In December 1990, the Almaty branch of Gosbank (the former Soviet State Bank) was made into the Independent Kazakh (National Bank of Kazakhstan-NBK). In the next year the existence of private and public financial institutions were legalized. In 1993, the parliament approved a new banking law that separated the National Bank of Kazakhstan from the government, and gave the central bank the power to conduct monetary and credit policies and regulate the commercial banking sector. Before November 1993, monetary and credit policy was under the control of two central banks, the Russian Central Bank (RCB), which also acted as the ruble zone's central bank, and the NBK. Until November 1993, the currency unit in the country was the ruble. On 15 November 1993, Kazakhstan established its own currency, the tenge.
In 1995 the NBK continued the tight monetary stance it adopted in 1994, becoming increasingly sophisticated in its monetary operations.
The NBK admits that corporate governance and management in banks is weak: Kazakhstan's banks tend to be very small, concentrated in Almaty, and more interested in dealing in treasury bills than in providing long-term credits to lenders. As of 2003, there was no deposit insurance scheme in operation. Organized crime is also a problem for many banks, with security therefore assuming a considerable cost.
The International Monetary Fund reports that in 2001, currency and demand deposits—an aggregate commonly known as M1—were equal to $1.8 billion. In that same year, M2—an aggregate equal to M1 plus savings deposits, small time deposits, and money market mutual funds—was $3.8 billion. The discount rate, the interest rate at which the central bank lends to financial institutions in the short term, was 9%. The reform of the banking sector was initially set up according to a two-tier system, with the central bank occupying the top tier and specialized, sector-oriented banks occupying the second tier. Among these specialized banks are Narodny Bank (for savings); Kazakhstan Bank (for industry and agriculture); Turan Bank (for the construction sector); Kredsotsbank (for housing and municipal services); and Agroprombank (for agriculture).
In 2002, there were 47 commercial banks, including one state bank (3% of total financial sector assets), one intergovernmental bank, 16 banks with foreign participation, and 12 foreign representative offices. In 2001, total bank assets reached $3.82 billion.
The Kazakhstan Stock Exchange and the Central Asian Stock Exchange both operate in Kazakhstan.