The Loan Issuing Entity submitted the initial registration form to the Financial Monitoring Service late. The Loan Issuing Entity, LTD " Laqi Group" (I/N 406269675), was registered as a loan issuing entity at the National Bank of Georgia on February 26, 2019. According to Article 1, Paragraph 2 of Order No. 1, issued by the Head of the Financial Monitoring Service of Georgia on June 5, 2020, titled “On the Approval of the Rules for Record-Keeping, Storage, and Submission of Information on Transactions by Obligated Entities to the Financial Monitoring Service of Georgia,” any obligated entity that started operations before the implementation of this order was required to submit the completed registration form to the Financial Monitoring Service of Georgia no later than one month after the order’s implementation. The obligated entity was supposed to submit the appropriate registration form to the Financial Monitoring Service of Georgia by November 20, 2020; however, the Loan Issuing Entity submitted the initial registration form on January 20, 2021. As a result, it is determined that the Loan Issuing Entity, LTD " Laqi Group"," submitted the registration form late. According to Article 2¹, Paragraph 2, Sub-paragraph "A" of the "Rules for Determining, Imposing, and Enforcing the Amount of Monetary Fines for Loan Issuing Entities," approved by Order No. 218/04 of the President of the National Bank of Georgia, dated September 27, 2018, which provides for a monetary fine of - 5,000 (five thousand ) GEL;

During the inspection process, the Loan Issuing Entity submitted information/documentation related to each clause of the agreement signed during the audit period to the National Bank incorrectly or with delays in 7 (seven) instances. This is in violation of Article 21, Paragraph 3, Sub-paragraph "N" of the "Rules for Determining, Imposing, and Enforcing the Amount of Monetary Fines for Loan Issuing Entities," approved by Order No. 218/04 of the President of the National Bank of Georgia, dated September 27, 2018, which provides for a fine of 2,000 (two thousand) GEL for each case of late or incorrect submission of the required information/documentation. As a result, the total fine amounts to 14,000 (fourteen thousand) GEL.

The assignment or reassessment of a risk level to a client by the Loan Issuing Entity without taking into account the relevant risk factors determined by Georgian legislation, including the legal acts of the National Bank of Georgia on risk assessment, and/or the internal policies/procedures of the Loan Issuing Entity, constitutes a violation. Specifically, One (1) instances of such improper risk assignment/reassessment were identified. According to Article 21, Paragraph 3, Sub-paragraph "v" of the "Rules for Determining, Imposing, and Enforcing Monetary Fines for Loan Issuing Entities," approved by Order No. 218/04 of the President of the National Bank of Georgia, dated September 27, 2018, each such violation entails a monetary fine of 2,000 (two thousand) GEL.

The electronic system implemented in the lending institution operates with significant flaws. Specifically, it lacks the functionality to detect suspicious or noteworthy signs, including the identification of fragmented transactions (deals), and cannot automatically verify individuals against the lists of sanctioned persons as required by the United Nations Security Council resolutions, as well as the instructions provided by the National Bank. This includes the automatic checking of persons against the sanctions regime defined by the UN and the National Bank. This is in violation of the Georgian National Bank's President's Decree No. 218/04 dated September 27, 2018, which approved the "Procedure for Determining, Imposing, and Enforcing Fines for Lending Institutions", specifically under Article 21, paragraph 2, subparagraph "e," which provides for a monetary fine of 15,000 (fifteen thousand) GEL

The lending institution has identified a lack of information regarding the purpose and intended nature of business relationships with four (4) clients. This is in violation of the Georgian National Bank's President's Decree No. 218/04 dated September 27, 2018, which approved the "Procedure for Determining, Imposing, and Enforcing Fines for Lending Institutions," specifically under Article 21, paragraph 3, subparagraph "t," which stipulates a fine of 2,000 (two thousand) GEL for each client, totaling 8,000 (eight thousand) GEL for all four clients.

The internal control policy/procedure developed by the lending institution does not meet the requirements set by legislation (as well as the guidelines of the National Bank), which is in violation of the Georgian National Bank's President's Decree No. 218/04 dated September 27, 2018, which approved the "Procedure for Determining, Imposing, and Enforcing Fines for Lending Institutions," specifically under Article 21, paragraph 3, subparagraph "i," which stipulates a fine of 5,000 (five thousand) GEL.

At the time of the inspection process as specified by the legal act of the National Bank, one client had not been assigned a risk level, which is in violation of the Georgian National Bank's President's Decree No. 218/04 dated September 27, 2018, which approved the "Procedure for Determining, Imposing, and Enforcing Fines for Lending Institutions," specifically under Article 21, paragraph 3, subparagraph "g," which stipulates a fine of 2,000 (two thousand) GEL.

In total, the Loan Issuing Entity “Laqi Group” LTD (I/N 406269675) was fined 51,000 (Fifty-one thousand) GEL.