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Banks Extend the Repayment Terms of Loans to Customers

Amid  the devaluation of the national currency, the Georgian banks announce the introduction of favorable payment terms.

According to the CEO of “TBC Bank” Vakhtang Butskhrikidze, on the basis of individual analysis, in each case a new loan repayment schedule will be developed, which will be adapted to the real situation.

“This decision was taken in relation to customers who have loans in dollars, and incomes in the GEL. The good news is that most consumer loans are taken in the national currency, and this greatly simplifies the situation. The problems mainly relate to mortgages, which are usually denominated in dollars, while borrowers have mainly income in the GEL. During the meeting with the President of the National Bank, we have come to a consensus that each case will be examined individually, and decisions will be made depending on the particular situation. We’ll  try to adapt new graphics of covering  debts to the new realities, “- says the banker.

In his words, we are not talking  about lowering interest rates on loans.

“Bank of Georgia” has already announced its intention to propose a new payment schedule for borrowers whose loans are taken in dollars, and incomes in GEL.

According to the President  of the Association of Banks of Georgia  Zurab Gvasalia, 80% of loans granted to individuals are issued  in local currency. The devaluation of the GEL affects about 20% of borrowers who receive income in GEL and cover a credit debt in dollars – their loans have risen in line with the devaluation of the national currency – by 30%.

“It is possible that banks will hold individual consultations with each of these customers in order to extend the deadline for the payment of loans, or to carry out restructuring, so that clients can repay their loans. The bank itself will not seek contact with this kind of clients – if they want to ease the repayment schedule, they must turn to banks at their request. The bank cannot take any decision on its own initiative, as sometimes happens that the extension of the loan repayment harms  the clients themselves, “- President of the Association notes.