Page 31 - GEORptAug18

Georgian central bank to up minimum regulatory capital requirement fourfold
Last week, the head of the Iran-Georgia Joint Chamber of Commerce, Sayedeh Fatemeh Moghimi, said of the blocking of some accounts held by Iranians in Georgia : "We have looked into this issue but [the banks] have responded vaguely." Many cases were related to resettlement and migration cases under investigation, while some were connected with sanctions the US is lining up against Iran, Moghimi said.
The Iranian daily reported that TBC has said that Iranian passport holders who fail to meet the new stringent rules will be barred from interacting with the bank. The new rules, however, do not seem to respond directly to the impending US sanctions aimed at Iran and traders and investors that choose to preserve commercial relationships in the country.
The TBC directive reportedly states that Iranian nationals holding a written contract or official purchase agreement are allowed to make deposits and purchase property and pay mortgages in Georgia.
The Georgian central bank will gradually increase the minimum capital requirement for lenders from GEL12mn (€4.5mn) to GEL50mn by the end of 2018, the regulator announced on May 5. The reason for the move is to strengthen the financial sector and prevent institutions with insufficient capitalisation from entering it.
The increase will be implemented in three stages. Banks will be asked to increase their regulatory capital to GEL30mn by end-2017, to GEL40mn by June 2018 and by GEL50mn by end-2018.
The decision will likely affect small lenders, and may result in increased activity on the Georgian Stock Exchange, with banks seeking to raise financing by issuing debt.
8.1.5 Bank card payment system
Officials discuss linking bank card systems of Iran and Georgia but US restrictions may be in the way
Iranian and Georgian officials have discussed connecting their countries’ digital bank card payment systems, Banker magazine reported on June 26. When it comes to Georgia’s foreign arrivals figures, the Iranians feature prominently. Several flights run by both Iranian and Georgian airlines connect Georgia and Iran. However, Tbilisi has struggled with US banking restrictions applied to dealing with Iran. Iranians have complained of difficulties in opening bank accounts in Georgia, a country they previously regarded as friendly and receptive in terms of opening private and business accounts.
The proposal to link the card payment systems was made by Iran’s Minister of Economic and Financial Affairs Masoud Karbasian in a meeting with Georgian business officials in Tbilisi. It was part of a wider business trip arranged by the Iran-Georgia Friendship Group, a business lobby aimed at facilitating trade between the two near neighbours.
The Georgian side reportedly welcomed the proposal. But the recent banking difficulties experienced by Iranians in Georgia may indicate that a spanner is going to get firmly lodged in the wheels of any potential deal.
Reports have previously stated that Iran was on the way to connecting its banking system with those of other countries including Russia, Azerbaijan,
31 GEORGIA Country Report August 2018 www.intellinews.com