Kazakhstan’s market economy development started in the early 90's after the collapse of the Soviet Union. The inflation rate in 1992 was amounted to 250%. In July 1993 Russia introduced its own currency notifying Kazakhstan three days before the event. Soviet banknotes of old samples surged within the country. President Nursultan Nazarbayev addressed the people the day before the currency reform and explained the situation. On November 15th, 1993 the country abolished the Soviet Ruble and introduced its own currency - the Tenge. Soviet currency exchange for tenge began at 8 am on the same day and ended at 8 pm on November 20th, 1993. Kazakhstan managed to build an effective banking system from literally nothing, although the country traditionally had never had any experience in the banking sector. November 15th, 1993 is marked as a Financier’s Day or the birthday of the tenge.
A banknote factory was set up so that the country was able to produce its own paper money. It is notable that now Kazakhstan’s Mint is among the top six mints of the world. Tenge, as the national currency, has played an important role in the country’s formation. The introduction of its own currency has allowed the country to conduct an independent monetary policy. It also accelerated the implementation of important reforms aimed at building the market economy.
First batch of tenge was made in Britain, as well as contract banknote production was signed with a major British company. Preparations for the release of the first Kazakhstani coins took place simultaneously. Later in order to ensure that the country can provide itself with paper money, a banknote factory was built in Almaty.
Every country tries to make its banknotes distinct from other currencies. Countries strive to emphasize their individuality and uniqueness. Kazakh banknotes are designed to describe the history of the country and the changes of recent years. For example, a 5 thousand bill has an image of Altyn Adam’s hand (The Golden Man), the foothills of Alatau, as well as a symbol of well-known hotel in Almaty named "Kazakhstan". Kazakh national ornaments were used for the security features of the bills.
The financial system of the Republic of Kazakhstan is recognized as one of the most prestigious among CIS countries. It is recognized by the world's leading rating agencies and organizations such as the IMF, World Bank, European Bank for Reconstruction and Development. The financial system of Kazakhstan meets the basic international standards.
Kazakhstan‘s financial system is built from scratch. Currently it is an efficient banking system despite the fact that the country has not had any previous banking background. The sector is developing dynamically. The country has a two-tier banking system. National Bank is the central bank of the country; all other banks represent the second level of the banking system, with the exception of the Development Bank of Kazakhstan.
By May 1, 2012 the banking sector of the Republic of Kazakhstan was already represented by 38 banks of the second level. Collectively they cover more than 40% of the market. First-tier banks comprise the same percentage through their subsidiaries and affiliates controlled by pension, insurance and leasing markets.
According to official data of May 1, 2012, 36 insurance (reinsurance) organizations were registered in accordance with the licenses issued by the financial market of Kazakhstan. 7 organizations hold licenses for life insurance, 24 organizations hold licenses for mandatory insurance of vehicles. 13 other insurance brokers and 82 actuaries operate in the current insurance market.
According to official data of May 1, 2012 the country has 11 pension funds with 120 branches and 33 representative offices in the regions. In early 2013, the president Nursultan Nazarbayev instructed to create a single unified pension fund. This will ensure effective and secure management of savings of Kazakhstan citizens.
Kazakhstan was the first among CIS country’s which created the National Welfare Fund in order to ensure steady social and economic development of the country despite unfavorable external factors. As of October 1, 2012 the international reserves of the country, including the funds of the National Welfare Fund totaled to $85,5 bln.