National Bank Supervisory Reforms
The goal of the supervisory reforms implemented by the National Bank in 2017-2021 is to promote the stable and efficient functioning of the financial system, to create a competitive environment while reducing risks. As evidenced from the reforms carried out, the rights of consumers and investors have been better protected, the financial stability and transparency of the financial sector have been significantly improved.
The National Bank maintains a dynamic ongoing communication with market participants and stakeholders to foster the safe and smooth implementation of the reforms. The National Bank will continue to introduce international best practices and improve supervisory policies in the coming years.
Supervisory reform encompasses the following areas:
The National Bank of Georgia defined the annual effective interest rate and the financial costs, and approved a Regulation for the calculation of the effective interest rate. Along with other violations, it introduces special penalties for violations of the "Protection of Consumer Rights while Rendering Services by Financial Institutions".
In 2016, the Georgian Government and the National Bank of Georgia jointly developed the Georgian Capital Markets Development Strategy that has eventually become a platform of several important amendments in terms of securities market supervision. The capital market regulatory framework reform and its allignement to the IOSCO principles and pertinent EU Directives (as defined under the DCFTA agreement) was listed as one of the main pillars of the strategy. During 2018-2021 NBG, in cooperation with the government of Georgia, undertook substantial steps forward to accomplish "first generation reforms". These recent reforms facilitated the process of acquiring IOSCO membership. Consequently the National Bank Georgia achieved one of the most important milestones - became an Ordinary Member and thus the MMoU signatory of IOSCO in August 2021.
In 2018-2021 NBG fundamentally renewed capital market regulatory framework and started implementation of supervisory program for capital market-regulated entities (investment firms, asset management companies, investment funds, registrar, public issuers, GCSD/GSE)
Investment Firms (Brokerage Companies)
Investment Funds and Pension Scheme (pillar II)
Market Infrastructure (GSE/Registrars)
Further Capital Market Legislative and Regulatory / Supervisory Amendments are Underway and Include the Following:
The risk-based AML supervision was a consequence of the gradual and progressive actions of the National Bank of Georgia. These Developments have significantly contributed to the effectiveness of the banking and non-banking supervisory process.
The following guidelines were developed and updated during the 2019 year: