"The National Bank has not made any financial transfers to the government", - this is how the National Bank of Georgia (NBG) responded to questions from BMG regarding the recent recommendation issued by the International Monetary Fund (IMF).
The IMF has called on the National Bank to limit its authority to make discretionary financial transfers to the government. Such transfers refer to financial allocations made by the National Bank to the state based on its own decision, not to be confused with the mandatory transfer of a portion of annual profits to the state budget. The latter is governed by Article 25 of the Organic Law on the National Bank of Georgia, which regulates the distribution of the Bank’s net profit.
In 2023, for instance, the NBG had a profit of 559 million GEL, of which 303 million GEL was transferred to the state budget, and 256 million GEL was retained. In 2024, from a net profit of 1.1 billion GEL, 670 million GEL was transferred to the budget, while 434 million GEL was allocated to the Bank’s reserve fund.
The IMF recommendation specifically concerns Article 22, Paragraph 3 of the Organic Law, which states that “in order to ensure the stability and transparency of the financial system, as well as to promote sustainable economic growth in the country, the Board of the National Bank is authorized to make a decision on the distribution of funds in the Reserve Fund.” This provision grants the NBG the legal authority to make discretionary transfers from the reserve fund, even though such transfers have not been made in practice.
The National Bank explained to BMG that the IMF’s recommendation aims to eliminate even the possibility of such discretionary transfers in order to strengthen the Bank’s financial independence and transparency. Analysts suggest that this step reflects broader concerns regarding the independence of the NBG and aims to mitigate potential risks.
Additionally, the NBG noted that, according to their information, work is already underway to develop legislative amendments that would implement the IMF’s recommendation. However, the Bank itself does not have the authority to initiate such legal changes; that responsibility lies with the Parliament or the Government.
