calendar days after its first official publication); dated 05.07.2012 No. 30-V (shall be enforced upon expiry of ten calendar days after its first official publication).

Article 6. Requirements for the content of the contract on housing construction savings

      Contract on housing construction savings shall contain:
      1) the subject of the contract;
      2) the contracted amount;
      3) the minimum required size of the accumulated money;
      4) the size of the remuneration rate on the deposit and the remuneration rate on the loan;
      5) the amount of the commission fee;
      6) the rights and obligations of the parties;
      7) the terms of fulfillment of obligations by the parties;;
      8) the conditions for granting housing loans;
      9) the conditions for changes and procedure for termination of the contract;
      10) the responsibility of the parties;
      11) other conditions in accordance with the legislative acts of the Republic of Kazakhstan.
      Footnote. Article 6 – is in the wording of the Law of the Republic of Kazakhstan dated 14 April, 2005 No. 43.

Article 7. Use and investment of funds

      1. The housing construction savings bank has the right to borrow funds in the financial market in order to ensure the fulfillment of obligations to depositors by issuing them the contracted amount or the amount of accumulated money.
      Own and borrowed funds shall be used by the housing construction savings banks for the implementation of activities under this Law.
      Housing construction savings cannot be used to provide preliminary housing loans.
      2. Placement of free money by housing construction savings banks is carried out in accordance with the banking legislation of the Republic of Kazakhstan.
      Footnote. Article 7 is in the wording of the Law of the Republic of Kazakhstan dated 14.04.2005 No. 43; as amended by the Laws of the Republic of Kazakhstan dated 02.07.2007 No. 272 (the order of enforcement see Art. 2); dated 05.07.2012 No. 27-V (shall be enforced upon expiry of ten calendar days after its first official publication).

Article 8. Distribution of money

      1. Money, attracted by housing savings banks shall be primarily directed to the payment of the contracted amounts under the distribution of money by housing savings banks among depositors on the basis of the concluded contracts on housing construction savings.
      2. Payment of the contracted amount to depositor shall be made no earlier than three years after the entry into force of the contract on housing construction savings, in the case of:
      1) compliance of the amount of accumulated money with the obligations undertaken by the contract on housing construction savings;
      2) (is excluded – dated 2 July, 2007 No. 272 (the order of enforcement see Art. 2);
      3) achievement of the minimum value ??of estimated figure in the order, counted by the housing construction savings bank. In calculating the estimated figure the duration and observance of conditions for accumulation of housing construction savings shall be taken into account;
      4) providing by the depositor the necessary security of the housing loan;
      5) proof of funds of the borrower to repay the housing loan.
      3. Procedure for determining the evaluation index is determined by the National Bank of the Republic of Kazakhstan and by the central authorized body for the execution of the budget.
      4. Upon expiry of the period for accumulation and in the case of non-accumulation by the depositor the minimum required amount of the accumulated money, he (she) is entitled to receive the contribution, the remuneration, accrued on it by the housing construction savings bank, as well as the state bonus at the accumulation of contribution for more than three years, or to the continuation of accumulation in the housing construction savings bank with the charge of state bonus.
      The state bonus is accrued prior to filing an application for a housing loan.
      5. Housing construction savings banks are entitled to grant depositors the interim housing and preliminary housing loans under the conditions, specified in the loan agreement.
      6. Long-term budgetary loans at a reduced remuneration rate can be used to provide intermediate housing and preliminary housing loans.
      Intermediate housing and preliminary housing loans are granted to depositors as part of the implementation of documents of the State planning system of the Republic of Kazakhstan at the expense of long-term budgetary credits or long-term budgetary credits and funds of the housing construction savings bank.
      Remuneration rate on intermediate housing and preliminary housing loans, granted to depositors as part of the implementation of documents of the State planning system of the Republic of Kazakhstan at the expense of long-term budgetary credits or long-term budgetary credits and funds of the housing construction savings bank, shall be established in accordance with the loan agreement.
      Footnote. Article 8 is in the wording of the Law of the Republic of Kazakhstan dated 14.04.2005 No. 43; as amended by the Laws of the Republic of Kazakhstan dated 02.07.2007 No. 272 (the order of enforcement see Art. 2); dated 18.02.2011 No. 408-IV (shall be enforced upon expiry of ten calendar days after its first official publication); dated 22.07.2011 No. 478-IV (shall be enforced upon expiry of ten calendar days after its first official publication); dated 05.07.2012 No. 27-V (shall be enforced upon expiry of ten calendar days after its first official publication); dated 05.07.2012 No. 30-V (shall be enforced upon expiry of ten calendar days after its first official publication); dated 03.07.2013 No. 124-V (shall be enforced upon expiry of ten calendar days after its first official publication).

Article 9. Security of housing, intermediate housing and preliminary housing loans

      1. Housing, intermediate housing and preliminary housing loans is secured by a pledge of real property, including the purchased house, or other means to secure the obligations, defined by the housing construction savings bank in accordance with the legislation of the Republic of Kazakhstan and the internal credit policy of the housing construction savings bank.
      2. If the minimum required amount of the accumulated money is less than fifty percent of the contracted amount, the security for the housing loan may be only the real estate or contribution (deposit) in the bank.
      Footnote. Article 9 – is in the wording of the Law of the Republic of Kazakhstan dated 14 April, 2005 No. 43; Article, as amended by the Law of the Republic of Kazakhstan dated 2 July, 2007 No. 272 (the order of enforcement see Art. 2).

Chapter 3. State support for the system of housing construction savings

Article 10. Conditions of payment of state bonuses on deposits in housing construction savings

      1. The state ensures the payment of state bonuses to depositors- citizens of the Republic of Kazakhstan.
      2. Deposits of citizens of the Republic of Kazakhstan under the age of eighteen years, or made ??in their name by others are also encouraged to the state bonus.
      3. The amount of annual state bonus for deposits in housing construction savings is twenty percent of the amount of the encouraged deposit. The deposit, encouraged by the state bonus includes the amount of the deposit in housing construction savings and the remuneration on it, charged by the housing construction savings bank.
      4. State bonus is charged annually on results of the year on the balance of the deposit in housing construction savings, taking into account the remuneration, charged by the housing construction savings bank as of January 1 of the year, following the reporting year.
      State bonus is charged to the account of the depositor before 1 March of the year, following the reporting year.
      State bonus shall not be charged on the deposit amount in the current year to those that encouraged in previous years.
      The amount of accumulated money, encouraged by the state bonus may not exceed two hundred monthly calculation indices.
      If the amount of accumulated money, encouraged by the state bonus exceeds two hundred monthly calculation indices, the remainder of the accumulated money that is not encouraged shall be taken into account when charging state bonus in the following year.
      5. Money, needed to pay state bonuses, is provided annually in the republican budget for the relevant financial year.
      6. Rules of calculation and payment of state bonuses on deposits in housing construction savings are approved by the central authorized body for the execution of the budget.
      Footnote. Article 10 is in the wording of the Law of the Republic of Kazakhstan dated 14.04.2005 No. 43; as amended by the Law of the Republic of Kazakhstan dated 05.07.2012 No. 27-V (shall be enforced upon expiry of ten calendar days after its first official publication).

Article 11. Restrictions on payment of state bonuses on deposits in housing construction savings

      1. State bonus shall be returned to the budget in the following cases:
      1) (is excluded – dated 2 July, 2007 No. 272 (the order of enforcement see Art. 2);
      2) misuse of housing loans by the depositor;
      2-1) repayment of the loan within fourteen calendar days from the date of granting the loan with the accumulation of money less than three years;
      3) making by the housing construction savings bank payments of state bonuses to the depositor in violation of this Law, and (or) the contract on housing construction savings. At the same time, the amount (part of the sum) of state bonus, paid by the housing construction savings bank with violations, shall be refundable;
      4) early termination by the parties the contract on housing construction savings at term of accumulation of deposits in the housing construction savings bank less than three years;
      5) the assignment of rights under the contract on housing construction savings to the person that is not a citizen of the Republic of Kazakhstan;
      6) detection by the central authorized body for budget execution the payment of state bonuses to one depositor in two or more accounts for deposits in housing construction savings in several housing construction savings banks. In this, state bonuses accrued in previous years must be returned to the budget, excluding bonuses, accrued to one of the deposits in the housing construction savings by choice of the depositor.
      2. State bonus shall not be refundable in the budget in the following cases:
      1) the assignment by depositor of rights under the contract on housing construction savings or a pledge to obtain housing construction savings and (or) a housing loan, intermediate housing and preliminary housing loans to another person, that is a citizen of the Republic of Kazakhstan, with the written permission of the housing construction savings bank;
      2) death or total disability of the depositor;
      3) when the depositor after conclusion of the contract on housing construction savings, registered as unemployed in accordance with the legislation of the Republic of Kazakhstan, and at the time of payment of state bonus remains so for six consecutive months;
      4) in the cases, provided in paragraph 3 of Article 12 of this Law.
      Footnote. Article 11 is in the wording of the Law of theRepublic of Kazakhstan dated 14.04.2005 No. 43; as amended by the Laws of the Republic of Kazakhstan dated 02.07.2007 No. 272 (the order of enforcement see Art. 2); dated 05.07.2012 No. 27-V (shall be enforced upon expiry of ten calendar days after its first official publication).

Article 12. Rights of depositors to receive sums of the money accumulated

      1. In the case of non-granting by the housing construction savings bank a housing loan when the depositor performs the requirements of paragraph 2 of Article 8 of this Law, and provided that the rights under the contract on housing construction savings were not transferred or pledged in favor of other persons, the bank shall be liable in accordance with the laws Republic of Kazakhstan and shall within the period stipulated by the terms of the contract on housing construction savings, indisputably by the first demand of the depositor pay him (her) a sum of the money accumulated.
      2. (Is excluded – No. 43 dated 14.04.2005).
      3. In case of failure of the depositor of housing construction savings from getting housing loan regardless of the performance by him (her) the requirements of paragraph 2 of Article 8 of this Law and the early termination of the contract on housing construction savings, he (she) shall be entitled to receive state bonus after three years of saving money.
      In the case of repayment of housing loan by the borrower within fourteen calendar days from the date of granting the loan, he (she) shall be entitled to receive state bonus after three years of saving money.
      Footnote. Article 12, as amended by the Laws of the Republic of Kazakhstan dated 14.04.2005 No. 43; dated 02.07.2007 No. 272 (the order of enforcement see Art. 2); dated 05.07.2012 No. 27-V (shall be enforced upon expiry of ten calendar days after its first official publication).

Article 13. Enactment of this Law

      This Law enters into force from the date of publication.

      The President
      of the Republic of Kazakhstan