Bank of Georgia: Georgians Positive about Larization of Loans

Bank of Georgia Association President, Zurab Gvasalia, says he believes the Georgian people are positive about the recent government initiative to begin the larization of loans.

The Larization Program is a one-time measure for borrowers who were affected by the sharp depreciation of the national currency, Lari. The program was launched on January 17 and will continue for two months.

The Larization Program means that loans received in US dollars before January 1, 2015, and signed for against real estate collateral, will be eligible for conversion into Lari loans. In total, 33,000 loans have been identified as eligible within the program.

Gvasalia added that the interest of citizens towards the program is very high, and over 2000 people have already converted their loans from USD to GEL.

“The local society is very active towards the program, which means that they approve of the move to convert loans into the national currency. The Georgian banking sector is ready to serve all people willing to convert their loans,” the Bank of Georgia Association President said.

The government is to provide subsidies to ensure favorable exchange rates for loan-holders wishing to ‘de-dollarize’. In turn, the NBG will provide the appropriate level of cash liquidity in Lari.

The subsidy will not cover individuals whose sum of outstanding loans as of November 28, 2016 was more than $100,000, or if loans were transferred to another bank. The subsidy will also not cover individuals whose annual income in 2015 exceeded 100,000 GEL.

$40,000 is the maximum amount of a loan that can be converted into Lari. The program is being administered by the Government of Georgia and the National Bank of Georgia (NBG).

Thea Morrison