National Bank Head Praises Gov’t Initiative of Annulling People's Debts

Koba Gvenetadze, the President of the National Bank of Georgia (NBG), says that the recent initiative of the government, which envisages annulment of bank debts of over 600,000 Georgian citizens including those on a so-called black list, is a “onetime but good initiative.”

As stated by Georgian Prime Minister Mamuka Bakhtadze on November 19, the project is being carried out with the assistance of Cartu Foundation, which was established by the ruling Georgian Dream (GD) Chair, billionaire Bidzina Ivanishvili.

Gvenetadze explains that Cartu Foundation and commercial institutions had negotiations and reached the agreement that the foundation will take responsibility for the loans of 600,000 black-listed people in banks, whose loans do not exceed GEL 2000.

The NBG Head explains that the central bank’s role in the negotiations is purely to give consultation to the parties.

"The role of the National Bank in this case is to play the role of consultant in dealing with a transaction between two business entities, in order to ensure the negotiations are conducted without deficiencies,” he said.

Gvenetadze noted the meeting was held in the NBG headquarters, which was requested by the financial institutions. He added that the representative of the Finance Ministry also attended the negotiations.

The Director of the central bank says after the debts are annulled, the people’s names will be removed from the black list, opening up the chance for them to find legal employment, a possibility previously closed to them due to their bank loans.

“I think this is a positive moment and it should positively affect economic growth. These people can find official employment and contribute to the development of the country’s economy.

However, Gvenetadze underlined that there is one risk factor – the borrowers might think their debts will also be annulled in the future.

“We declared from the very beginning that this is a onetime measure and it will not happen in the future,” he added.

The non-governmental sector believes the initiative of the ruling party contains signs of vote-buying ahead of the November 28 elections.

“The decision announced by the government contains signs of vote-buying and is directed in favor of Salome Zurabishvili, the candidate supported by the ruling party, aiming at winning the hearts of voters before the second round of the election,” the NGOs said.

The civil sector asked the Prosecutor’s Office to study the case. The investigation has already been launched.

GD Chair Ivanishvili rejected the accusations, saying he announced his plans to assist people in May.

Ivanishvili added that the recently announced project about the annulment of black listed people’s debts is a good example that everything can work if you try hard.

By Thea Morrison

Image source: 1TV

26 November 2018 20:31