- Askar Izimbayevich, could you please tell us about the SESS main results over the past few years?
- The Law of the Republic of Kazakhstan “On the State Educational Savings System” was adopted on January 14, 2013. Over six years about 20 thousand citizens of Kazakhstan have already trusted this saving mechanism within the framework of the State educational savings system. The total amount of premiums paid to depositors made more than 2.5 billion KZT.
The banks participating in the SESS program are: JSC Halyk Bank Kazakhstan, JSC First Heartland Jýsan Bank (former JSC Tsesnabank), JSC Nurbank, Subsidiary of JSC VTB Bank (Kazakhstan), JSC Tengri Bank.
More than 600 educational organizations (universities, colleges in the country) have entered into an agreement in SESS field with our Company. More than 800 depositors used the deposit funds for educational services. Of these 177 depositors transferred funds for educational services to foreign educational organizations.
- Have any innovations been made to SESS?
- After rebranding the educational deposits within the framework of SESS have acquired the new name AQYL, under which the promotion of this product is carried out in all participating banks. We believe that this will improve people’s perception of educational deposits.
It should be noted that a number of following amendments were made to the current legislation aimed at SESS improvement:
• The requirements for participating banks have been optimized: the requirement regarding ownership of branches in regional centers, the capital and cities of republican significance was excluded;
• The protection of educational deposits from all types of encumbrances (arrests, restrictions, penalties) has been introduced;
• The possibility of returning an excessively accrued state premium to the budget and additional accrual of premium for previous periods has been realized;
• A number of powers for SES regulation have been transferred from the Government of the Republic of Kazakhstan to the Ministry of Education and Science of the Republic of Kazakhstan.
Of course, time goes by, and the Company receives many proposals for program improvement, therefore we assume that the program will keep improving in the future.
- How high is the demand for participation in SESS from the public?
- It should be noted that AQYL educational deposits are interesting not only for common people, but also companies that implement corporate social programs for their employees, as well as philanthropists who want to help children from vulnerable groups. For example, two years ago, well-known athletes Ilya Ilyin, Serik Sapiyev and Alexander Levit opened educational deposits for children of capital orphanage. There are also many other positive examples.
The implemented project in cooperation with the private foundation “Bobek” in terms of which about 8 thousand deposits worth about 5 billion tenge have been opened, is also very representative.
- What does the state savings system give to Kazakhstani people?
- The educational AQYL deposit can be opened by all citizens of Kazakhstan regardless of age for technical, higher and postgraduate education.
Savings can cover university or college studies in Kazakhstan, as well as any form of education abroad, including educational and language courses.
The difference between educational AQYL deposits from conventional ones is in a high yield achieved at the expense of the state premium from 5% and bank remuneration of 10% in average annually.
If the deposit holder or his child enrolls in a university with a grant, he may continue accumulating funds for other education levels, or withdraw the deposit with the state premium in full, or transfer funds to the AQYL educational deposit opened in favor of a third party, for example, the second child (brothers, sisters).
It is important to note other additional benefits of AQYL deposits:
- They are protected from arrests of third parties (creditors, courts, etc.);
- As a type of income are not subject to taxation;
- A guaranteed return of savings by the state up to 10 million tenge;
- The state premium is annually accrued within for 20 years;
- Monthly capitalization of deposit;
- Once a year funds can be transferred from one bank to another.
- Recently, in an interview with our publication, Oksana Radchenko, the Board Chairman of JSC Halyk-Life, expressed the thought that life insurance companies (LICs) could well become SESS participants. In this regard, do you think, LICs can contribute to SESS promotion?
- As we have previously mentioned, the Company often receives development proposals. Thus, we have received an offer regarding participation of life insurance companies in SESS. Today, only second-tier banks have the right to attract educational deposits.
If insurance companies offer an interesting product for people, including, among other things, a mechanism for guaranteed return on deposits, we are ready to support it.
- What other measures can be taken for SESS development?
- Educational deposits have a short history. We believe that for SESS development an enhanced informational support in terms of product promotion by our Company as well as second-tier banks is needed. This includes advertising in media, informational commercial broadcasting on local and republican TV channels, educational article placement in periodicals of republican and local significance, and participating in promotion of financial literacy of local executive bodies, youth centers, schools, and kindergartens.