The requirements related to the licensing of commercial banks, the suitability of administrators and shareholders, have been refined as a result of the amendments made in the Law of Georgia on the Activities of Commercial Banks in September 2022. Now these are in full compliance with the Directive of EU on access to the activity of credit institutions and the prudential supervision of credit institutions and investment firms (CRD). The compliance of the Georgian legislation with said Directive is important both for Georgia's accession to the Single Euro Payment Area (SEPA) and for serving its commitments under the Association Agreement between the European Union and Georgia. The changes will come into force on November 1, 2022.

 

The next step is to amend the legal acts of the National Bank of Georgia to ensure their compliance with updated legal requirements and European standards, for which a deadline of November 1, 2022 was set for the National Bank of Georgia.

 

To ensure compliance with this commitment and to refine its legal acts, the National Bank of Georgia is planning to approve the updated Regulations on the Licensing of Commercial Banks and the Suitability of Administrators, and the new Regulation on the Acquisition of a Significant Share.  The NBG offers the draft legal acts  to the sector for consultation to allow stakeholders to provide their opinion and comments.

The issues included in the draft legal acts are based on the CRD Directive and the joint guidelines of the European Banking Authority and the European Securities and Markets Authority on Prudential Assessment of the prudential assessment of acquisitions of qualifying holdings and Assessment of the Suitability of Members of the Management Body. The current legislation of Georgia provided for the main requirements defined by the Directive until now. As the changes are enacted, both the law and the regulations will be fully compliant with the Directive and the standards defined by the European Banking Authority. This, in turn, improves the requirements and provides greater transparency of the assessment process..

 

The process of analyzing and identifying the need for amendments was guided by the experts of the Polish Financial Supervision Authority (UKNF) who provided expert assistance to the National Bank of Georgia within the framework of the EU-supported project – Strengthening the National Bank of Georgia in the Field of Banking and Payment Services  (twinning).

 

The drafts of the legal acts are published on the NBG website for consultation and stakeholder feedback. Suggestions, comments and questions can be sent to policy@nbg.gov.ge  through October 20, 2022.