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Ministry of Finance of Georgia to further Intensify Dialogue with Commercial Banks

Published: February 8, 2013 | 4:15 pm
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Nodar Khaduri met with CEOs of commercial banks operating in Georgia. The meeting was attended by Archil Mestrvirishvili, the Vice-President of the National Bank of Georgia (NBG) and Zurab Gvasalia, the President of the Association of Banks of Georgia (ABG). The meeting was held at the Ministry of Finance of Georgia on February 7.

The main goal of the meeting was to discuss the role of banking sector in the country’s economic growth tendencies.

“CEOs of banks got informed about the vision of the Ministry of Finance of Georgia, including macroeconomic forecasts. We talked about the challenges local banking sector faces today. It’s important to stress that banks will get daily updated information about state budget from the Ministry of Finance of Georgia and about ongoing developments in the country’s economy in general.  We’re ready to conduct intense talks with banks CEOs in order to create better business environment in the country,” declared Minister of Finance of Georgia.

As the Vice-President of AGB commented, the meeting carried a significant importance: “Minister of Finance of Georgia answered all the questions put by the banks’ CEOs and informed them about the Ministry’s visions and plans.” As Gvasalia noted, the topics discussed also covered the following aspects: bonds (which is the best means for banks for diversifying their assets), decreasing the level of dollarization, planned amendments to the tax code, inflation and currency rate, etc. “All these economic parameters look promising.”

Banks’ CEOs positively assessed the meeting.

“We agreed to have very frequent and very open communication with a lot of exchange of information and recommendations in order to improve situation for banking sector, business sector and help economic development in the country in general,” stated Sascha Ternes, CEO of ProCredit Bank Georgia.

“The fact that deposit growth indicator is quite high is a welcome tendency. We delivered certain initiatives, which can be implemented in cooperation with the Ministry of Finance of Georgia in 2013,” declared Vakhtang Butskhrikidze, CEO of TBC Bank. According to him, the meeting topics also covered the reforms that are planned by the Ministry of Finance of Georgia, including banks’ involvement in infrastructure projects; Banks’ CEOs delivered notes and suggestions regarding the draft document of the labor code.

According to Irakli Gilauri, CEO of Bank of Georgia, information on ongoing economic processes was exchanged during the meeting: “Ministry of Finance of Georgia is open and transparent to work with the banks and private sector in general. We had good economic results in January and I believe economic growth will be further improved in the second half of the year.”

Banks CEOs also spoke about problem loans with reporters. As Vakhtang Butskhrikidze noted, the problem exists, but it is not caused by banks: It’s mainly credit-financing companies to blame. Roughly speaking, banks are responsible only for only 3-5% of problem loans out of several thousand cases.”

Regarding this issue Irakli Gilauri commented that during the last two years Bank of Georgia deprived clients’ housing property in 35 cases only.  “This is a rather low indicator, considering that our bank’s mortgage portfolio includes around 10 000 loans. We do our best to help borrowers cover the loan by rescheduling their loans.”

Nodar Khaduri explained that the issue of problem loans depends on the welcome will of the banks. “Banks must show readiness to help the situation get settled. I believe banking sector is not interested in complicating this issue.”

Last but not least, Minister of Finance of Georgia, spoke about the financial amnesty initiative by President of Georgia Mikhael Saakashvili and highlighted that the government will not allow legalization of corrupt revenues: “Our task is to make finances transparent possible. It’s three months already that Disputes Council is working on such cases. Businesses that were fined unfairly are eligible to refer to the council. However, we’ll never let anybody enjoy the corrupt money.”

Nodar Khaduri also confirmed that from April 1 pensions in Georgia will be increased up to GEL 125 and from September 1 this indicator will go as high as GEL 150 (equal to minimum of subsistence).

Ministry of Finance of Georgia will organize similar types of meeting with banks’ CEOs in future as well.


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