President Giorgi Margvelashvili indicated that if approved by the Parliament, he will have to veto a bill on stripping the Georgian National Bank of supervisory functions of banking sector.

Speaking at a meeting with business community in Tbilisi on May 29, Margvelashvili reiterated his negative stance towards the bill and said that “there are many reasons” why such proposal should not be adopted and “there is no specific reason why we have to change” the existing system.
 
“I hope that… we will not see a law in the Parliament that the President will be forced to veto,” Margvelashvili said.
 
The bill in question was drafted by two lawmakers from the Georgian Dream ruling coalition and was submitted to the Parliament for consideration on May 21. The Parliament has not yet launched its discussion.

The proposed bill envisages the setting up of the Financial Supervisory Agency from July 1, 2015, which will be in charge of monitoring and supervising the banking sector and other financial institutions. These supervisory functions are currently carried out by departments within the Central Bank.

According to the bill, the Financial Supervisory Agency will have a seven-member board. The Central Bank’s governor will be an ex-officio member of the board, but will have no right to serve as a chairperson of the board simultaneously. The remaining six members of the board will be elected by Parliament. The chairperson of the board will have the right to appoint the head of the agency.

Speaking about the reasons of the initiative, co-sponsor of the bill, MP Mechiauri, said on May 22 that current board members of the central bank “do not reflect at all interests of those forces, which are currently in power.” He also argued that because of that the government has no information about developments in the banking sector.

Speaking at a meeting of a consultative board of Georgian chapter of International Chamber of Commerce on May 29, President Margvelashvili said that there should be “less politics” in business.
 
“I think this kind of decisions is not contributing to our ultimate goal of strengthening economy,” the President said, referring to the proposed bill.

In a joint statement last week leading business associations in Georgia warned that if approved the bill will put country’s banking sector “in jeopardy”.