The Bureau of the Parliament of Georgia was presented draft amendments to the Organic Law of Georgia on the National Bank of Georgia, which envisages depriving the National Bank of Georgia the supervisory function of the financial sector.
We believe that this is a hasty decision and damages the National Bank as an institution; the decision jeopardizes the constitutional functions of the National Bank. Namely, according to the Constitution of Georgia, “the National Bank fosters stable functioning of the financial sector”.
At the same time, given that last year, the National Bank was deprived of the financial monitoring function, we believe that the current initiative shall hamper the National Bank to exercise its main function fully.
Moreover, the grounding of this initiative is unclear against the background when notwithstanding the war in 2008, Russian embargo, international crisis or economic problems, the banking sector of Georgia maintains its stability and trust in the society. The joint mission of the International Monetary Fund (IMF) and the World Bank positively assess the policy undertaken by the National Bank, among them the system and works undertaken in the direction of banking supervision.
The representatives of the Georgian business sector have already expressed their opinion in regards to the draft bill and highlighted the threats that this initiative might impose.
The undersigned non-governmental organizations would like to join the practically unprecedented unanimous position of the business sector representatives and additionally underline the following:
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;
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 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.
Coming from the abovementioned, we believe that the government should comprehend the risks related to the given draft bill, restrain itself from politicizing the process and from weakening the National Bank as an institution.
Transparency International Georgia
Economic Policy Research Center (EPRC)
Open Society Georgia Foundation (OSGF)
Civil Development Agency (CiDA)
Society and Banks
Georgia’s Reforms Associates (GRASS)
Georgian Farmers’ Association
Institute for Development of Freedom of Information (IDFI)
Centre for Strategic Research and Development (CSRDG)
Export Development Association
Atlantic Council of Georgia