The Minimum Supervisory Capital For Commercial Banks Has Been Raised

The Minimum Supervisory Capital For Commercial Banks Has Been Raised

By the decree of the President of National Bank of Georgia, the minimum supervisory capital requirement for commercial banks has been raised from current 12 mln GEL to 50 mln GEL.

Representatives of NBG explained that the aim of this change is to limit motivation of increasing risks for banks with low capitalization and encouraging financially stable institutions to enter the system, which should facilitate strengthening of the financial stability of banking system in Georgia. As it was stated by NBG, current requirement for minimum supervisory capital is one of the lowest in the world and does not correspond to the development level of the country and its financial sector.

According to the new decree, minimum supervisory capital of legal entities, intending to get a license for banking activities, should be 50 mln GEL. For commercial banks already licensed in Georgia before issuance of the decree, deadlines have been set to fulfil the above requirement in three stages, according to which minimum supervisory capital should make at least 30 mln GEL by 31st of December 2017, 40 mln GEL by 30th of June 2018 and 50 mln GEL by 31st of December 2018.

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