Kazakhstan wants to freeze bank lending rates

ASTANA Oct 15 (Reuters) - Kazakhstan's state banking regulator proposed on Wednesday to stop banks from raising interest rates on fixed-rate loans for the next three years to ease the impact of a global credit crunch on the wider economy.

Kazakh banks have in some cases increased interest rates on existing fixed-rate loans, Murat Baisynov, Deputy Chairman of the Financial Supervision Agency (FSA), told parliament.

"We are doing this to protect borrowers," Baisynov said.

He said the measure, part of a financial stabilisation package currently processed by the lower house of parliament, would override clauses in loan contracts that had previously allowed banks to revise interest rates.

Most large Kazakh banks have said they had repriced their loan books since the beginning of the crisis.

The government expects Kazakhstan's gross domestic product (GDP) growth to slow down to 5.4-5.5 percent this year from the average 10 percent recorded since 2000. (Reporting by Raushan Nurshayeva; Writing by Olzhas Auyezov; Editing by Victoria Main)