The banking system of Kazakhstan was a constituent of the all-Union system until 1987, the USSR banking system consisted of a three bank monopoly: Gosbank of the USSR (State Bank), Stroibank (Construction bank), and Vneshtorgbank (Export-import Bank). The leading position belonged to the state bank, which was the unique issuing body and the central crediting organ. All free capital was automatically accumulated on the accounts of this bank. The capital was directed to loans of governmentally defined sectors of the economy.

The year 1987 witnessed the start of banking sector reorganisation. The first stage provided for the creation of a two-tier system, consisting of the central issuing bank and specialised banks directly serving the economy. Gosbank was vested with powers to co-ordinate the operations of all other banks and to determine the monetary and crediting policies. All other banks were to specialise in separate economic sectors, thus, a special bank was organised for each sector - Promstroibank for construction, Agroprombank for agriculture, Vnesheconombank for the foreign economic sphere, Sberbank (Savings Bank) for deposit-taking and individual client crediting, etc.

Due to strict specialisation and direct connection of separate banks to economic sectors, deposits and liabilities were unevenly spread among the banks, creating imbalance in their development. Having created only a slightly different banking system, the first stage of reorganisation ended in no in-depth reformation.

The second stage of reorganisation aimed at creation of a market-like system of monetary and crediting institutions and transition to efficient use of monetary inflows in the sectors where they were most required.

Upon obtaining its independence, Kazakhstan formed its own sovereign banking system, which was principally based on that of the USSR, i.e. comprised of the central state bank (National Bank of the then Kazakh Soviet Socialist Republic, later - of the Republic of Kazakhstan) and a number of commercial banks.

According to the Banking Law adopted in August 1995, the republic has a two-tier banking system with all the banks meeting high prudential requirements. The first tier is presented by the National Bank of Kazakhstan (NBK). All other banks are second-tier banks.

Some elements of the banking system had been formed under the communist era (e.g., predecessors of TuranAlem Bank), but actual formation of the sovereign banking system started in November 1993.

The NBK is the major regulatory and the only licensing body in the banking sector of Kazakhstan. It reports directly to the President. The NBK's activities are regulated by the presidential decrees "On The National Bank of the Republic of Kazakhstan" and "On Banks and Banking Activities in the Republic of Kazakhstan", as well as by other regulations, presidential decrees, and international agreements ratified by Kazakhstan.

The NBK's main objectives are to minimise inflation and secure stability of the national currency, the Tenge (KZT), which was introduced in November 1995.

As at the beginning of 1997, the number of banks totalled 106, by the end of the year the National Bank of Kazakhstan had revoked licenses of 23 banks (17 licenses were revoked due to illegality in the banks' operations, 1 for liquidation, 5 for mergers). Seven more licenses were withdrawn in January 1998. So presently there are 76 banks operating in the country. Among them, 1 bank is inter-state, 6 banks are governmental or 100% state-owned and 20 banks have foreign shareholders in authorised capital. The number of banks is expected to fall further following the National Bank's resolution to bring second-tier banks up to international standards (NBK's decree "On Transformation of Second-Tier Banks to International Standards") and tightening of prudential requirements, such as minimum authorised capital of US $4 mln, adequacy level of 8%.

Deputy Chairmen of the NBK (S.A.Akhanov, N.Abdulina, A.Nalibaev and M.Kudyshev), each responsible for a specific field of NBK's operations, are nominated by the Chairman and are subject to appointment by the President of Kazakhstan.

The major NBK departments are Research & Statistics; Control & Auditing; Banking Supervision; Legal; Cash & Precious Metals Department. There are also two representative offices in Akmola and Moscow (Russia).

In 1994, Kazakhstan adopted the Basle prudential requirements proposed in 1988. On May 17, 1996, the Board of the National Bank approved the procedure for upgrading second-tier banks to international standards. The first group of the most advanced banks (top-tier) should reach international standards by the end of 1998. The second group – by the end of 2000.