Addressing a banking congress in Astana, Nazarbaev said that he welcomes the expansion of Kazakh banks abroad, "especially in CIS countries."
However, he said priority should be given to stabilizing and strengthening Kazakhstan's financial system and warned that overexpanding banking operations abroad could cause a financial crisis at home.
In his address, a transcript of which is posted on the presidential website (www.akorda.kz), Nazarbaev also expressed concern at the lending policies of Kazakh banks.
He said the volume of loans granted to companies and industries by Kazakh banks had increased by nearly half in the first nine months of this year, along with 75 percent in 2005 and 52 percent in 2004.
Nazarbaev, who has been in power since 1989 and won reelection in December, also urged the central bank and the government to take urgent steps to curb inflation.
Kazakhstan's central bank says this year's inflation rate should stand at 8.5 percent. But Nazarbaev said there is "no guarantee" that inflation will not grow further.