“The separation of banking and non-banking activities is a necessity, banks must regain their position of business partners and not competitors,” Tornike Abuladze, a member of the Developers Association and general manager of the construction company Arci said.
According to him, despite the fact that in August 2014 the National Bank ordered financial institutions to get rid of non-core assets, actually it did not happen.
“The separation of banks and non-core activities was purely legal and formal but only on paper. In reality, the problem has not been resolved, though the first necessary steps have been taken. It should be assessed as a process rather than as a one-off action,”Tornike Abuladze notes.
In his words, the National Bank’s decision can serve as the basis for further steps to separate banks and non-core assets.
“In Georgia, there is a fairly strong banking system and businesses resort to its services when they need funding. But they fear that the bank which gave them a loan, tomorrow may become their competitor, since many banks own companies working in various sectors, including development. Thus, every businessman fears the bank will create artificial obstacles in obtaining loans, and eventually will become a competitor. This prevents the development of business in the country, “Abuladze added.
He notes that there is a paradoxical situation in the country – the banks do not know where to invest money, and businessmen are afraid to turn to banks for loans.
“We, as a company, have grown along with ” Bank of Georgia ” and have carried out many projects in cooperation with the Bank. But at some point, we saw that it turned into our competitor. Today we are competitors, not partners. Once everyting returns to its place, and we again become partners, we will have much more opportunities that will have a positive impact on the country as a whole,”- the head of the construction company points out .