Commercial Banks Started Playing Role of Security Agents

Rezonansi

Involving commercial banks in politics has a particularly negative impact on their trust level. No one will trust a bank which can collect information about one’s private life and transfer it to the security forces. According to experts, government brought the fastest growing financial sector of economics to downfall.

Newspaper Rezonansi (Resonance) has stated the following in the article: Commercial banks started to play role of security agent/banks’ authority is going down gradually not only among the political circles, but in the entire population due to this reason.

“The regulation has been adopted regarding the Obtaining information, Its Systematization, Processing and Transferring to the Financial Monitoring Service of Georgia. According to the regulation, commercial banks become obliged to ascertain whether the client or the beneficiary owner belongs to the category of the politically active person. If a client or the beneficiary owner is a politically active individual, the bank should take following measures additionally: receive the permission from the bank leadership to establish business relations with this person and take reasonable measures to ascertain the origins of financial assets and the property and conduct intensified monitoring of business relations with this individual. If a client (or the beneficiary owner) becomes a politically active person after establishing work relations with the bank, the bank is obliged to take measures relevant for the monitoring right when obtaining this information.

“The order determined the term for politically active individual who is a citizen of a foreign country who holds the state (public) political post or pursues significant state and political occupation. Also politically active individuals are the head of the state, the head of the government and government member, their deputies, the head of the government department, Member of Parliament, member of Supreme Court, member of Constitutional Court, the head of military, member of Council of national Bank, the head of the enterprise where government holds a share, member of executive body of a political party (union), a significant political figure, his/her family members and people in direct business relations with him/her. An individual is considered to be politically active for a year after leaving the job.

The author of the article states: “Thus, commercial banks become obliged to reveal politically active individuals. However, not too long ago the President of National Bank Giorgi Kadagidze stated that it is inadmissible to politicize the commercial banks. According to the expert Lia Eliava, the financial monitoring service of Georgia was created after the urgent request of the special group of financial activity – otherwise the Georgian banks would be isolated from the world financial system. The recommendations of the group indicate what special measures must be taken by the financial institutions of Georgia towards the politically active groups; it also defines who politically active individuals are. According to the recommendation, the monitoring must be conducted only towards the politicians of foreign countries who work in the state and public services of the respective country. The recommendation does not concern the local individuals. According to the specialists, the government adjusted this instruction to its interests for pre-election period,” – the author of Rezonansi article states.

“In this case the definition of the politically active individual is so vague that it can be both the citizen of foreign country as well as the local resident. Imposing such a function on banks in Georgia will bring severe results. It should be emphasized that commercial banks are not only regulated by national bank, but are largely dependent on them. This creates a danger that the commercial banks will turn into the arena for political battles. Practically, the commercial banks have become obliged not only to fight against the money laundering and terrorism, but control the finances of politically active individuals in detail. I am sure the commercial banks will not be enthusiastic towards this decision of government. However, they will have to thoroughly fulfill the orders regulating and controlling bodies,” – expert Lia Eliava notes with the correspondent of the newspaper.

“According to Eliava, because of imposing this function, the authority of commercial banks is gradually decreasing, not only in the political circles but in whole in the population. And in several months, the low trust level will be negatively reflected on their activity. The acts of government conducted towards the commercial banks – first towards Badri Patarkatsishvili and this time towards Bidzina Ivanishvili’s Cartu Bank, destroys the trust level towards Georgian banks in the local and foreign markets,” – the author of the article notes.

According to interpressnews Press Digest