De-dollarization

Amendments Introduced in Parliament for Giving Loans in Foreign Currencies

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In the framework of the De-Dollarization Government Program, the Georgian Government plans to introduce fines for lending money in foreign currencies for loans under 100,000 GEL.

A package of legislative amendments prepared by the Ministry of Finance was introduced to Parliament. According to the proposed amendments, a special Article 153 (8) will be added to the Administrative Offenses Code of Georgia. The fine for violating the article is 1,000 GEL.

As described in the explanatory note of the draft law, fines are needed because of a number of cases where individuals did not obey the law that requires loans under 100,000 GEL to be given only in the national currency, the Georgian Lari (Civil Code of Georgia, Article 625, part 7)

De-Dollarization legislation entered into force on January 13, 2017. In this legislative package, the limit on the interest rate of loans was set at 100%; giving loans up to 100,000 GEL in a foreign currency was banned; and advertising the price of property/service in a foreign currency was prohibited. Special “Larization” norms were introduced enabling citizens to transfer loans taken in a foreign currency into Georgian Lari, for which the government is giving subsidies. Under this scheme, 80 million dollars worth of loans have been transferred into Georgian Lari since January 13, 2017.

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