International Monetary FundWorld Bank2013-10-032013-10-032004-08https://hdl.handle.net/10986/16064The purpose of this note is to explore the reasons for a comparatively high interest rate spread in Kazakhstan in the context of competition in the banking sector. In spite of significant gains in efficiency made in recent years, operational costs and provisioning for loan losses remain high compared to some other economies. Profitability of the aggregate banking system has increased in the face of lower interest spreads. A highly concentrated banking system could be an indicator of lack of competition, but it needs to be assessed with contestability conditions (openness to entry of banks). The lack of license applications since 2001 raises questions about the attractiveness of entry by new banks. Competitive and market contestability conditions will be further enhanced with the authorities' continuation of strong macroeconomic and financial policies, improvements in financial sector regulation and enforcement thus continuing the achievements during the last five years. Administrative measures to control interest rates (for instance, the ceiling on deposit rates introduced by the Deposit Insurance Fund and tax incentives) only distort financial intermediation, and are likely to be counterproductive.en-USCC BY 3.0 IGOACCOUNTINGACCOUNTING FRAMEWORKBALANCE SHEETBANK ASSETSBANK BRANCHESBANK LENDINGBANK MARGINSBANK POLICYBANK PROFITABILITYBANK REGULATIONSBANK SECRECYBANKING INDUSTRYBANKING MARKETBANKING MARKETSBANKING SECTORBANKING SERVICESBANKING SYSTEMBANKING SYSTEMSBANKSBORROWINGBRANCH NETWORKSBROAD MONEYCAPITAL ACCOUNTCAPITAL ACCOUNT LIBERALIZATIONCAPITAL MARKETSCOMMERCIAL BANKSCONSUMER PROTECTIONCOST STRUCTURECOUNTRY COMPARISONSCREDIT BUREAUSCREDIT RISKCREDIT RISKSCREDITORCREDITOR RIGHTSDEBIT CARDSDEPOSITDEPOSIT INSURANCEDEPOSIT RATEDEPOSIT RATESDEPOSITORSDEPOSITSDOMESTIC BANKINGECONOMIC CRISISECONOMIC GROWTHENTRY REQUIREMENTSEXTRAORDINARY INCOMEFINANCIAL DEEPENINGFINANCIAL INFORMATIONFINANCIAL INTERMEDIATIONFINANCIAL MARKETSFINANCIAL POLICIESFINANCIAL SECTORFINANCIAL SYSTEMSFLEXIBLE EXCHANGE RATEFLEXIBLE EXCHANGE RATE REGIMEFOREIGN BANKFOREIGN BANK ENTRYFOREIGN BANKSFOREIGN CURRENCYFOREIGN ENTRYFOREIGN EXCHANGEGOVERNMENT SECURITIESHOUSINGINCOME GROUPSINFLATIONINFLATION RATEINFORMATION ON BORROWERSINTEREST EXPENSEINTEREST EXPENSESINTEREST INCOMEINTEREST INCOMESINTEREST RATEINTEREST RATE SPREADINTEREST RATE SPREADSINTEREST RATESINTERNATIONAL BANKINTERNATIONAL CAPITALINTERNATIONAL CAPITAL MARKETSINTERNATIONAL FINANCIAL STATISTICSINTERNATIONAL MARKETSINTERNATIONAL STANDARDSINVESTINGINVESTMENT DISPUTESJUDICIAL SYSTEMLACK OF COMPETITIONLAWSLEVEL OF INTEREST RATESLOANLOANABLE FUNDSLOSS STATEMENTSMACROECONOMIC STABILITYMACROECONOMIC UNCERTAINTYMARKET PARTICIPANTSMONETARY FUNDMONOPOLYMORTGAGEMORTGAGE COMPANYMORTGAGE CREDITMORTGAGE LENDINGMORTGAGE LOANSMORTGAGESMUTUAL FUNDMUTUAL FUND INDUSTRYNET INTEREST MARGINNEW ENTRANTSNONBANK FINANCIAL INSTITUTIONSOPERATING COSTSOPERATING EXPENSESOPERATING INCOMEOVERHEAD COSTSPOWER PARITYPRIVATE SECTOR CREDITPRIVATIZATIONPRODUCTIVITYPROFITABILITYPROPERTY RIGHTSPROPERTY RIGHTS ENFORCEMENTPROVISIONING RULESPRUDENTIAL REGULATIONSPURCHASING POWERREAL ESTATEREAL ESTATE INVESTMENTREGULATORY AUTHORITIESREGULATORY AUTHORITYREGULATORY CAPITALREGULATORY RESTRICTIONSRESERVERESERVE REQUIREMENTSRESERVESRESTRICTIONS ON ENTRYRETURNRETURN ON ASSETSROASAVINGSSAVINGS BANKSECRECY LAWSECURITIESSETTLEMENTSHARE OF ASSETSSHAREHOLDERSSTATEMENTSTOCK DATASUPERVISION OF BANKSSUPERVISORY AUTHORITIESTAXTAX INCENTIVESTIME DEPOSITTRADE SECTORSWORLD DEVELOPMENT INDICATORSWorld Bank10.1596/16064