Proposal Introduced to Preserve Essential Living Funds for Debtors with Blocked Accounts in Kazakhstan

A proposal has been introduced in Kazakhstan to safeguard a minimum amount of living funds for borrowers whose bank accounts have been frozen. Lawmakers suggest that these protective provisions must be explicitly integrated into loan agreements with banks and microfinance organizations, as stated by Kurultai MP Almas Mukhametov.

Citing statistics from the Agency for Regulation and Development of the Financial Market, the lawmaker noted that non-performing loans overdue by more than 90 days have reached 1.8 trillion tenge. Furthermore, data from the Ministry of Justice reveals that over 1.5 million individuals currently have their bank accounts blocked under enforcement proceedings.

"Naturally, citizens must honor and repay their debts. However, considering that the majority of payments are now made digitally, how is a person expected to survive with a blocked account? How will they pay for transport, communications, water, electricity, and heating? How will they purchase food and essential medicines? A person deprived of access to their earnings loses the motivation to work, yet only a citizen with a stable income can settle their debts," stated Almas Mukhametov.

While current legislation mandates that at least 50% of a debtor's income and a minimum subsistence amount remain untouched, practical execution remains flawed, leaving citizens unable to access these funds once accounts are restricted.

To resolve this issue, the MP outlined several key measures:

• Make it mandatory in loan contracts to include a clause guaranteeing the retention of minimum funds necessary for basic survival;

• Explore mechanisms to automate this process directly through banking systems;

• Establish clear procedures for accessing and utilizing funds allocated for essential needs when account restrictions are imposed.