Georgian President Minds Russian Banks
07 March, 2013
Georgian President Minds Russian Banks
Presidnet of Georgia, Mikheil Saakashvili, bewares of likely entry of Russian banks into Georgian banking sector as hazardous for Georgian economy and population. Sector pundits find his statement irresponsible and affecting the image of Georgia and its banking sector. Georgian president looks so concerned over possible entry of Russian banks into Georgian reality that he disseminates the false information about alleged handover of leading Georgian banks such as Liberty Bank and TBC Bank to Russian giant banks Alfa Bank and SberBank
“Alfa Bank, one of the biggest Russian banks, closely affiliated with the Kremlin, buys TBC Bank, Cartu [owned by the family of Prime Minister of Georgia Bidzina Ivanishvili, who earned his billions in Russia before he joined Georgian political life -GJ] is already a Russian bank, Gazprom Bank is intent on buying several Georgian banks. We should understand that 60-70% of Georgians is tied to those banks through their credits, mortgages, etc. Georgian authorities declare that economy will go down. If there is no growth, people fail to pay off credits, the banks will seize their property,” Saakashvili said during his meeting with Georgian media that was aired by TV channels on February 26, 2013.
The President warned that Ukraine is already facing that problem as 70% of Ukrainian capital is in Russia’s hands, which prompts Europe to have “cold reaction” to Ukraine. According to Saakashvili, he spoke of the entry of Russian banks based on the information of the National Bank of Georgia (NBG); however, the NBG as well as the Georgian banks in question refuted the information. Both Liberty Bank and TBC Bank instantly, against the backdrop of the ongoing press-conference where Saakashvili starred, spread the counter-information stating that they hadn’t either sold out their banks or were planning to divesture them to the referred or any other Russian banks. The NBG disclaimed the presidential statement on the second day, stating that “it has no information about possible divesture of share of Georgian commercial banks that were named at the TV press conference.” Press-centers of SberBank and Alfa Bank also refuted any ongoing or upcoming negotiations on acquisition of the shares of Georgian banks, Inter-Press news agency reported. Later Saakashvili said “sorry” for voicing mistaken information although he insisted that Russian banks are interested in purchasing Georgian banks and he just confused the names of the banks.
“If I named banks incorrectly, it was not a deliberate action, I did not want to create problems to the banks,” Saakashvili said on February 27, 2013.
However, he created problems. Georgian authorities as well as economic analysts assessed the Presidential lie as unethical and irresponsible since negative statements of high-ranking officials might inflict an irretrievable damage on the said Georgian banks.
“This presidential statement was an outrageous sabotage. When the President goes and announces about banks’ handover, it may lead to the bankrupcy of the banks, clients may panic and demand their money. There are such instances in the world practice. Fortunately, Georgian clients did not react that way,” Irakli Lekvinadze, the economic analyst, said.
According to Giorgi Kvirikashvili, Minister of Economy and Sustainable Development of Georgia, who was director general of Cartu Bank just a year ago, banks are ten-fold sensitive businesses and statements should be made carefully. He reminds Saakashvili that he was the one who approved entrance of Russian VTB Bank in United Georgian Bank (UGB) in 2005 when UGB covered 10% of entire Georgian system. The sector pundits also indicate on divesture of state property with strategic importance to the state-owned Russian companies such as gold exploration and procession industry, electricity and water distribution networks of Tbilisi. Besides, the Czech-based company that privatized electricity distribution network in regions is supposed to be a front figure to Russian capital. Saakashvili’s government was intent to divesture the Georgian portion of the North-South gas pipeline running from Russia to Armenia and only interference of the White House changed their mind.
“I wonder that Saakashvili who has been handing Georgian companies to Russian companies for 9 years of his office term is wary of Russian capital inflow in Georgia now,” Demur Giorkhelidze, an economic analyst said. “As a result Russian capital is so heavily represented in Georgia that addition of two more banks cannot aggravate the situation. The more so that Alfa Bank is a very successful bank with good management and it may do only good to Georgia distorted banking system if this bank enters here with its financial policy and skills.”
According to him, Saakashvili’s regime is responsible for creation of a vicious banking system in Georgia monopolized by couple of favorite banks that finance only their own affiliated businesses and enjoy huge profits rather than to finance economy.
“Russian banks disburse credits at 11-12% as cap interest rates and aim to cut to 9-10% while rates of Georgian banks start from 12% and go as high as 24%. It will be great if they enter here and cut down credit price,” Girokhelidze said.
Other Stories
Anaklia Port and its importance for Georgia
In 2016, Anaklia Development Consortium was authorized to launch the construction of Anaklia Port.
Cryptocurrency mining threatens electrical network in Abkhazia
In the breakaway region of Akbhazia rampant cryptocurrency mining is threatening the shaky electrical network, reports an article of the news portal EuroNet.
Caucasus Wine University to be opened in Gurjaani
In the Kakheti region a new viticulture campus of the Caucasus University is in the process of planning.
Photos describing life of the poorest in Georgia
Fight with poverty should be among top priorities of every government in every country.
Training farmers to rescue the organic hazelnut production in Georgia
Even drizzling rain and unpleasant gusts of wind can’t prevent the farmers from coming and participating in the agricultural training.
Bleak times for organic farmers in Georgia – but there is hope
Organic hazelnut production is a delicate plant in Georgia that has emerged just a couple of years ago. Various pests, among them the Asian stink bug Parosana, trouble hazelnut farmers and menace their livelihood – even before their businesses could really take off.
Hybrid car imports are going through the roof in Georgia
Thanks to their fuel economy, the popularity of hybrid cars is increasing in Georgia, where fuel affordability is low and prices for fuel are unstable.
The New Year offer from MAQRO Construction - Apartments with unbelievable discounts and the parking spaces for FREE!
Location, green yard, spaces for various needs, experience of the construction company and parking space are the main important criteria for potential buyers of apartments.
Interview with the co-founder of Kiwi Vegan Café – the first vegan place in Tbilisi
Behind the Kiwi Vegan Café stands a group of activists who wants to raise Georgian’s awareness for animal rights and welfare.
Biblusi opens first shop for tourists - Georgian
The largest book shop in Georgia Biblusi opens the first shop specially designated to the needs and interests of tourists and named it Georgian.
Georgia improves by five ranks in the Prosperity Index
In the overall Prosperity Index rankings, Georgia has climbed by 5 positions from 85 to 80 when compared to last year. As such, Georgia is the best performing country in the CIS zone.
The future is bright for electric cars in Georgia
The numerous hybrid cars in the streets of Tbilisi cannot be overlooked. Entrepreneur Sulkhan Gvalia calls them “pagers”, referring to the predecessor of mobile phones.
Georgia’s fight against the big tiny enemy – Asian Parosana
It’s a tiny creature, but the harm it did to the Georgian agriculture sector was and still is immense.
New cable route: from Kobi to Gudauri in 15 minutes
On the 15th of December, cable transport is scheduled to be opened connecting Kobi and Gudauri.
Tourist boom in Gudauri – majority of hotels are booked by foreigners
Gudauri is among the most popular winter resorts in Georgia.
Medical tourism increases in Georgia
In the last 9 months, Georgia was visited by 19 500 foreigners for medical and recovery purposes.
Doing business in Georgia has become easier than in America
According to the Doing Business 2019 report published by the World Bank, Georgia ranked 6th among 190 countries in terms of simplicity of doing business. This was an improvement over two ranks compared to last year.
Problems that foreigners frequently face in Georgia
The importance of Georgia as a tourism hub is growing year after year.
Tbilisi TV Broadcasting Tower – Better than the Eiffel Tower?
It is planned to renovate the Tbilisi TV Broadcasting Tower, one of the landmarks in the capital.
Georgian Fusion Menu by The Biltmore Hotel Tbilisi
5,895,914 international visitors have visited Georgia between January and August of 2018. Compared to the previous year the number has increased by 12.2 per cent.
Advertising of gambling and lucrative games may become banned in Georgia
Advertising of gambling and lucrative games may become banned in Georgia. Those who violate the new rule would be fined GEL 10 000.
Lebanese café-lounge Beirut opens in Tbilisi
What is necessary to organize an unforgettable event? – Fun, emotions, lots of surprises, good music and delicious menu.
Georgia second among the fastest growing tourist destinations in Europe
Georgia is among the fastest growing tourist destinations in Europe. The data is published by the UN World Tourism Organization.
Bitmain launches world digital mining summit in Tbilisi, Georgia
Bitmain CEO Jihan Wu and Roger Ver, CEO of Head Speaker List featuring Circle, and Genesis Mining when Digital Mining Leaders Convene In Tbilisi on September 21-23
TBC Bank and Gazelle Finance have teamed-up to support Medical City, a leading healthcare provider in the western region of Georgia to launch the Western Regional Center Of Modern Medical Technologies.

Exchange Rates
GEL Exchange Rate
Other Stories
Recently Toyota rolled out Global Campaign under this slogan that reflects the Olympic and Paralympic Spirit of Encouragement,
A couple from Switzerland combines Swiss tradition and technology with Georgian products. Their cheese is made in the Georgian mountains and sold in local stores and hotels.
It has been more than five years since the residents of Lilo village, near Tbilisi, cannot open their windows.
63 000 GEL was received by the Georgian Agro Export Group which is just a small part of the European Neighbourhood Programme for Agricultural and Rural development.
Georgian entrepreneur Guka Tavberidze, who runs his own business in the UK and does it quite well, has been invited by BBC
The grand opening of 7-star The Biltmore Hotel Tbilisi took place in Georgia’s capital on July 31.
DUSHETI, Georgia – The Georgian government and the World Bank will allocate USD 5.6 million (12 million GEL) to fund
A new Georgian clothing brand named Person has emerged in Georgian market.
Georgia is in the midst of an economic maelstrom, Euronews reports.
Situation at Georgia’s mineral water market is interesting: over the last year, the volume of export has grown by 56 percent. According to “GeoStat”, over $114 million worth of mineral water was sold
GEL Exchange
January 2019
Mon Tue Wed Thu Fri Sat Sun
1 2 3 4 5 6
7 8 9 10 11 12 13
14 15 16 17 18 19 20
21 22 23 24 25 26 27
28 29 30 31