Page 40 - GEORptMay20

Central bank introduces more flexible retail lending regulations
Georgia’s central bank, the National Bank of Georgia (NBG), has approved changes to lending regulations for individual borrowers that will come into force on April 15. ​The amendments aim to simplify the process of borrowing for solvent borrowers, reduce bureaucratic burdens, increase flexibility and, as a result, make the lending process more efficient.
The NBG said that an objective of the changes was to move from “a rule-based approach to a more principles-based” approach. Such an approach required less interference in the management of lending, something which would “increase the role of the financial institution's risk management function and increase access to finance for the solvent population”, read an NBG statement.
Under a key amendment, an analysis of a potential borrower's earnings will still be mandatory, but the financial institution will be able to itself define procedures.
The limit on the loan servicing ratio (payment-to-income, or PTI) will be cancelled. The PTI ratio will remain different for foreign currency loans, with the aim of protecting the borrower and fluctuations of the foreign exchange rate of the financial system from risks.
Mortgage maturity limits will increase: the maximum maturity for mortgages in the national currency, the lari, will increase from 15 to 20 years.
If an individual receives income from abroad, the loan-to-value (LTV) ratio (a financial term used by lenders to express the ratio of a loan to the value of an asset purchased) for buying an apartment will be expanded from 60% to 70%. Corporate governance requirements will be introduced for commercial banks and microfinance organisations.
8.1.5 ​Bank news
Georgia’s TBC all set for move into Uzbekistan as officials grant banking licence
LSE-listed TBC Bank Group on April 21 confirmed that its subsidiary TBC Bank has been granted a banking licence by Uzbekistan and added that the unit intends to launch banking operations in the Central Asian country in June.
TBC, a FTSE 250 company and one of Georgia’s two major bank groups, said in a press release: “TBC PLC’s strategy is to establish a greenfield, next-generation banking ecosystem for retail and MSME customers in Uzbekistan with a primary focus on digital and partnership-driven channels. Given the current operating environment and impact from Covid-19, we have further optimised our business model with the enhanced emphasis on asset-light and cost-efficient operations.”
In February, TBC CFO Giorgi Shagidze told ​bne IntelliNews​ in an ​interview​: “Retail and MSME banking penetration in Uzbekistan is quite low, so we will be targeting those segments. We will not be targeting corporates as customers or wealth management clients. We will be leveraging our digital capabilities.”
In its latest announcement on its Uzbekistan project, TBC said that the range of products it will offer in the country at launch will include current and savings accounts; cash loans, salary-backed loans and car loans; and cards, mobile application and transactional capabilities including (but not limited to) P2P transactions, money transfers and utility payments.
“In addition, the Bank will also run the point-of-sale consumer finance
40​ GEORGIA Country Report ​May 2020 ​​www.intellinews.com