Some commercial banks have set off GEL 200 allowances provided by the State in January 2021 against debts for individuals affected by the coronavirus pandemic. Eleven individuals applied to Human Rights Center (HRC) with such a complaint. HRC disseminated a special Appeal stating that the main purpose of the Anti-Crisis Plan i.e. to assist citizens affected by the coronavirus, had failed, and called on some of the commercial banks to return the money seized to the unemployed persons. As soon as the appeal of HRC was spread, Georgian Banking Association became involved in the case, after which the banks returned the deducted money to all eleven individuals.
Among those whose money was seized by the banks is A.B. a resident of Tbilisi. She lost her job due to the restrictions imposed in the wake of the Coronavirus pandemic. At the end of January, GEL 200 was credited to his account. The bank wrote off the whole amount against her outstanding debt. A.B. initially tried to solve the problem on her own: approaching the bank and demanding a refund of the allowance, but was refused the refund.
The amount of the allowance was also fully deducted from L.M. After consultations at HRC, he was returned GEL 100 and was refused the refund of the remaining GEL 100.
“The procedure for paying state allowances to people affected by the coronavirus pandemic is provided for by Ordinance N286 of the Government. The Ordinance reads that the allowance provided by the Anti-Crisis Program may not be subject to seizure and other measures ensuring the payment of tax arrears. It was unclear why the bank set off the allowance to citizens in order to repay the debts. The main goal of the Anti-Crisis Plan is to provide financial assistance to the population affected by the pandemic, and in this case the state allowance did not reach the addressee,” said Eka Lomidze, a lawyer with HRC.
After HRC issued the special appeal, the Banking Association of Georgia and its chair, Aleksander Dzneladze, became involved in resolving the issue.
Aleksander Dzneladze answered several questions to Humanrights.ge.
- Eleven citizens affected by the Coronavirus pandemic have applied to HRC, to whom private banks have deducted allowances provided by the state in the amount of GEL 200 offsetting the debts, while the Ordinance of the Government stipulates that such allowances may not be subject to seizure and payment of tax arrears. Did you have this information before HRC released the appeal and how large was the problem? Have individuals applied to your association with similar complaints?
- No citizen has filed such a complaint with Banking Association.
- Why were the allowances provided by the State deducted, what was the reason?
- Within the Anti-Crisis Program, thousands of people received allowances from the State through banks. There are not many such flaws. Therefore, we cannot say that this was a systemic problem. This was a technical flaw that was only revealed in relation to non-standard bank loans.
As we found out, the amount of the state allowance was deducted against the debt of the individuals whose loans were outstanding as problem loans or they have used overdrafts and have withdrawn the sums from the credit cards in greater amounts than it was allowed.
To make it easier for users and readers to understand, let me explain what happened: The coronavirus pandemic affected the banking sector like many other business sectors in the country. 2020 was not an easy year for the banking sector. It became necessary to make some changes in banking operations that were impossible to consider in advance.
Deduction of the amount credited to the account is a standard operation, which the bank carries out in the case the customer has some liabilities before the bank. In order the allowance paid within the Anti-Crisis Program not to get deducted against the debts, the software was readjusted and restrictions were introduced on the deductions of the amount due to debts. An error occurred due to a technical defect in some cases and only in the cases of non-standard loans, the software failed to detect such restrictions and the amount of the state allowance was deducted to cover the debt liabilities.
- Is this problem solved and if so, how?
- After HRC issued the appeal, we contacted the commercial banks and discussed the eleven cases provided by HRC with the banks individually. Eleven people were refunded by the banks. I would also like to mention that the banks had already started investigating these cases before our appeal and were looking for ways to return the money.
- It was not that easy. Before applying to HRC, these individuals approached the banks and demanded a refund, but were refused.
- Returning an already deducted liability is technically not a simple procedure. When we contacted the banks, they were already working to eliminate the problem. By this time the incident is over: the deducted amount has been fully returned to everyone.
- What is being done to prevent such cases from happening again in the future?
- No one is insured against mistakes and we cannot guarantee that such a mistake will not happen in the future. However, I can say with confidence that if such a mechanical error occurs again, it will definitely be corrected. To do this, the customer must apply to the bank and indicate in the statement that the bank has misused the money intended for a social allowance. In such a case, the bank will definitely refund it.
If the time and conditions offered by the bank are not acceptable to the customer, then they can contact us, Banking Association is always ready to help.
HRC carries out the project Free Legal Advocacy and Human Rights Monitoring after the Coronavirus Pandemic with a support of the Embassy of the Netherlands in Georgia. The aim of the project is to identify the possible violations of human rights during the state of emergency announced for the prevention of the spread of the coronavirus and in the post-pandemic period and to raise awareness about the possible violations in Tbilisi and five regions of Georgia: Shida Kartli, Kakheti, Kvemo Kartli, Imereti and Samegrelo.