The capital requirements for the Georgian banking sector are based on the Basel III standard, Regulation 575/2013 of 26 June 2013 and Directive 2013/36/EU of the European Parliament and of the Council (CRR-CRD package).
The minimum capital requirements are defined in the Regulations on Capital Adequacy Requirements for Commercial Banks, which says that, under Pillar 1, the minimum requirements are defined as follows:
Additionally, commercial banks are required to have a combined capital buffer consisting of a capital conservation buffer (up to 2.5%), a countercyclical buffer (within 0-2.5%), and a systemic buffer.
Under Pillar 2, additional capital buffers are set for banks for risks not covered by the Pillar 1 requirements stipulated in the Regulation on Capital Adequacy Requirements for Commercial Banks. This is regulated under the Rule on Additional Capital Buffer Requirements for Commercial Banks within Pillar 2. Pillar 2 requirements include the following buffers:
Under Pillar 3, commercial banks are subject to disclosure requirements which are meant to strengthen market discipline.