The new banking regulations did not take effect on November 1. The announced regulations will be simplified and currently, technical details are being specified, the National Bank of Georgia (NBG) noted.
The new regulations will be enforced no later than November 15.
“Over the past week active consultations were held over the retail crediting draft provision at the NBG with representatives of the finance sector, experts and the field specialists.
The working version of the revised provision reflects almost all key technical remarks outlined by the NBG. At the same time, key principles of the regulation remain unchanged. At this stage, consultations proceed for specification and simplification of distinct articles and paragraphs. Since the document was subjected to essential technical changes, the revised document will be submitted to the finance organizations as soon as possible. At the same time, finance organisations will be given several days for exploring the amendments and adjusting their own inhouse procedures to the new regulations”, the NBG statement reads.
The NBG does not unveil what circumstances have inspired the NBG to postpone an enforcement of the new regulations, how the new regulations will be simplified and whether the banking sector was involved in the process.
Aleksandre Dzneladze, head of the Association of Banks, says that there are multi-faceted reasons behind the mentioned postponement. Comprehensive information was supplied to the NBG, economic team of the Government and all parties about negative impact of new regulations, he added.
“In truth, continuous working process was carried out by the National Bank, the parliament’s committee for finance and budget issues and the Business Ombudsman. We have discussed the existing expectations and how the enforcement of the initial edition of the regulations would influence economy and crediting portfolio. It turned out that the real results would be essentially different from the NBG expectations”, Dzneladze noted.
As to how the regulations will be simplified, Dzneladze noted that it is untimely to talk about this. It is important that consultations continue and both commercial banks and Association of Bank have engaged in the process.
In response to the question, whether the postponement signifies that the government and NBG have made concession, Dzneladze pointed out that the NBG has taken significant decision on behalf of the business sector. “Consultations will be continued and in the working process we will unveil additional details”, Dzneladze said.
The president of Association of Banks could not specify how long the banking regulations would be postponed.
Roman Kakulia, head of the parliament’s sectoral economy committee, does not have information which articles will be specified and simplified by the NBG, but he expressed suppositions that the new regulations were postponed based on the business sector’s remarks.