National Bank should regain its supervisory role

Georgia’s Minister of Finance, Dimitri Kumsishvili, stated that the National Bank of Georgia had to regain its supervisory role over other financial institutions in Georgia, a role which was deprived of by the Georgian Dream leadership in 2015.

“We have presented a bill of 17 laws, according to which the supervision of the financial sector will return to the National Bank,” Kumsishvili stated, and explained this was because of the current economic policy of the Georgian Dream authorities.

“I also want to say that we are very active in the process of negotiations with the International Monetary Fund (IMF), which considers this decision very important and positive," said Kumsishvili.

Georgia’s Parliament passed a bill envisaging the banking supervisory function to be removed from the country’s National Bank in July 2015.

The bill saw the NBG be deprived of its banking monitoring service; this function would be transferred to a separate agency, which would be the solo body to supervise banking in the country.

The bill also defined the rules of setting up such an agency, which would be called Georgia’s Financial Monitoring Agency.

The bill was strongly criticized by the opposition, civil sector and international experts.

Many in Georgia stated that the step was targeted against then chairperson of the National Bank Giorgi Kadagidze.

Some members of the ruling majority, including one of the authors of the bill, Tamaz Metchiauri, directly accused Kadagidze of taking steps that devaluated the national currency against the USD. (However, after Kadagidze left the post, the lari further devaluated and reached a record level of depreciation under the a new leadership).

The United National Movement and Free Democrats opposition parties applied to the Constitutional Court against the bill in September 2015.

The Court suspended the work of the Financial Supervision Agency in October the same year, pending their final verdict on the issue.

If Parliament now returns the function to the NGB, there would be no need of delivering the verdict.

Member of the United National Movement opposition and ex-head of the National Bank, Roman Gotsiridze, stated that the Georgian Dream’s solution in 2015 over the function “very seriously affected” the country, as Georgia was subsequently unable to receive grants and financial support worth millions from the IMF.

Gotsiridze stated that the Georgian Dream party was attempting to “control” the financial sector.

Georgian Dream representative Roman Kakulia admitted the earlier decision “wasn’t right” but said the solution didn’t bring any genuine negative consequences for the state economy.

Making such decisions and changing laws without achieving positive results causes serious question marks over the competence of some members of the ruling team.

The country is currently facing hard times and opponents of ruling party are using every single moment to put all the blames on the Georgian Dream coalition.