Georgia’s Finance Minister Does Not Support Tightened Lending Regulations

Georgia’s Finance Minister Ivane Machavariani says the National Bank of Georgia (NBG) should revise the recently imposed banking regulations which tightened the process of issuing loans.

“I did not support the initiative on imposing bank regulations of such a large scale and I do not support it now,” he said.

“I hope that the National Bank will revise these regulations if necessary. It’s a bit early to assess the effects of these regulations, but its effect on the construction sector, for example, is easy to see,” he said, adding the regulations should be softened as much as possible.

Last week, Georgia’s Minister of Economy and Sustainable Development Giorgi Kobulia said that the government is not going to soften the banking regulations, according to which banks are not allowed to give their clients loans without studying their solvency. 

"These regulations are adequate and serve to protect the people from taking loans without realizing the possible consequences,” he stated.

The minister added consultations are underway with the NBG regarding the issue.

The new banking regulations took effect in Georgia on January 1, 2019 meaning that people will not get loans from banks if there are no solid guarantees that they will be able to pay it back on time.

By Thea Morrison

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