Neobank (Digital Bank) licensing in Georgia is a relatively new and innovative area introduced by the National Bank to foster financial technology development. A neobank is a banking institution without physical branches, serving clients exclusively through digital channels (mobile apps, websites). The National Bank of Georgia (NBG) has developed specific principles for licensing digital banks, which involve a gradual increase in capital requirements and the use of a "sandbox" (testing) mode. This model is particularly attractive for fintech startups and tech companies wishing to enter the banking sector but initially lacking the full capital required for a traditional bank (50 million GEL). This service involves full legal and consulting support throughout the complex, multi-stage process of obtaining a digital banking license.
What Does the Neobank Licensing Service Cover?
Specialists on our platform, with direct experience interacting with the NBG, offer comprehensive services:
- Business Model Audit: Assessing your digital business model for compliance with National Bank requirements and defining the licensing strategy.
- License Application Preparation: Preparing detailed business plans, strategic documentation, corporate structure, and information about founders.
- Capital Requirement Management: Verifying sources of capital origin and developing a Capital Build-up Plan.
- Technology Audit Support: Legal assessment of IT infrastructure, cybersecurity policies, and the use of cloud services.
- Drafting Policies and Procedures: Developing internal acts for risk management, AML/CFT (Anti-Money Laundering), consumer rights protection, and personal data protection.
Common Scenarios and Practical Needs
Neobank licensing is relevant in the following cases:
- Fintech Startup Transformation: An existing Payment Service Provider (PSP) or microfinance organization plans to expand and become a full-fledged bank through digital channels.
- Foreign Neobank Entry: An international digital bank (e.g., a Revolut-like model) intends to enter the Georgian market and needs a local license.
- Niche Banking Products: A company plans to create a bank for a specific segment (e.g., freelancers, small entrepreneurs) and needs flexible licensing conditions.
- BaaS (Banking as a Service): A tech company wanting to offer banking infrastructure to other businesses and requiring the appropriate regulatory status.
Georgian Legal Framework
Neobank licensing is regulated by the Law of Georgia on Activities of Commercial Banks and the "Principles of Licensing Digital Banks" approved by the Decree of the President of the National Bank. The latter establishes a unique licensing model allowing initial capital to be 5 million GEL (instead of the standard 50 million), provided it increases gradually before moving to full operational mode. Also critical are regulations on "Electronic Operations by Commercial Banks" and cybersecurity standards.
Service Process: What to Expect
The process is divided into several phases. The first is obtaining "In-Principle Approval," for which the business model and administrators' identities must be submitted. Next comes the "Test Mode" (Sandbox), where the bank operates with limited volume in a real environment for a certain period. During this time, technological soundness is verified. The final stage is obtaining the full banking license. The lawyer coordinates communication with the NBG throughout this period, prepares responses to comments, and ensures compliance.
Why Choose Legal.ge?
Neobank licensing is a complex synthesis of technology and banking law. On Legal.ge, you will find lawyers who understand both traditional banking regulations and modern IT challenges. We will help you navigate the path from idea to licensed bank, minimize bureaucratic barriers, and successfully introduce innovative financial products.
Updated: ...