Commercial Bank Risk Management: Practices and Challenges in Central Asia — A Case Study of Kazakhstan

Abstract

Against the backdrop of accelerating global change and mounting economic uncertainty, financial stability has emerged as a fundamental prerequisite for sustainable economic development. As the core component of the financial system, commercial banks’ risk management capabilities directly determine the stability and sound operation of the entire financial system. The 2008 global financial crisis exposed numerous deficiencies in risk management practices within the international banking industry, prompting the Basel Committee on Banking Supervision to formulate Basel III. This framework aims to enhance the quality of bank capital, introduce liquidity regulatory standards, and strengthen the macroprudential regulatory architecture.

Central Asia occupies a pivotal position in the Belt and Road Initiative, and the stability and development of its financial markets carry substantial significance for regional economic cooperation. As the largest economy in Central Asia, Kazakhstan’s banking sector risk management practices exert an important demonstrative effect on neighboring countries. According to statistics from the National Bank of Kazakhstan, as of early 2025, the country was home to 22 commercial banks with total banking assets of approximately USD 57.6 billion, accounting for more than 60% of GDP. Therefore, an investigation into risk management practices among commercial banks in Kazakhstan carries important theoretical and practical implications for understanding financial stability in Central Asia and advancing regional economic cooperation.