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Financial Institution Licensing

What is the minimum capital for a bank?

The minimum authorized capital for a commercial bank is 50 million GEL, which must be fully paid in cash by the time of licensing.

Difference between MFI and Loan Issuing Entity?

An MFI is more regulated and can attract loans (with limits), while a Loan Issuing Entity lends only from its own funds and cannot attract deposits.

What does "Fit and Proper" mean?

These are criteria used by the NBG to assess the competence, reputation, experience, and criminal record of administrators and significant shareholders.

How long does licensing take?

Statutory limits exist (e.g., 3 months for a bank), but in practice, the process can take 6-12 months due to document complexity and NBG reviews.

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Financial Institution Licensing: Banks, MFIs, and Loan Issuing Entities

Licensing of financial institutions in Georgia is a complex and multi-stage process supervised by the National Bank of Georgia (NBG). This service covers obtaining a commercial bank license, as well as registering Microfinance Organizations (MFIs), Loan Issuing Entities, currency exchange points, and Payment Service Providers. The NBG imposes strict requirements on authorized capital, "Fit and Proper" criteria for management, Anti-Money Laundering (AML) mechanisms, and information security. Mistakes or incomplete documentation during the licensing process can lead to application rejection and delays in starting the business. A qualified banking lawyer will help you navigate this bureaucratic maze and successfully obtain the right to operate.

What Does This Service Cover?

Specialists on Legal.ge offer full legal support during the licensing process:

  • Structural Consulting: Analyzing the business model and selecting the optimal legal form (Bank, MFI, Loan Entity).
  • Documentation Preparation: Preparing founding documents, business plans, capital origin documents, and management declarations.
  • AML/CFT Policies: Developing internal policies and procedures for preventing money laundering and terrorism financing in compliance with NBG requirements.
  • Application Submission: Submitting the application to the NBG and communicating during the review process.
  • Administrator Assessment: Filling out declarations and accompanying administrators for compliance with "Fit and Proper" criteria.
  • Post-Registration Support: Fulfilling reporting obligations and interacting with the regulator.

Common Situations When You Need a Lawyer

Licensing is difficult and often faces obstacles:

  • Capital Verification: The NBG demands convincing proof of the legal origin of the authorized capital, which is hard to prepare.
  • Administrator Rejection: A director or supervisory board member was rejected due to past experience or criminal record.
  • MFI to Microbank Conversion: You want to transform an existing MFI into a Microbank and need to meet regulations.
  • Fintech: You are creating a new financial tech product (payments, e-wallet) and need an appropriate license.
  • License Revocation: The NBG threatens to revoke your license due to violation of norms, and you need defense.

Georgian Legal Framework

Main acts include the Law "On the National Bank of Georgia," Law "On Activities of Commercial Banks," and Law "On Microfinance Organizations." Specific licensing rules are outlined in Orders of the NBG President. The Law "On Facilitating the Prevention of Money Laundering and Terrorism Financing" is also crucial.

Process: How Collaboration with a Specialist Works

The process includes:

  1. Audit: Preliminary check of founders and capital.
  2. Packaging: Assembling the full registration package (charter, structure, policies).
  3. Submission: Submitting the application to NBG.
  4. Deficiencies: Correcting deficiencies identified by NBG.
  5. License: Receiving the license and starting operations.

Why Choose Legal.ge?

Financial licensing is the most complex procedure in Georgian business law. Legal.ge connects you with lawyers who have successful experience registering banks and financial institutions. With our help, you can pass the NBG's strict filter and start operating. Find a banking law expert on Legal.ge.

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Specialists for this service

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