The National Bank of Georgia (NBG) says proposed amendments to the Law on Commercial Bank Activities aim to encourage reputable foreign banks to enter the Georgian market by simplifying their licensing procedures and strengthening competition.
In a written response to BMG, the NBG said the changes were developed based on international experience and practical needs, with the goal of attracting new banks and international financial institutions.
The legislative package was submitted to Parliament on November 3. Under the proposed amendments, foreign banks operating in countries considered trustworthy and holding credit ratings acceptable to the NBG would be eligible for simplified licensing procedures to establish branches or subsidiaries in Georgia.
However, credit ratings alone will not be sufficient. Banks will also need to demonstrate a strong reputation, international recognition, extensive experience, stable financial performance and transparent ownership structures.
The amendments would also expand the definition of a “reputable foreign bank,” giving the NBG authority to establish criteria for identifying trustworthy countries. Within 12 months of the law's entry into force, the regulator will define the relevant country criteria, acceptable international rating agencies and minimum credit rating requirements.
The proposed changes would also simplify documentation requirements for foreign banks applying for licenses and clarify capital requirements.
According to the NBG, the amendments will diversify the country's banking sector, attract reputable international financial institutions and strengthen competition in the Georgian market.
The concept of a reputable foreign bank has existed in Georgian legislation since 2017, but the new initiative seeks to make it easier for such institutions to establish branches or subsidiaries in the country.
