The National Bank of Georgia has developed amendments to the Conflict of Interest Regulation and published it for discussion. The effort is based the NBG’s supervisory strategy and serves the goal to improve the standards of control and management by commercial banks.

The draft is based on international practice (IAS 24, London listing Rules) and aims to correct the deficiencies identified in the financial sector and mitigate the risks in this area.

The amendments concern different aspects of the regulation. The definition of a related party now includes the requirement for these parties to be identified on the list of related parties and, in some cases, to keep parties concerned on the list of related parties for a period of 12 months. The amendments also include general requirements related to collateral; the banks now need to keep a list of permissible collaterals for creating a risk position with related parties, and the to assess/document the compliance of these collaterals with the requirements of the regulation.

 

The NBG maintained active communication with commercial banks when working on the draft. Commercial banks will be given 6 months to align their policies/procedures with the requirements of the decree, and certain requirements will become effective immediately after the order goes into effect.

The draft of amendments to the Conflict of Interest Regulation is published on the website of the National Bank of Georgia for discussion and stakeholder feedback. Proposals and questions can be sent to the e-mail - corporategovernance@nbg.gov.ge before June 25 of the current year.