Charge-free communal payments
07 October, 2010

Georgian consumers can pay their communal service bills free of charge starting October 1, 2010 at 25 outlets of Liberty Bank, one of the leading Georgian banks. Liberty Bank revoked commission fees fixed for handling with communal bills’ transaction in line with the governmental initiative aimed to relieve population of unfair and redundant outlays.
In mid-September of 2010 Georgian parliament found unfair that banks charge Georgian population by commission fee when they handle with the communal-service bill’s clearance transactions [ for

electricity, gas, water and sanitary service].
Each family spends at averagely GEL 2.50 per month on banking commission fees, Zurab Melikishvili, General Secretary of ruling parliamentary team and a Head of Finance and Budget Committee, accentuated on September 14, 2010. He stressed that charging consumers by banking payment during clearance communal bills is an unfair practice and equals to picking-pockets in fact. Therefore he came with an initiative to abolish the redundant banking fee and asked National Bank of Georgia (NBG) to regulate the issue.

“It is a strange confusion and picking pockets [of consumers] to put it in stronger terms. Anyway, whatever the assessment we make it is unfair treatment when any of our citizen when paying bills for electricity or gas at banks is demanded to pay 50 tetri above the bills,” Melikishvili elaborated during the parliamentary session on September 14, 2010.
The point is that communal service provider companies including electricity, gas, water, and sanitary service abolished their bill-payment service centers in Tbilisi where consumer could clear bills without commissions. Service centers in regions are still in operation and provide with free of charge service. But in the capital commercial banks took over the responsibility of bill-clearance procedures fixing from 50 tetri to GEL 1 per transaction. Out of five biggest leading Georgian banks only ProCredit Bank supplies with free of charge bill-clearance service. Consumers also can pay via special terminals installed at supermarkets and marketplaces but they also charge payers at approximately 70 tetri to GEL 1-2 – much more than banks. Banks have no alternative in fact. Therefore they must be regulated lest to misuse with their privileged position and NBG is responsible for regulation this issue, Levan Surguladze, Head of Caucasus Financial Service (CFS), believes.
“It is not fair when consumer who pays due liabilities for communal service has to pay extra payment to banks, and when a consumers pays GEL 7 for communal service for example and is charged by additional  50 tetri to GEL 1  it is a high charge, specifically for pensioners [and other socially vulnerable citizens] it is very high. Consumer is not responsible for that, this commission fees should be either revoked or diminished. Or let communal service provider companies provide with free of charge service centers. Why did they revoke them? Companies are responsible to clear this issue with banks. Central banks of developed countries fix cap limits on such commission fees to prevent banks [that have no alternative in fact] to misuse by their privileged position. And NBG has to solve the issue, it should find due preventive levers to it,” Surguladze explained to Georgian Journal.

Georgian central bank fixes no cap limits to banks at the moment and neither discusses adoption of cap-limits in the near future. It found solution to the problem in two days after Melikishvili trumpeted his initiative.
Giorgi Kadagidze, President of the NBG, promised to find due solution to the problem [acceptable to all interested sides] after meeting with banks and communal service companies. He hinted however that relationship with “private law entities” must be carefully tended. Kadagidze kept his promise and after two-day consultations with Georgian banks Liberty Bank turned out willing to revoke the questioned commission in 25 Tbilisi-based outlets.
Liberty Bank runs the most expansive network of outlets across the country and enjoys exclusive right of pensions and other state allowance delivery throughout Georgia. However it revoked the commission charge on communal service bill-clearance transactions only in 25 offices in Tbilisi, the remainder outlets maintain the questioned charge. These 25 Liberty Bank outlets are chosen so as to make available free of charge service in all parts of the capital. To make consumer aware of their location addresses of 25 outlets will be put on the bill-paper. Liberty Bank announced the launch of the free-of-charge service on October 1st, 2010.

Other banks as well as other service centers of Liberty Bank will also provide by communal bill clearance transaction-related service but maintain charges. Aleksandre Khetaguri, Energy Minister of Georgia, believes 25 outlets are quite sufficient to insure free-of-charge service to the entire Tbilisi population. He reminded that Telasi, Tbilisi electricity distribution company, ran just 21 service centers before shutting them down and it perfectly managed with bill-clearance procedures.
According to Zurab Gvasalia, President of Association of Georgian Banks, other banks also had some proposals to solve the problem but the Liberty Banks’ initiative shadowed all of them.
“Other banks can also implement communal bill-clearance transactions without charge,” Gvasalia underlined. “Nobody hampers them to do so.”

Melikishvili seemed absolutely happy over the Liberty Bank’s decision. He thinks that since consumer is exempted of banking charges at 25 Tbilisi-based service centers the problem very likely is solved.