National Bank bans advertising of pension-secured loans to protect pensioner rights

Advertising of loans secured by pensions is now banned in Georgia without individual consent of pensioners, the National Bank announced on Wednesday.

The change will apply to pensioners whose sole income is pension or other state social allowance, the Bank added.

By the new decision of the NBG, commercial banks will not be able to advertise pension-secured loans offering loans to customers on the basis of pension or other social payments”, it noted.

The NBG also said the change would protect vulnerable groups from uninformed decision-making and debt burden, saying the move would “support the formation of an environment favourable to consumers and introduce a high standard of protecting their rights”.

The upper limit for interest rates on pension-backed loan payments decreased across Georgia in January, with Deputy Finance Minister Mikheil Dundua saying interest rates on pension-backed loans would see an annual reduction.