The amount of fines imposed on commercial banks has increased 10 folds.
Aleksandre Dzneladze, head of the Banking Association, says that the amount of fines has been quite large before, but he deeply believes that the process and transparency are more important than the amount.
According to Dzneladze, until now the National Bank has been warning banks before applying sanctions, and Dzneladze hopes that this practice will be maintained.
"A fine of 0.1% of a bank’s regulatory capital was a small penalty. I would also like to note that the transparency of the process is more important than the fine volume. In the previous period, there were practices in this regard, which meant that there was a warning and instruction in advance before a sanction was applied. We hope that this practice will continue and we will continue the discussion on this issue, what could be better," Dzneladze told bm.ge.
The National Bank of Georgia (NBG) has increased the maximum possible fine for commercial banks that fail to comply or inadequately comply with legislative and regulatory requirements.
Under the amendment, the maximum fine has been raised from 0.1% to 1% of a bank’s regulatory capital. As per current practice, the fine amount will be determined based on the severity of the violation, the damage caused to the bank’s assets, and/or the potential risk posed by the infraction.
