Licensing Requirements
Those interested in obtaining a license for the activities of the microbank must apply to the National Bank of Georgia and provide the relevant information/documentation as defined by law. The following legal acts define the requirements related to licensing:
The regulatory capital of a microbank is determined at 10 (ten) million GEL “On Setting the Level of Minimum Regulatory Capital for Microbanks" of the Governor of National Bank of Georgia Decree No. 114/04 dated June 21, 2023.
One of the main aspects of the evaluation process is to assess the adequacy, feasibility, and potential position of the license applicant's business plan in the banking sector.
The business plan should include:
(For the details about information/documentation to be presented, see Article 5 of the Law of Georgia on Activities of Microbanks and Article 2 of the ‘’Rules on Licensing Microbanks” approved by Decree of the Governor of the National Bank of Georgia N105/04 June 21, 2023).
The licensing application must include information/documentation regarding the acquisition of a significant share as defined by the legal act of the National Bank and the information/documentation specified in Paragraph 3, Article 5 of the Law of Georgia on Activities of Microbanks, regarding the significant shareholder as both a shareholder and an intermediate owner and beneficial owner, and in the absence of such, identification information about the 20 largest shareholders and information about the amount and type of shares held by them. (For detailed information on fit and proper requirements, see the ‘’Regulation on the Acquisition of Significant Shares in Microbank” approved by Decree of the Governor of the National Bank of Georgia N106/04 dated June 21, 2023; Chapter III of the Law of Georgia on Activities of Microbanks and Article 2 of the ’’Rules on Licensing Microbanks” approved by Decree of the Governor of the National Bank of Georgia N105/04 June 21, 2023).
Administrators (members of the supervisory board, directors, and other individuals who have direct or indirect authority and responsibility for planning, managing, and/or controlling the activities of the microbank) must meet both individual and collective suitability requirements. (For detailed information on suitability requirements, see the ‘’Regulation on Fit and Proper Criteria for Microbank Administrators" approved by Decree of the Governor of the National Bank of Georgia №119/04 dated June 21, 2023; Chapter II of the Law of Georgia on Activities of Microbanks and Article 2 of the ’’Rules on Licensing Microbanks” approved by Decree of the Governor of the National Bank of Georgia N105/04 June 21, 2023).
The structure of the group of the license applicant for microbanking, ownership structure, management structure, and operational activities/environment must be transparent, comply with appropriate corporate governance standards, ensure the possibility of effective individual or consolidated supervision, and should not pose a threat to the stability and healthy functioning of the microbank and/or the financial sector.
The information submitted for obtaining a microbank activity license must include information (data) about the structure of the group/ownership of the applicant for the microbank activity license, including the significant shareholder as both a shareholder and an intermediate owner and beneficial owner (For the details of information/documentation to be presented, see Article 5 of the Law of Georgia on Activities of Microbanks and Article 2 of the ’’Rules on Licensing Microbanks” approved by Decree of the Governor of the National Bank of Georgia N105/04 June 21, 2023).
The National Bank assesses the license applicant's ability for sustainable functioning, for which it considers, among other things:
(For the details of information/documentation to be presented, see Article 5 of the Law of Georgia on Activities of Microbanks and Article 2 of the ’’Rules on Licensing Microbanks” approved by Decree of the Governor of the National Bank of Georgia N105/04 June 21, 2023).
The licensing fee is 100,000 GEL (according to the Law of Georgia on License and Permission Fees).
The National Bank is authorized to conduct relevant consultations with the applicant for the microbank license before receiving a written request for the permit; the purpose of preliminary consultations is to provide interested parties with a comprehensive understanding of the process and the requirements to be met.
The National Bank will review the documentation and information submitted for obtaining a microbank license within six months from the date of receipt of confirmation regarding the complete written request.
The National Bank will inform the interested party in writing about the approval of the license issuance, or if the applicant does not meet the licensing requirements established by Georgian legislation, a reasoned refusal.
To decide on issuing a microbank license, the National Bank will examine the compliance of the submitted documentation and information with the requirements established by Georgian legislation, including assessing the adequacy and feasibility of the business plan of the microbank license applicant, its potential position in the banking sector, and its ability to function sustainably.
In addition, during the review period of the documentation and information submitted for obtaining a microbank license, the National Bank has the right to request any other additional information necessary for making a reasoned decision in a specific case within its authority.
(For detailed information regarding the decision-making process for issuing a microbank activity license, see Article 6 of the Law of Georgia on Activities of Microbanks and Article 3 of the ’’Rules on Licensing Microbanks” approved by Decree of the Governor of the National Bank of Georgia N105/04 June 21, 2023).
In case of questions regarding the licensing of microbank activities, interested parties can contact the National Bank at the following email address: BankingLicense@nbg.gov.ge.