bne -

The Kazakh government will prevent any domestic banks from collapsing, President Nursultan Nazarbayev told a government meeting on February 21.

Concerns about the stability of the Kazakh banking sector have been growing since the devaluation of the tenge on February 11 was followed by a run on three major banks. Nazarbayev said that local banks "will not go bankrupt" and that the government will "guarantee the safety of people's savings."

"As for those who provoked recent financial distress in some banks of Kazakhstan, they have already been found and would be held liable. What we all want is peace and stability in Kazakhstan and this is a goal for the entire nation," he added, according to a statement on the presidential website.

On February 19, hundreds of people queued at branches of Alliance Bank, Bank CenterCredit and Kaspi Bank in an attempt to withdraw money from hard currency accounts. Panic spread as some branches refused to return deposits and stocks of cash ran short. While the rush has since slowed, Kaspi reports that over $200m was withdrawn from its accounts.

Several people have been arrested in Almaty on suspicion of causing the bank run by sending out thousands of SMSs and WhatsApp messages claiming the banks were about to collapse.

Concerns about the stability of the Kazakh financial system have been growing since a 19% devaluation of the national currency, the tenge, was announced, despite efforts by the government and central bank to reassure the population and maintain price stability.