Banks in Georgia: opening an account and alluring non-resident banking

Today, by simplicity of leading business Georgia takes the 6th place internationally (according to the information from the World Bank). A significant contribution to development of its economy was made by the financial sector in particular. The Georgian bank system is working steadily and reliably and, which is most important, it brings great profit. In comparison to 2017, in 2018 г. the net profit of the bank system had increased for 5% (for 44,9 mln. lari).

Beside stability, non-residents obtain from Georgian banks: low commissions for operating-cashier service, availability and simplicity of execution, strict correspondence of the confidentiality, and developed systems of remote service. This all encourages businessmen from all over the world to open personal and corporate accounts in local banks.

Peculiarities of the bank system of Georgia

The Bank system of Georgia began to operate in 1991. As in most countries of the world, the system is bi-level. The top level belongs to the National Bank of Georgia, which implements the monetary-credit policy of the country, controls stability of the national currency and foreign economic activity, and regulates the activity of financial institutions.

The second level belongs to commercial banks. At the beginning of 2019, there were 15 banks in Georgia, among which 14 had foreign capital. Although there are few banks, their number is steadily growing. In December of 2018, in comparison to the previous month, aggregate assets of the bank system increased for 3,4% and reached the mark of 39,7 bln. lari.

The first five Georgian banks by the level of the obtained income upon results of 2018 are the following:

• TBC Bank (361 mln. lari);
• Bank of Georgia (342 mln. lari);
• Liberty Bank (52 mln. lari);
• Basisbank (35,2 mln. lari);
• VTB Bank – (Georgia) (30,7 mln. lari).

TBC Bank and Bank of Georgia are the biggest banks in Georgia. They control more than 50% of the bank market of the country.

Peculiarities of the Georgian bank system are:

• absence of banks with state ownership;
• 14 of 15 operating Georgian banks are owned by foreign investorsм;
• financial sector is the leader in attracting investments (for the year 2018 – 277,9 mln. US dollars, +22,5% in comparison to 2017);
• developed online banking and other systems of remote service;
• TBC Bank and Bank of Georgia ate two major Georgian banks which shares are convertible at the London stock exchange;
• no captive banks; all financial institutions are independent and define trends of their activity by their own;
• non-residents can open a personal or corporate account remotely, without visiting the financial institution;
• young system of deposit insurance – began operating only on 1 of January, 2018, and provides reimbursement of deposits of natural persons and balances on accounts in amounts of not more than 5 000 lari (approx. 1900 lari);
• high confidentiality – Georgia does not participate in automatic exchange of financial information between fiscal bodies.

The bank sector is the leading one in Georgia, and the country administration takes all measures to promote the development of the financial sector. The bank system of Georgia may be proud for reliability and stability. The National Bank of Georgia actively controls the level of operational risk, here it is prohibited to grant credits to people if the aggregate payment on credit exceeds 20-30% of the average monthly income. For people who can verify their income, a fixed credit amount is assigned depending on the profession. For example, taxi drivers are granted not more than 6 000 lari, hair stylists – 3 500 lari, etc.

Financial services of Georgian banks

IBAN, international plastic cards, online banking, payment system PayPal, premium services – these and many other are available at Georgian banks.

IBAN in Georgia

Georgian banks use the international format for bank accounts, IBAN. It is used by most European countries, as well as in other states. Because of a similar approach to formation of bank accounts, the bank manages to accelerate international transactions and cut their cost.

Georgia started using IBAN in May of 2010. The account in the international format in the Georgian bank includes 22 symbols:

• the first two symbols “GE” denote the national identity of an account;
• 3 and 4 symbols – check digits, they are constant for each country;
• 5 and 6 digits – code of the bank that opened the account;
• the rest 16 digits – number of personal or corporate account. To let the client remember it easier, the number is usually divided with spaces in every four digits.

Plastic cards in Georgia

Georgia does not have its own national payment system. All banks issue plastic cards of international systems Visa or MasterCard, and only the Bank of Georgia deals with another one payment system, American Express.

The total number of active payment cards in Georgia, as of December 2018, is almost 7,5 mln. Most of cards are debit (6,7 mln., 90%), credit cards are only 746 thousands (10%). The proportion of payment systems is the following:

• Visa – 1,91 mln.;
• MasterCard – 4,185 mln.;
• other – 1,35 mln.

Considering that the population of Georgia is less than 4 mln., it can be concluded that everyone or almost everyone here uses plastic cards. Increasing payments using payment cards is verified by the statistics of the National bank. In comparison to 2017, the number of transactions had increased for almost 56 mln., up to 256 mln. Meanwhile, the sum of transactions for 2018 made 24 bln. lari, which exceeds the last-year index for 3 bln. lari.

It should be mentioned that the number of transactions increases, whether made by residents (+28%) or by payment cards issued outside Georgia (+30%).

International payment system PayPal

PayPal is the biggest debit payment system in the world. Approximately 200 million people are using this system; it is available in 202 countries, although in some of them certain services are not provided.

Georgia joined PayPal in 2013, which again verified the stability of the state financial system. For example, Ukraine does not provide yet the full scope of this payment system: it is impossible to receive transfers from other countries, withdrawing cash is also problematic.

Georgian banks provide the full set of services regarding transfers via PayPal. Users can send and receive transfers easily; nevertheless, it should be remembered that the payment system does not support lari, but money can be received in any of 26 currencies.

The option of working via PayPal in Georgia is interesting for IT companies from near abroad, where some of its services are not yet available, e.g. cashing of transfers. Such companies can register a legal entity as a subject of a virtual zone in Georgia and open in a bank a corporate account without visiting a financial institution, receive transfers via PayPal and top up international cards that can be used in ATMs of most countries.

Online banking in Georgian banks

Systems of remote service are very popular in clients of Georgian banks. Typically, when opening a personal or corporate account the financial institution immediately issues a payment card and provides a user with remote access to the account.

Depending on the access level, the client may:

• control his/her financial flows. Meanwhile, the access to accounts is 24/7 and is granted wherever Internet is available;
• make payments, transfers, top up other accounts;
• try other bank services: open deposits, issue payment cards, convert currency;
• set up limits on operations with payment cards.

Georgian banks offer clients to use the following remote systems of service:

• Internet banking – access to account and financial operations at the official bank page using computer or laptop;
• mobile banking – user is provided with a full set of financial services on a smartphone;
• SMS banking – client may perform financial operations using special commands sent in messages to a certain bank number;
• phone banking – user may obtain services of a bank by calling to a contact phone number.

Non-residents are much interested in low cost of services in Georgian banks. In most financial institutions, there is no fee for registration in banking. Usually, a user only pays for a token (device for password generation), e.g. in TBC Bank it costs 10 lari (approx. 4 US dollars). SMS banking in the same bank costs 1 lari per month.

Premium service in Georgian banks

Banks of Georgia may offer to wealthy non-residents not only to open a personal or corporate account, but also to use premium packages. For example, Bank of Georgia offers a special set of services SOLO, Liberty Bank – Private Banker.

Within premium packages, a client obtains:

• payment cards of high status – Infinite, Platinum, World Elite, etc.;
• international concierge service — a special employee of the bank provides 24/7 support of client’s financial operations; employee is available at any time for any issues;
• urgent delivery of payment cards to any country of the world;
• insurance during travel;
• increased interest rates on deposits;
• increased credit limits on credit cards;
• individual terms of service;
• separate premises for negotiations.

Georgian banks can be much told about, but it’s better to get acquainted in person. There are no big commissions, no requirements on the minimum balance on account, developed systems of remote service, and the full scope of financial services. Besides, banks operate with all major world currencies.

The company Offshore Pro Group will help you to choose Georgian bank that will fully correspond to your financial needs. We undertake all bureaucratic procedure related to opening of a personal or corporate account. Contact us now at [email protected], and we will advise you on documents necessary for opening a personal and corporate account, as well as will answer other questions regarding business in Georgia.