Capital conservation ratios: Table 4A is entered by the CET1 capital ratio, while the buffer under 4.31(2) excludes CET1 used for the T1 and Total Capital ratios

BBR 4.31(2) provides that the capital conservation buffer must be made up of CET1 capital above the amounts used to meet the CET1, T1 and Total Capital ratios, and 4.32(1) requires a bank whose buffer falls below the required minimum to restrict its distributions. Under 4.32(2) and Table 4A, however, the minimum capital conservation ratio is selected by the bank's CET1 capital ratio, which does not exclude the CET1 used to meet the T1 and Total Capital ratios; a ratio above 7% gives 0%. For a bank whose capital is all CET1, the buffer becomes positive only above 8% of risk-weighted assets and reaches 2.5% at 10.5%. With risk-weighted assets of USD 1,000 million, CET1 of USD 85 million (8.5%) and no AT1 or T2 capital, the bank's ratios are above the minima, its buffer under 4.31(2) is USD 5 million against USD 25 million, so it is in breach of 4.31(1) and 4.32(1) requires it to restrict distributions; yet Table 4A sets no positive minimum retention (0%). BPG Chapter 4 paragraph 11(c) states that a bank with a CET1 capital ratio of more than 7% can distribute 100% of its earnings; 4.33(1) also compares CET1 with the CET1 ratio plus the buffer. IBB 5.2 to 5.4 and Table 5.1 have the same structure. Basel III paragraph 131 measures the CET1 ratio of the table excluding the CET1 needed for the 6% Tier 1 and 8% Total Capital requirements.

Proposed correction

Please clarify how the restriction under 4.32(1) is quantified for such a bank, and consider either measuring column 2 of Table 4A as the CET1 capital ratio excluding the CET1 used to meet the T1 and Total Capital ratios (4.5% plus the buffer under 4.31(2)) and aligning 4.33(1), BPG Chapter 4 paragraph 11 and IBB 5.3 to 5.4, or, if Table 4A reflects the intended policy, aligning 4.31(2) and Form 30 line 7 with it.

Jurisdiction

Kazakhstan — AIFC

Act

AIFC Banking Business Prudential Rules (BBR), V6

Place

BBR 4.31(2), p.30

Record

Discrepancy

Class

Text of the act

Where it arose

The text of the act

Arxo's conclusion

Confirmed

Official text

Unchanged at last check

Last checked

2026-10-25

Evidence

Reproduced by execution. Quotations are verbatim from the official material; translations are ours and marked.

A Bank’s capital conservation buffer must be made up of CET 1 Capital above the amounts used to meet the Bank’s CET 1 Capital ratio, T1 Capital ratio and Total Capital ratio in Rule 4.12.

If a Bank’s capital conservation buffer falls below the required minimum, the Bank must immediately conserve its capital by restricting its distributions.

Capital conservation ratio is the percentage of earnings that a Bank must not distribute if its CET 1 capital ratio falls within the corresponding ratio in column 2 of that table.

>7%

A Bank with a CET 1 Capital ratio of more than 7% can distribute 100% of its earnings.

A firm’s Capital Conservation Buffer must be made up of CET 1 Capital above the amounts used to meet an Islamic Bank’s CET 1 Capital ratio, Tier 1 Capital ratio and Regulatory Capital ratio

A firm with a CET 1 Capital ratio of more than 7% can distribute 100% of its earnings.

How to check it without Arxo's tools

1. Open AIFC Banking Prudential Rules_V6 (with amendments as of 13 April 2025, which commence on 13 October 2025) and find BBR 4.31(2), p.30; BBR 4.32(1), p.30; BBR 4.32(2), p.30; BBR Table 4A row 5, p.31. Compare the text with the quotation above. A copy is kept in this register: 6384caa7b1938818-bbr_v6_13.10.2025_ma.pdf (SHA-256 6384caa7b19388180b780ec19044e1261cae3021c63c670f14ceb35285107022, copy of the official file).
2. Open AIFC BANKING PRUDENTIAL GUIDELINE and find BPG Chapter 4 para 11(c), p.13. Compare the text with the quotation above. A copy is kept in this register: c0ab57e226481347-aifc-banking-prudential-guideline.pdf (SHA-256 c0ab57e226481347e28c09650f905debc948a442ad7b65fa2db2d196d0b22009, copy of the official file).
3. Open AIFC Islamic Banking Business Prudential Rules and find IBB 5.2(2) (sister rule); IBB 5.3 Guidance (iii) (sister rule; guidance is part of the rules, IBB 1.3(b)). Compare the text with the quotation above. A copy is kept in this register: e8b3c15b1ff574fd-aifc-islamic-banking-business-prudential-rules.pdf (SHA-256 e8b3c15b1ff574fd59504ade7cc9e0488ed5fa6ecfdc7816e3dc603bf4caedeb, copy of the official file).
4. The finding holds if the quoted passages read as shown and the comparison gives the result stated at the top of this page. If it does not, write to us with the record ID.

How this finding was made

AI agents read the official texts, turned the provisions concerned into executable rules and ran the comparison; they also drafted this record. A person at Arxo checked the finding and approved the report before it was sent (2026-10-27).

Responsible institutions

• Astana Financial Services Authority (AFSA) — author of the AIFC Rules

Reported to

Responses

No response recorded.

Documents and reproduction

• AIFC Banking Prudential Rules_V6 (with amendments as of 13 April 2025, which commence on 13 October 2025)
• AIFC BANKING PRUDENTIAL GUIDELINE
• AIFC Islamic Banking Business Prudential Rules

Related records

• ARXO-2026-0126 — Table 4A capital conservation ratios: rows share boundary values ('to' / '≥') and 7.0% sits between '≥6.375% to 7.0%' and '>7%'

History

1. 2026-10-25Confirmed by Arxo
2. 2026-10-27Entered in the register
3. 2026-10-27Reported to Astana Financial Services Authority (AFSA) (e-mail)

Cite this record

Arxo Law, Arxo Findings Register, ARXO-2026-0143, https://arxo.io/findings/ARXO-2026-0143/ (status as of 2026-10-25). Data: ARXO-2026-0143.json.