Giorgi Kadagidze meets with the Heads of Developer Companies
During the meeting with the representatives of developer companies, Giorgi Kadagidze, the President of the National Bank of Georgia spoke about the current state of developer market, current challenges and the measures carried out by the National Bank for the sake of development of the sector.
"During the meeting with the representatives of developer and construction companies, we discussed three key issues. First issue relates to our support program for mortgage loans in GEL, which already yielded first result: the share of mortgage loans in GEL has increased which in its turn, contributed to revitalization of construction sector and it demonstrated in specific figures. The second topic relates to the challenges faced by the developers, in particular - problems with commercial banks and ways to regulate such problems, and the third is about possible conflict of interests in relation to ownership of non-profile assets by banks. It has been a long-lasting concern for other actors on the market; we have carried out huge amount of work in this regard. "We are very close to the solution and by the end of the month we shall make the announcement" - stated the President of the National Bank after the meeting with the developers."
According to Giorgi Kadagidze, the above decision will make sure all risks of the conflict of interest between commercial banks and developer industries are eradicated; therefore, the supervisory instructions for specific actors shall be adopted. "With regards to the size of the market, I have many times stated that non-profile sector is less important, when compared with banking sector; in total it is less than 1 %, but still it is a significant share for these industries. It must be noted that we will make decision not with regards out current state, but with regards to the development direction of total financial and developer sector. We are heading towards universal banking services or classical banking services. Our key task is to establish a clear barrier, so that the depositors' money is not directed to the segments, which are not classical banking operation. In addition, no bank shareholder is restricted from investing into other industries. I believe, this meeting was very interesting in this regard" - stated Giorgi Kadagidze.
With regards to the format of the decision, according to the President of the National Bank, it is likely to be a normative act, which will regulate the subjects under the jurisdiction of the National Bank - i.e. commercial banks.