Georgian banks could annul loans for flood-affected borrowers

Banks in Georgia are stepping up to help the people who were hit hardest by the destructive flood in Georgia’s capital Tbilisi on June 13.

Representatives of seven commercial banks confirmed the banks were coming together to work on ways to simplify loan repayment obligations for victims of the flood.

Hundreds of people affected by the natural disaster may be eligible to have their consumer loans negated, said the bank representatives. Between 80 and 85 percent of flood-affected borrowers were already identified and their consumer loans "might be written off”, they said.

This joint banking initiative was one of the main topics discussed at yesterday’s meeting between representatives of seven commercial banks, business ombudsman Giorgi Gakharia and Tbilisi vice Mayor Dmitry Kumsishvili.

Meanwhile on June 16 National Bank of Georgia (NBG) president Giorgi Kadagidze announced NBG would work with the disaster victims to settle their bank liabilities as comfortably as possible.

At the time Kadagidze asked commercial banks to be "more lenient” on their clients who were victims of the flood. He said NBG would allow flood-affected families to postpone their loan repayment obligations without suffering any consequences (such as late repayment fines) and encouraged other commercial banks to follow suit.

From this it appeared commercial banks were willing to support this initiative and go further; to write off some loans completely and to help Tbilisi City Hall support flood-affected families.

Today Georgia’s Prime Minister Irakli Garibashvili thanked the private sector for its "unprecedented” moves to support flood victims.

I welcome the initiative of commercial banks to write off consumer loans. The banking sector and other commercial structures show great solidarity,” Garibashvili said.

It is already known that VTB Bank will allocate 209,000 GEL for affected damaged families. Additionally, Bank of Georgia donated 100,000 GEL to the relief fund, TBC Bank contributed 50,000 GEL, Bank Republic gifted 30,000 GEL, ProCredit Bank offered 30,000 GEL, and Pasha Bank donated 10,000 GEL.