Resolution Instruments

    The National Bank is authorized to use the following resolution tools:

     

    • Merger of a bank in resolution with another commercial bank, provided there is adequate commercial interest in the market and in view of maintaining financial stability as a result of the transaction.

     

    • Disposal of shares, assets and/or liabilities of a commercial bank, which means full or partial transfer of the shares, assets and/or liabilities of the commercial bank in resolution to a buyer (except temporary bank).

     

    • Transfer of shares, assets and/or liabilities of a commercial bank to a temporary bank, which means full or partial transfer of shares, assets and/or liabilities of the commercial bank to the temporary bank (state owned) in order to maintain critical functions. For this purpose, the Ministry of Finance of Georgia establishes a temporary bank with the intention of alienating it for a specified period of time in market price.

     

    • An option to recapitalize a commercial bank by issuing new shares, which empowers the National Bank to decide on the issuance and sale of new shares by this bank to increase the regulatory capital of a commercial bank in resolution and safeguard its sound operation.

     

    • An option to recapitalize a commercial bank by bail-in, by which the National Bank uses its authority to replenish the bank’s regulatory capital through reasonable financial restructuring, and bailing-in of a commercial bank in resolution.

     

    The decision on the resolution tool is made by the Resolution Committee of the National Bank, which specifies the grounds and conditions for the use of the resolution tool.