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National Bank: Current Minimum Capital Requirement is One of the Lowest One Worldwide

National Bank of Georgia (NBG) plans to revise the NBG decree on Determination of Minimum Capital Amount for commercial Banks.

According to the 2016 annual report, minimum supervisory capital requirements for legal entities seeking a banking license and licensed commercial banks makes up 50 million GEL. Timeframes will be introduced for fulfilling the mentioned requirements for licensed commercial banks. This period will comprise 3 stages:

“Minimum supervisory capital requirement must be at last 30 million GEL as of December 31, 2017, at least 40 million GEL as of June 30, 2018 and at least 50 million GEL as of December 31, 2018.

Objective of these changes is to restrict motivation for growth in risks in low-capitalization  banks and strengthen their financial stability. It should be noted that the existing minimum capital requirements is one of the lowest worldwide and it doesn’t correspond to development level of the country and its financial sector”, the report reads.