Bank License Applications — the Statutory Perimeter
Starting banking activity in Georgia rests on an absolute licensing perimeter: taking deposits and issuing credits with their use is possible only on the basis of a banking or microbank licence issued by the National Bank. The Organic Law of Georgia on the National Bank regulates this field with four articles: the perimeter of credit and banking activity under Article 48³, the broad supervisory mandate — including the issuance of licences — under Article 49, the objectives of supervision under Article 47, and group-level supervision under Article 49¹. This page explains what an applicant must know from these four norms.
Article 48³ — the Absolute Licensing Perimeter
The first point of Article 48³ is categorical: no one has the right to take deposits and issue credits with their use without a banking-activity or microbank-activity licence issued by the National Bank. The second point opens the circle further: an entrepreneurial entity or a group of related persons has no right — without registration as a microfinance organization, a non-bank-deposit credit-activity licence or a banking-activity licence — to attract repayable monetary funds from more than 20 natural persons or to advertise such fundraising from a wide circle of the public. The same point provides exceptions — among them the public offering of securities, private offering to experienced investors, the insurance and pension spheres, and a shareholder's loan to the enterprise — this list is the applicant's boundary map: where a licence is needed and where it is not.
Article 49 — Licensing and the Scrutiny of Shareholders
Article 49 gives the National Bank the full supervisory toolkit with respect to a commercial bank, microbank and non-bank deposit institution: supervision encompasses the issuance and revocation of licences — including a conditional licence for a commercial bank — inspection and regulation, written instructions, additional requirements and restrictions, supervisory measures and sanctions. For an applicant the shareholder-scrutiny norms are particularly significant: the Bank is entitled to demand and receive information on the sources of the origin of capital and on the holders of a significant share — both direct and beneficial owners — and to impose additional requirements on them. The success of an application therefore depends not only on the formal completeness of documents but also on the transparency of the shareholders.
Articles 47 and 49¹ — Objectives and Group Supervision
The substantive boundary of licensing decisions is set by Article 47: the task of supervision is to promote the financial stability and transparency of the financial sector and to protect the rights of consumers and investors — these objectives extend to the applicant to the extent that a new participant changes the sector's risk profile. Article 49¹ is written for holding structures: the purpose of supervising a banking group's activity is to promote the sector's stability and the sound functioning of the banks and microbanks within the group; supervision encompasses on-site and off-site inspection, audit on an individual and consolidated basis, and assessment of the group's risk profile and internal-control mechanisms. An applicant that is part of a group must be prepared for this consolidated view from the application stage.
Strategically, a licence application is a project built on two questions. The first is fitting the business model to the licensing perimeter: before any form is filled in, a decision must be taken on which activity falls within which frame — banking, microbank, non-bank-deposit or microfinance — and that decision determines the entire spectrum of future requirements. The second is putting the shareholder structure in transparent order in advance: documenting the sources of capital and uncovering beneficial chains at a late stage costs far more than before the application. Both questions are matters of legal analysis, and that is why the application should begin with a lawyer's involvement.
Frequently Asked Questions
Below we answer the most frequent questions about licence applications.
May deposits be taken without a licence?
No — taking deposits and issuing credits with their use requires a banking or microbank licence; even attracting repayable funds from more than 20 natural persons without a licence is prohibited.
What is a conditional licence?
A licence form provided for a commercial bank, listed in the supervisory toolkit alongside the issuance of licences.
Does the Bank scrutinize shareholders?
Yes — the Bank demands information on the sources of the capital's origin and on the direct and beneficial owners of a significant share, and imposes additional requirements on them.
What happens with a holding structure?
Regulation rises to the group level — inspection, consolidated audit and group-risk assessment are defined by Article 49¹.
How We Help on Legal.ge
On Legal.ge you can contact an experienced banking-law lawyer who builds a licence application correctly from the outset: determines the needed licence form within the perimeter of Article 48³, prepares the shareholder information against the requirements of Article 49, and, where the structure is a group, accounts for the consolidated view as well. Fill in the request form on the site and get a qualified consultation on Legal.ge.