Non-banking business of banks
By Messenger Staff
Wednesday, Febraury 19Some economic analysts have recently initiated that banks should be deprived of the right to run non-banking businesses. For example, the banks should not be involved in real estate business or any other activities not connected with banking.
Apart from insurance businesses, or brokerage companies, banks should not have the right to run other businesses as well.
During the previous Georgian administration, banks were given the right to participate in non-banking activities. This is a practice that is forbidden in Western countries. This position has been challenged by the banking sector representatives.
For instance, Director General of the Bank of Georgia, Irakli Gilauri thinks that possessing non-profile assets will not create any threat to other companies and any additional regulations will have a negative impact on the welfare of the population.
This could be supported by the prices of the real estate where the banks have much advantage to assist the population while purchasing the real estate.