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National Bank to Enforce New Loan Regulations Ahead of Schedule

Revised loan coefficients will be specified at the next meeting of National Bank of Georgia on November 21. Under new regulations, borrowers are to have higher salaries for taking loans.

Monthly Net Incomes in GEL

Loan Service Coefficient – Maximum Indicator for Nonhedged Borrowers

Lona Service Coefficient – Maximum indicator for hedged borrowers

<=1,000

20%

20%

1,000-3,000

20%

25%

3,000-5,000

20%

30%

5,000-7,000

25%

40%

7,000-10,000

30%

50%

If the borrower’s/coborrower’s net monthly incomes exceed 10 000 GEL, the loan service coefficient may be determined due to inhouse policy-procedures of the crediting organizations, but this should not cause excessive indebtedness of a borrower/coborrower.

Stability coefficient of the Georgian finance sector is high, no deterioration risks are outlined, but coefficients are submitted 2 months earlier. Koba Gvenetadze noted.

Maximum indicator for loan guarantee coefficient for foreign currency denominated loans

70%

Maximum indicator for loan guarantee coefficient for GEL-denominated loans

85%

Maximum indicator for loan guarantee coefficient for loans, when borrowers’ insolvency is not examined.

50%


Objective of the new
regulations is to protect borrowers for excessive burden.

Ahead of schedule enforcement of the new regulations has disoriented even the banking sector.

Under the new regulations, customers cannot take agro , tourism and other loans without submission of business purpose”, representatives of LOBBY microfinance organization noted.