President Giorgi Margvelashvili has signed the bill into law removing the banking supervisory functions from the Georgian National Bank (NBG) after his veto was overridden by parliament last week.

The package of legislative amendments went into force after they were published by the state online registry of legal acts on September 10.

Financial Supervisory Agency will be established to monitor banking sector and other financial institutions – the function is now carried out by departments, which are part of NBG.

The new Financial Supervisory Agency should be operational within one month.

According to the law, the planned Financial Supervisory Agency will be governed by a seven-member board. The president of the NBG and one more member of the central bank’s board will take two seats and the five other seats will be occupied by candidates nominated by the government and confirmed by parliament. The head of the agency will be nominated by board members and confirmed by the parliament.

Although the President vetoed the bill, he signed it after the Parliament overturned the veto; the President did so “out of respect” for the legislative body, his advisers say. After the veto was overridden, the bill would have been enacted anyway without President’s signature.

Davit Pataraia, head of the President’s administration, said on September 10, that President Margvelashvili believes that overturning his veto was a “serious mistake” by the Parliament.