ADVERTISEMENT
  • News
  • New York
  • Technology
  • Culture
  • Entertainment
  • Sport
  • More
    • Politics
    • Lifestyle
    • TV
    • Games
Thursday, June 12, 2025
  • Login
No Result
View All Result
NEWSLETTER
FINCHANNEL
  • Home
  • Business
    • BANKS
      • GeoBanks
    • Finance
    • Insurance
    • Markets
    • Pharmacy
    • Press Releases
    • RealEstate
    • RealEstate
    • Finance
    • Insurance
    • Banks
      • GeoBanks
    • Markets
    • Press Releases
    • Personal Finance
  • World
    • Americas
    • Europe
    • Georgia
      • Media
    • Ukraine
    • Europe
    • Georgia
      • Media
    • Ukraine
    • Americas
    • UK local news
  • Travel
    • Hotels in Georgia
    • Tours in Georgia
  • Videos
    • Promos
    • Soundslides
    • TheClinics
    • TheHoteliers
    • TheUniversities
    • TheHoteliers
    • TheClinics
    • TheUniversities
    • BestWorkplaces
    • Soundslides
    • Promos
    • Banking Forum
      • Promos
      • Soundslides
      • TheClinics
      • TheHoteliers
      • TheUniversities
  • Opinion
    • Editorial
      • Analysis
      • GORBI
      • OP-ED
      • VISA Editorial
    • Analysis
    • Gorbi
    • Book reviews
  • Tech
  • Interview
  • People
    • lifestyle
    • Health & Beauty
      • Coronavirus
    • LifeStyle
    • Employment
      • MyCareer
    • Education
    • Media
    • Celebrities
  • Oil&Auto
    • Auto
    • Energy
  • EN
    • EN
    • GE
  • Home
  • Business
    • BANKS
      • GeoBanks
    • Finance
    • Insurance
    • Markets
    • Pharmacy
    • Press Releases
    • RealEstate
    • RealEstate
    • Finance
    • Insurance
    • Banks
      • GeoBanks
    • Markets
    • Press Releases
    • Personal Finance
  • World
    • Americas
    • Europe
    • Georgia
      • Media
    • Ukraine
    • Europe
    • Georgia
      • Media
    • Ukraine
    • Americas
    • UK local news
  • Travel
    • Hotels in Georgia
    • Tours in Georgia
  • Videos
    • Promos
    • Soundslides
    • TheClinics
    • TheHoteliers
    • TheUniversities
    • TheHoteliers
    • TheClinics
    • TheUniversities
    • BestWorkplaces
    • Soundslides
    • Promos
    • Banking Forum
      • Promos
      • Soundslides
      • TheClinics
      • TheHoteliers
      • TheUniversities
  • Opinion
    • Editorial
      • Analysis
      • GORBI
      • OP-ED
      • VISA Editorial
    • Analysis
    • Gorbi
    • Book reviews
  • Tech
  • Interview
  • People
    • lifestyle
    • Health & Beauty
      • Coronavirus
    • LifeStyle
    • Employment
      • MyCareer
    • Education
    • Media
    • Celebrities
  • Oil&Auto
    • Auto
    • Energy
  • EN
    • EN
    • GE
No Result
View All Result
FINCHANNEL
No Result
View All Result
Home INTERVIEW

“NBG is planing to regulate crypto market in Georgia” – Koba Gvenetadze, Governor of National Bank of Georgia

The FINANCIAL by The FINANCIAL
April 4, 2022
in INTERVIEW
Reading Time: 7 mins read
51
A A
0
National Bank of Georgia Created Resolution Framework for Financial Stability of Georgia
Share on FacebookShare on Twitter

Q. How US-Georgia Free Trade Agreement will affect Georgian National currency or financial sector as whole?

A. A free trade agreement with the US, like any other agreements of this kind, may reasonably be expected to benefit the Georgian economy in a number of ways. Potential gains primarily include a boost to exports of goods as well as an impulse for greater foreign direct investments into the economy. The former will help narrow a current account deficit while the latter may give rise to solid foreign currency inflows as well as import of know-how. Other things being equal, all these are expected to result in a medium-run appreciation dynamics in effective exchange rate of lari. The financial sector would also benefit from subsequent improvements in the external balance – through lower risk premia, stronger resilience, and greater stability – especially for a financially dollarized country like Georgia. 

Q. US and EU are imposing sanctions on Russia that continues escalation of situation in Ukraine. As we know Russia will be cut of USD and other western money resources. How this will affect Georgia’s financial sector or businesses? 

RelatedPosts

Interview: Former British Air Commander Says Ukraine Must ‘Inflict Maximum Pain’ On Russia

Bizzy Cold Brew CEO Reveals What’s Fueling Ambitiously Strong Brand

Washington Wants to Avoid a Repeat of Last Year’s NATO Summit

Vitaferol – Top Vitamin D brand in Georgia

A. Ukraine and Russia are Georgia’s main trading partner countries. Geopolitical tension can be reflected on the Georgian economy through both direct and indirect channels. Geopolitical turmoil will significantly worsen economic outlooks in both countries. While Ukraine will suffer from immediate consequences of the military conflict, Russian economic growth prospects would drastically deteriorate as a result of sanctions. Deteriorated economic growth in both countries will dampen their demand and we will face some fall in exports of goods and tourism as well as in remittances from those countries. Meanwhile, geopolitical tensions make the region riskier for investors. Hence, it would increase sovereign risk premia, resulting in weaker capital flows in the region and elevated depreciation pressures on domestic currencies that may ultimately translate into inflationary pressures. While this is a yet another unfavorable development for the Georgian economy, for the last 6-7 years thanks to consistent macro management framework our macroeconomy has shown resilience to several pronounced external shocks. This is what international financial institutions as well as rating agencies have repeatedly emphasized.

Q. Russia is the number one in terms of money transfers to Georgia, thanks to the huge number of Georgian job immigrants there, or Georgians living in Russia. Please evaluate how Sanctions will be affecting money transfers? 

A. Over the last couple of years, dependency on money transfers from Russia has been falling and was significantly reduced as remittances have become more diversified. Currently, the share stands at only around 17% (17.5% in 2021), while 8-10 years ago the figure was more than 50%. It is also worth noting that in case of effective restrictions on electronic transfers some part of inflows from Russia might be substituted by transporting cash individually across the border.

Q. Does NBG considers joining western countries in the series of sanctions? or are you going to cut money turnover with Russian banks? 

A. The National Bank of Georgia has always operated and continues to operate in full compliance with the standards set by international resolutions. The United States, Great Britain, EU and other countries have imposed sanctions on Russian financial system due to Russia’s aggressive military activities in Ukraine. The National Bank of Georgia instructed the representatives of the Georgian financial sector to comply with the requirements of these sanctions.

Q. What are you expectation about GEL depreciation? 

A. Georgia is a small open economy with a floating exchange rate regime meaning that exchange rate may freely fluctuate due to changing market conditions. Thus, in the short run, it is virtually impossible to pin down dynamics in the exchange rate or to forecast its short-run trajectory. Even in the longer run, over which an exchange rate is believed to be mostly influenced by macroeconomic fundamentals, current high degree of uncertainty makes it extremely difficult to make predictions. While, on one hand, end of the pandemic and subsequent recovery in tourism is supposed to improve current account balance and ease pressures on the exchange rate, on the other hand, current geopolitical turmoil creates substantial risks in the opposite direction. 

Q. Recently NBG approved new code of ethics regulating communication with borrowers and keeping personal information. Please explain what are the new requirements and why they were necessary. 

A. Protecting the rights of consumers in the financial sector is one of the important tasks of the National Bank of Georgia. Hence, the NBG strives to improve current practices to align them with international best practices and address underlying challenges. 

The National Bank has approved a Code of Ethics for debt collection by financial institutions which is based on the requirements applied in developed economies and international best practice, reflecting the peculiarities of the local financial sector and the important issues raised by consumers. The enactment of the code will help strengthen the reputation of financial institutions as trusted partners in the eyes of consumers, and protect consumer rights and interests in the best way practicable, while ensuring that financial institutions conduct business relationships based on the principles of good faith, transparency and fairness.

The Code introduces the obligations of the financial institutions vis-à-vis the customers in the process of collecting debt, which includes but are not limited to the following important issues:

  • Obligation to provide correct information to the customer, adhere to ethical and moral norms, and communicate in a business and polite manner. In dealing with customers and contact persons, the financial institutions should not provide misleading and/or incorrect information to them. The information that is delivered, undelivered, inaccurately and/or incompletely provided to the customer should not motivate them to make a decision that they would not have made if they had accurate and complete information.
  • The Code establishes a procedure for contacting customers and contact persons. It includes the form of communication, time and a list of information to be provided and/or sought. Contacting a contact person will only be possible in the cases provided for in the current/active contract, while contacting related third parties will only be possible to determine the location of the borrower. It is not permitted to share information on customer liability with a third party. The concerned persons can be contacted only in the period from 09:00 AM to 20:00 PM. In addition, the contact person is entitled to request the financial institution to terminate communication with them.
  • The financial institutions now have an obligation to maintain records of communication with customers and contact persons and to keep them for a period of two months.
  • Disposal of the loan portfolio, with some exceptions, will be allowed only to entities under the supervision of the National Bank of Georgia. However, if the loan portfolio is managed by another entity, the entity subject to the supervision of the National Bank of Georgia will be responsible for the compliance with the requirements of the Code, etc. 

The new requirements are meant to improve the quality of consumer protection in the financial sector. The National Bank will continue to monitor market practices and upgrade the applicable regulatory framework as necessary.

Q. As you know interest rates of mortgage loans in GEL at Georgian banks increased significantly. While rates for USD loans remain low. Do you think that NBG regulations are limiting individual borrowers seeking USD loans and giving advantages to companies that can get larger loans in USD. 

A. When comparing GEL mortgages to foreign currency alternatives, interest rate differential is not the only factor for consideration. Taking USD credit makes the borrower whose income is in Georgian lari exposed to the currency risk, which is significant, given the exchange rate volatility that we or the countries in the region experience. Moreover, the major part of FX mortgage loans are floating interest rate loans, further exposing the clients to the interest rate risk. This is especially noteworthy considering historically low levels of US dollar and Euro interest rates and their potential rise during upcoming periods. On the other hand, to address elevated inflationary pressures, NBG has already tightened monetary policy and the current rate stands at highest level for the decade. 

It is worth mentioning that most of the borrowers have income in GEL and fully unhedged to currency fluctuations. To mitigate the risk, NBG’s responsible lending regulation requires stronger borrower level buffers when taking FX credit. In addition, to protect the most vulnerable, Civil Code mandates lender to issue less than 200,000 GEL equivalent loans in local currency only. The companies which borrower larger amounts have a flexibility in currency choice but at the same time they are more capable to manage risks or use hedging instruments. 

Q. What is the estimated turnover of crypto currency in Georgia? 

A. Due to the fact that the VASP sector is not regulated at this stage, we do not have accurate data on this issue. However, the fifth Round Mutual Evaluation Report of Georgia which was published in September 2020 by Committee of Experts on the Evaluation of Anti-Money Laundering Measures and the Financing of Terrorism – MONEYVAL states that the exchange transaction volume can be between GEL 3.5 to 5 million (EUR 1 to 1.5 million) per month.

Q. Does NBG plan to regulate crypto market in Georgia? 

A. Yes, the NBG is planning to regulate crypto market in Georgia. To this regard we have developed an initial draft of the relevant legislative changes in accordance with Financial Action Task Force requirements. We are also benefitting from technical assistance of the International Monetary Fund staff in the development of this regulatory framework. Draft of Legislative changes at this stage includes registration / licensing, compliance testing and AML control requirements for crypto market players.

It should be noted, however, that before aforementioned regulations enters into force, some measures have already been taken by the NBG. In particular, financial institutions have been banned from providing virtual asset exchange and transfer services. Also, persons that carry out activities related to virtual assets should be classified by financial institutions as high risk clients and should be subject to appropriate enhanced preventive measures.

Q.Currently there is only one Russian bank operating in Georgia. Are you going to revoke the license in a lights of sanctions?

A. We are legally restricted to share any supervisory information that NBG plans to undertake with regard to a specific bank. But we can say that one of the main tasks of the National Bank of Georgia is to ensure the stability of financial sector. Protecting the interests of financial sector depositors is one of the main priorities under this mandate. Our task is to guarantee the safety of each depositor’s funds in the Georgian financial system. The interests of all depositors will be protected and the liabilities will be fully satisfied.

Related Posts

Interview: Former British Air Commander Says Ukraine Must ‘Inflict Maximum Pain’ On Russia
INTERVIEW

Interview: Former British Air Commander Says Ukraine Must ‘Inflict Maximum Pain’ On Russia

by The FINANCIAL
September 17, 2024
0

Sean Bell served as a combat pilot and air vice marshal in the Royal Air Force and held several other...

Read more
Bizzy Cold Brew CEO Reveals What’s Fueling Ambitiously Strong Brand

Bizzy Cold Brew CEO Reveals What’s Fueling Ambitiously Strong Brand

Washington Wants to Avoid a Repeat of Last Year’s NATO Summit

Washington Wants to Avoid a Repeat of Last Year’s NATO Summit

June 28, 2024
Lika Lobzhanidze, founder and director of ArtPharma

Vitaferol – Top Vitamin D brand in Georgia

June 15, 2024

Discussion about this post

  • Trending
  • Comments
  • Latest
Ampersand wins £22m five-year contract at London Zoo

Ampersand wins £22m five-year contract at London Zoo

June 25, 2012
Domestic tourism numbers decreased in Georgia

Georgian economy contracted by 5.5 % in July 2020

August 31, 2020
Leon Botstein’s Five-Decade Transformation at Bard College

Leon Botstein’s Five-Decade Transformation at Bard College

May 28, 2025
Teaching porn literacy

A sizable percentage of internet porn users, roughly 40% are women

January 17, 2024
Hungary: Postponement of the foreign agent-style law is a first step, EFJ calls for its withdrawal

Hungary: Postponement of the foreign agent-style law is a first step, EFJ calls for its withdrawal

June 10, 2025
New World Bank Group Country Director for Belarus, Moldova and Ukraine Welcomes Reform Efforts in Moldova

Moldova urged to strengthen protection of vulnerable victims

June 11, 2025
Will digital media be decisive in general election – as it was in Donald Trump’s victory? 

How to Align Social Media with Your Overall Marketing Strategy

June 11, 2025
Presence of minority languages in media and education in Slovenia should be strengthened, Council of Europe

Presence of minority languages in media and education in Slovenia should be strengthened, Council of Europe

June 11, 2025
How to Avoid Common Loan Mistakes: A Borrower’s Guide

How to Avoid Common Loan Mistakes: A Borrower’s Guide

June 11, 2025
7 Ways to Improve Your Business Finances

7 Ways to Improve Your Business Finances

June 11, 2025
ADVERTISEMENT

Popular Last 24h

  • Ampersand wins £22m five-year contract at London Zoo

    Ampersand wins £22m five-year contract at London Zoo

    3546 shares
    Share 1418 Tweet 887
  • How to Align Social Media with Your Overall Marketing Strategy

    20 shares
    Share 8 Tweet 5
  • Fullscript vs. Rupa Health: What the Acquisition Means for Providers and Patients

    19 shares
    Share 8 Tweet 5
  • Sharon Srivastava and the Human Cost of a Digital Disinformation Campaign

    17 shares
    Share 7 Tweet 4
  • How a Chinese Copper Art Workshop from Jiande Win Hearts, Applause in Florence

    17 shares
    Share 7 Tweet 4
  • Hungary: Postponement of the foreign agent-style law is a first step, EFJ calls for its withdrawal

    35 shares
    Share 14 Tweet 9
  • Moldova urged to strengthen protection of vulnerable victims

    16 shares
    Share 6 Tweet 4

LATEST POSTS

New World Bank Group Country Director for Belarus, Moldova and Ukraine Welcomes Reform Efforts in Moldova

Moldova urged to strengthen protection of vulnerable victims

June 11, 2025
Will digital media be decisive in general election – as it was in Donald Trump’s victory? 

How to Align Social Media with Your Overall Marketing Strategy

June 11, 2025
Presence of minority languages in media and education in Slovenia should be strengthened, Council of Europe

Presence of minority languages in media and education in Slovenia should be strengthened, Council of Europe

June 11, 2025
How to Avoid Common Loan Mistakes: A Borrower’s Guide

How to Avoid Common Loan Mistakes: A Borrower’s Guide

June 11, 2025
7 Ways to Improve Your Business Finances

7 Ways to Improve Your Business Finances

June 11, 2025
How a Chinese Copper Art Workshop from Jiande Win Hearts, Applause in Florence

How a Chinese Copper Art Workshop from Jiande Win Hearts, Applause in Florence

June 11, 2025
Fullscript vs. Rupa Health: What the Acquisition Means for Providers and Patients

Fullscript vs. Rupa Health: What the Acquisition Means for Providers and Patients

June 11, 2025
Sharon Srivastava and the Human Cost of a Digital Disinformation Campaign

Sharon Srivastava and the Human Cost of a Digital Disinformation Campaign

June 11, 2025
Hungary: Postponement of the foreign agent-style law is a first step, EFJ calls for its withdrawal

Hungary: Postponement of the foreign agent-style law is a first step, EFJ calls for its withdrawal

June 10, 2025
What Today’s Digital Creators Need to Know About the Art of Hosting 

What Today’s Digital Creators Need to Know About the Art of Hosting 

June 10, 2025

LATESTBUSINESS

Dropshipping Risks: How to Avoid Copyright Infringement Issues

All You Need to Know About Renovated Shipping Containers 

by The FINANCIAL
June 5, 2025
0

Insurers Planning to Increase Investment Risk Profiles

by The FINANCIAL
June 5, 2025
0

U.S. Healthcare Leaders Expect Widespread Adoption of Artificial Intelligence by 2023

Survey Reveals Institutional Investors and Wealth Mnagers Are Increasing Their Exposure to AI

by The FINANCIAL
June 5, 2025
0

Why Tbilisi Real Estate Investing is Buzzing Right Now

Why Tbilisi Real Estate Investing is Buzzing Right Now

by The FINANCIAL
June 3, 2025
0

Protected: How EquitiesFirst and Alternative Financing Could Help Fund the Global Robotics Market Race

Protected: How EquitiesFirst and Alternative Financing Could Help Fund the Global Robotics Market Race

by The FINANCIAL
May 30, 2025
0

Voters Still Support Allowing Health Insurance To Be Sold Across State Lines

How Much Health Insurance Do You Need for Your Parents?

by The FINANCIAL
May 27, 2025
0

ESSEC partners with French AI solution Mistral AI for innovation in research and education

ESSEC partners with French AI solution Mistral AI for innovation in research and education

by The FINANCIAL
May 23, 2025
0

How biases influence CEOs throughout their careers

7 Ways a CFO’s Role Is Evolving From Number Cruncher to Strategic Advisor

by The FINANCIAL
May 23, 2025
0

GET IN TOUCH

Submit guest post/Letters to the Editor:

editor (at) finchannel.com

Sales & Marketing: (+995 558) 03 03 03 Email: marketing (at) finchannel.com

Whatsup: (+995 599) 96 52 52

Georgia:

(+995 599) 96 52 52 Email: editor (@) finchannel.com

Postal address: 17 Mtskheta str. Tbilisi, Georgia 0179 The FINANCIAL

RESOURCE

  • Work at the FINANCIAL
  • ePaper
  • Advertise in The FINANCIAL
  • Access ePaper
  • Guest posts
  • Contributed articles
  • AmericanStockNews
  • Coupon Codes
  • GLOSSY MAG
American Culture Center
ACC Partner

GUIDEBOOK

  • Meet our team
  • Invest in Georgia
  • Become contributor
  • Archive

FOLLOW US

  • Facebook
  • Twitter
  • Google+
  • Youtube
No Result
View All Result
  • Home
  • Business
    • BANKS
      • GeoBanks
    • Finance
    • Insurance
    • Markets
    • Pharmacy
    • Press Releases
    • RealEstate
    • RealEstate
    • Finance
    • Insurance
    • Banks
      • GeoBanks
    • Markets
    • Press Releases
    • Personal Finance
  • World
    • Americas
    • Europe
    • Georgia
      • Media
    • Ukraine
    • Europe
    • Georgia
      • Media
    • Ukraine
    • Americas
    • UK local news
  • Travel
    • Hotels in Georgia
    • Tours in Georgia
  • Videos
    • Promos
    • Soundslides
    • TheClinics
    • TheHoteliers
    • TheUniversities
    • TheHoteliers
    • TheClinics
    • TheUniversities
    • BestWorkplaces
    • Soundslides
    • Promos
    • Banking Forum
      • Promos
      • Soundslides
      • TheClinics
      • TheHoteliers
      • TheUniversities
  • Opinion
    • Editorial
      • Analysis
      • GORBI
      • OP-ED
      • VISA Editorial
    • Analysis
    • Gorbi
    • Book reviews
  • Tech
  • Interview
  • People
    • lifestyle
    • Health & Beauty
      • Coronavirus
    • LifeStyle
    • Employment
      • MyCareer
    • Education
    • Media
    • Celebrities
  • Oil&Auto
    • Auto
    • Energy
  • EN
    • EN
    • GE

© 2025 Intelligence Group llc

Welcome Back!

Login to your account below

Forgotten Password?

Retrieve your password

Please enter your username or email address to reset your password.

Log In

Add New Playlist

This website uses cookies. By continuing to use this website you are giving consent to cookies being used. Visit our Privacy and Cookie Policy.