The FINANCIAL — The top banks in Georgia claim that giving out loans has not become more prioritized for them than deposits. In the nearest future TBC bank will offer two new types of deposits. One of them will be targeted at all segments and the other for medium and low income segments. Bank of Georgia has introduced two new deposits since September 2008, within a two month period – Green Deposit and Investment Deposit.
Interest rates vary according to product type, currency, duration of deposit and interest accrual period. At Bank Republic, Societe Generale Group, a client can receive up to 15.00% on GEL time deposits, and up to 12.00% on EUR, USD and GBP time deposits.
“BR strives both for deposits and loans. This is also our strategy which first of all derives from our wish to satisfy clients’ needs. At Bank Republic, we give a priority to diversity of products in order to satisfy customer’s needs at best. So we try to have a variety of choices, not to promote a certain type only,” BR representative said.
“In recent years many banks in Georgia have been continuously expanding their credit portfolios, largely driven by promoting consumer loans, which certainly has left some families over-indebted. ProCredit Bank’s primary focus is the disbursement of business loans for micro and small enterprises, as well as the promotion of a savings culture among the population, as savings provide a level of financial stability for families which is very important,” PR of ProCredit Bank informed The FINANCIAL.
“In general, the quantity of people demanding loans always exceeds the quantity of depositors. Currently the demand on loans is still high. There are some limitations on giving out loans. As for the increased interest rates, this was the result of rise in price of financial resources and financial crisis. As we are planning to attract large volumes of funds with the help of new credit lines and financial aid, presumably in a couple of months our operations will become very active,” explained Tata Kurtanidze, Deputy Head of Sales Department of TBC.
“At HSBC Bank Georgia both loans and deposits have equal priority. We never stopped granting loans (new launched mortgage loan campaign, offers from 14% to 17% interest rate on max. 20 years mortgage loan) and nor have we ever had problems attracting or maintaining deposits,” HSBC Bank Georgia informed The FINANCIAL.
HSBC Bank Georgia has the following interest rates on Term Deposits: On a 3 month term deposit you’ll get 6% for a GEL account, 3% for USD and EUR accounts. On a 6 months deposit there’s 7% on a GEL account, 3.5% on USD and 3.25% on EUR. For 9 months you’ll get 8% on GEL, 4% on USD and 3.5% on EUR. For a one year term deposit you get 9% on GEL, 5% on USD and 4% on EUR.
“Both loans and deposits are part of the activity of a commercial bank by its nature. So if a financial institution calls itself a commercial bank, it can not avoid either of these two functions. As for the global market overview, Georgian banks were always balancing between funds attracted from international financial institutions and deposits from the domestic market. There will be little variations between these two poles, but in general this balancing policy will be the same,” said David Birman, Head of Marketing and PR Department of Progress Bank.
In TBC bank like in the banking market in general in Georgia, clients prefer term-deposits. The most popular term-deposit periods are 6-12 months. Increasing savings deposits are becoming more and more popular. Increasing savings deposits at TBC Bank are a so-called “Cash-Box”, that helps customers to collect money through monthly savings.
TBC Bank will accrue interest on each amount of deposit, enabling to accumulate the desired amount in the most efficient way. Initial minimum deposit requirement is 20 USD/EUR/GEL. Further monthly deposits are as low as 20 USD, EUR and GEL. No cap limits are set for the monthly deposits. The savings period ranges between 4 and 36 months. If you fail to deposit more than twice, an interest rate will be applied similar to those of Savings Deposits. Only cash operations are accepted for the increasing savings deposits. In the case of premature withdrawal the savings deposits interest rate will be applied to the accumulated amount. Fees Account opening and transactions are Free of Charge.10% income tax is be deducted from the interest accrued.
Bank Republic has 7 types of deposits: On call deposit, Term, Privileged, Convertible, Flexible, Cumulative and Child Deposits. Each of them is tailored to certain needs which customers have in Georgia.
The on call deposit gives the opportunity to earn interest income and at the same time have the possibility to withdraw an amount from the deposit account anytime.
Term and privileged deposits give the highest possible interest income, with flexible conditions of interest income accrual and amount placements.
The convertible deposit gives the possibility to convert the deposit in to another currency without losing interest. It is an especially valuable product during economically turbulent times.
The flexible deposit gives a high interest rate with flexible conditions for savings allocation and withdrawal.
HSBC Bank Georgia has the following terms on term deposit: Minimum amount of 1,000 GEL/USD/EUR, maturity from 3 months to 12 months. The customer has the possibility to set preferred maturity options and has immediate availability of overdraft facility (up to 80% of the Term Deposit principal amount).
The statement savings account is for those who need flexibility and at the same time want to earn interest. For the statements savings account there’s 5% on GEL, 2% on USD and 2% on Euro.
Bank of Georgia has Term, Savings ,Child, Call, Cumulative, Green Deposit and Investment Deposits.15% for GEL deposits; 12% for USD/EUR/GBP.
“As a new bank on the market, we wanted to offer our customers easy products, without complicated conditions and terms. So, initially we will introduce 2 kinds of deposits – Time Deposit and Demand Deposit (Saving Account.),” said Head of Marketing and PR Department of Progress Bank.
The interest rate for each concrete contract depends on deposit term, currency and other conditions such as prepayment of interest to depositor, ability to withdraw funds partially before the end date, etc. At Progress Bank, deposit interest rates start from 3% and reach 15.5%.
“There is a variety of choice on the deposit’s market, but if one will analyze, the vast majority of them are only branded variations of each other – with few differentiators targeting small niches of clients. The three most common types are: Time Deposit, Demand Deposit and Cumulative Deposit.”
“Our bank is proven as a reliable safe keeper of our clients’ funds, in whichever type of deposit they prefer. HSBC Bank Georgia’s savings account offers the convenience of our debit card, which gives the customer purchasing power and easy access to savings from any ATM around the globe,” stated HSBC Bank Georgia official representative.
“The clients at ProCredit Bank can choose from a wide range of savings products the one that fits their needs the best. The bank offers Term Deposits, Flexible Deposits, Savings Plan Deposits, Savings Accounts, Child Deposits and Child Savings Deposits “My Piggy Bank”.
“The most popular type of deposit among our customers is the Saving Deposit as it is very flexible: instalments can be of any amount and frequency. This kind of deposit has a high interest rate from 5-10% (depending on the currency) and the best method for interest accrual,” added the representative of ProCredit Bank.
Written By Levan Lomtadze
