Page 31 - GEORptJul18

8.1.4 Banks specific issues
Georgia’s TBC Bank clarifies banking restrictions on Iranians
Georgian central bank to up minimum regulatory capital requirement fourfold
Largest Georgian lender TBC Bank has clarified new restrictions on Iranians conducting business in Georgia, including new rules on residency, the Financial Tribune reported on May 26.
Iranians have used Georgia’s friendly banking climate in recent years to open private and business accounts, but the early May announcement by the US that it is unilaterally exiting the 2015 nuclear deal has forced countries to reconsider their relations with Iranian companies.
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
31 GEORGIA Country Report July 2018 www.intellinews.com