President of the National Bank of Georgia (NBG), Natia Turnava, acknowledged the high level of concentration in Georgia’s financial market during her annual report presentation to Parliament. Responding to a question from MP Shota Berekashvili, Turnava emphasized that while market dominance by leading banks is a historical reality, it is not unique to Georgia and exists in many developed economies as well.
“Our financial market is highly concentrated. This is a historical fact. We have dominant banks and also smaller, but stable and important players. This kind of asymmetry is not unusual - similar structures exist in European markets, where systemic banks play a central role,” Turnava noted.
She stressed that strengthening competition remains a strategic challenge and outlined several steps the NBG is taking to address it:
Technical Assistance from the World Bank: The NBG has partnered with the World Bank to review regulatory frameworks and study international best practices to identify areas for improvement.
Establishment of a Competition Department: A dedicated department has been created within the NBG to handle potential competition violations and support market oversight.
Support for New Market Entrants: Turnava highlighted the importance of welcoming new financial entities - including traditional banks, digital banks, microbanks, fintechs, and payment service providers - to reduce transaction fees and broaden consumer options.
Attracting Foreign Banks: She noted ongoing efforts to increase Georgia’s appeal to large international banks. “Our strong and transparent banking system already operates beyond Georgia’s borders, and we are optimistic that foreign interest in entering our market will grow. This will further enhance competition,” Turnava stated.
She concluded that a more competitive environment is key to lowering interest rates and improving financial services across the board.
