Changes In Lending Rules Will Slow Down Individuals’ Borrowing - Liberty Bank

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29.Mar .2022 16:00

Changes In Lending Rules Will Slow Down Individuals’ Borrowing - Liberty Bank

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Author:Natia Taktakishvili

The National Bank of Georgia changes the rules for issuing consumer and mortgage loans. Namely, if 25% requirement of the loan service ratio is applied to persons with income up to GEL 1000 earlier, now this limit will be increased to GEL 1500.

Liberty Bank CEO Vasil Khodeli declares that after the regulation takes effect on April 1, lending to individuals will be reduced. According to him, the changes will affect the banking sector as a whole.

"The new regulation of the National Bank will slow down lending to individuals in the country. The regulator considers that lending must not grow faster than the economy and especially against the background of the revised economic growth forecast. So, the regulator is trying to insure itself, "said Vasil Khodeli, CEO of Liberty Bank.

In addition, from May 1, changes will be included in the rules for issuing mortgage loans. Under the new terms, banks will have to take into account the probability of a credit interest rate shock when assessing the borrower's solvency, which will be set at 3 percentage points.

Liberty Bank lending regulations mortgage loans NBG Vasil Khodeli