Minister of Economy Giorgi Kvirikashvili states that he has question marks with regards to the draft prepared by the Parliament’s Finance Committee that envisages depriving the National Bank of Georgia of its supervisory function of the financial sector.
Kvirikashvili: I have many questions over the draft aimed at depriving NBG of its supervisor function
By Gvantsa Gabekhadze
Friday, June 5
“We are in dialogue with the business sector representatives concerning the issue and our position will be revealed in the course of the process. Personally I have quite many questions towards the authors of the draft,” Kvirikashvili said.
The proposed bill envisages the setting up of the Financial Supervisory Agency from July 1 2015, which will be in charge of monitoring and supervision of banking sector and other financial institutions.
According to the bill, the Financial Supervisory Agency will have a seven-member board; the central bank governor will be an ex-officio member of the board, but will have no right to also serve as a chairperson of the board. Seven other members of the board will be elected by Parliament. Chairperson of the board will have the right to appoint head of the agency.
Two lawmakers from the Georgian Dream parliamentary majority group – Tamaz Mechiauri of the Georgian Dream-Democratic Georgia party and Nodar Ebanoidze of the Republican Party - are the authors of the party.
Metchiauri has stated several times that the leadership of the National Bank of Georgia is still influenced by the previous officials who are currently wanted by the Georgian law-enforcement bodies.
The President and several prominent NGOs are against the amendments.
“We think that there are political reasons. Political games are inadmissible in economy; it will harm the economy,” the President’s Advisor in Economic issues Giorgi Abashishvili said.
According to the joint statement, ten NGOs claim the “hasty decision” will damage the National Bank as an institution and jeopardize the constitutional functions of the National Bank.
“Namely, according to the Constitution of Georgia, the National Bank fosters a stable functioning of the financial sector,” the NGOs said.
The NGOs named several reasons why they oppose the draft: the National Bank was not involved in the preparation process of the draft bill which represents violation of the constitutionally guaranteed independence of the National Bank.
In addition, experts, representatives of business and international organizations were not involved in the preparation of the draft bill which is completely unjustified given its importance;
There is no justification of reasons for depriving the National Bank the financial supervisory function, speed and timing of the initiative raises additional questions;
The presented model of the council formation involves high risks of forming the council based on political affiliations, unlike the council formation rule of the National Bank;
The given decision shall damage the banking sector, but at the same time, shall affect every individual, whoever has any type of relation with the banking sector, i.e. every citizen of Georgia. Besides, it shall have a very negative parallel effect on the investment environment and the business image of the country, hence on the overall economic development of the country.
Former head of the National Bank Roman Gotsiridze believes that this is an attempt at controlling the commercial sector.
“The whole business sector is alarmed due to these potential amendments,” Gotsiridze says.
Head of TBC Bank Mamuka Khazaradze stresses that he is against of the separation of the supervision function from the National Bank.