The organization “Young Barristers”  appeals  to The National Bank of Georgia  for the better control of the commercial banks’ non-core activities.  

According  to the statement of the  “Young Barristers”  lawyer,  Jaba Sirabidze,  the society should be informed of , which banks have to leave non-financial sector and specifically,  what kind of concessions they should make in accordance with new regulations. This information  is closed for the public society  and is available for the relatively small group of people and the obligation of making such information  public,  lies on the National Bank of Georgia.

The  “Young Barristers”  refers to the National Bank of Georgia to inform the society of the steps taken by the  commercial banks in order to  leave non-core activities.  The organization appeals to the President of the National Bank of Georgia, Giorgi Qadagide,  for paying   proper attention to the issue of  investments   in non-financial sector on behalf of the commercial banks. Despite the fact, that , for the moment,  the investments of the banking sector of the country amounts only 2,6% of the assets, from wich the share of non-core investments consists of  only 1%,  yet ,  this data should not increase and it should not hamper business activity of non-financial sector.

The organization has studied the issue and notes, that in the different countries of the world there are different attitudes in  regard of non-financial sector investments on behalf of commercial banks. In most of the countries, ownership of securities and implementation of insurance activities are unrestricted, meaning, commercial banks have legal  right to carry out activities in these field with full spectrum. As for the  bussines activity in the field of real estate, commertial banks are prohibited  to carry out such activities in most countries. Mentioned activity  cannot be implemented neither by commercial banks, nor by their subsidiaries or owner/holdings. In contrast with the experience of the majority of the countries, in Georgia, non-core business activity in the banking field, is legaly permitted activity and banks have right to carry it out by themselves  or by subsidiaries or owner/holdings.

According to the organization’s appraisal , The National Bank’s attitudes ,  that have been worked out in order to overcome financial crisis of 2008-2009, should be reviewed. Despite the fact, that non-core activity of commercial banks has not reached alarming level, yet, for the prevention, it is very important to establish certain restrictions regarding the formation and volume of the investments .  

According to the organization’s  appraisal, it is very important, that commercial banks, involved in non-core  activities for now,  leave  non-financial field gradually, in order to avoid  harming non-financial sector, full rehabilitation of which could not be managed since the war of August, 2008 and the  gobal crisis.