The National Bank of Georgia and the Ministry of Finance have the right to establish a " Bridge Bank". According to a document published by the International Monetary Fund (IMF), the main function of a bridge bank is to operate a failed bank, which is insolvency.
The IMF notes that Georgia adopted new legislation on commercial banks (their insolvency) in 2019, although various issues and regulations remain to be worked on. These include the rules and procedures for operating the “Bridge Banks”.
"In the process of the resolution of the banks, it may be necessary to create a temporary bank (Bridge Bank), for the operation of which there is no framework yet. With this in mind, FSAP calls on the government to develop an operational framework for the intermediary bank, including its licensing rules, the rules for establishing a supervisory board and obtaining financing, ”the document reads.
According to the IMF report, it is important that the government to develop new rules for the regulation of temporary banks within 1 year.
According to the 2020 decree of the President of the National Bank, the Ministry of Finance has the right to establish a temporary bank and obtain a license for it.
