Here is a humorous story:  a visitor from Switzerland looked around Tbilisi and asked in wonder:  ‘Why do you need so many banks?’

Coming from a peaceful and well-to-do country, the visitor thought all buildings with iron bars and iron doors were banks. Of course this is an unusual tale, but we must admit, there are too many banks in our country!

At one time only one bank existed in Georgia, - the Real Estate Bank,  founded through the vigorous efforts of the famous Georgian man of letters and public figure at the end of XIX century, Ilia Chavchavadze. Today, this bank has wooden doors as it had in Chavchavadze's time. Now the Joint -Stock Company, the Bank of Georgia is located here.

To what extent does the Bank of Georgia prove profitable for the country?

As Zurab Akhalaia, the Deputy Head of the Operational Department explains, the bank was founded in 1994 with a capital of 150 000 USD, and has now reached 11.2 mil Lari. The Bank has 32 branches all over Georgia and 15 correspondents abroad. It participates in SWIFT, is an agent bank to the Western Union and acts as an authorised member of the EVROPEY.

These accomplishments have been achieved in just a few years. The Bank of Georgia  has opened credit lines amounting to 2 million German Marks in "Deutshe Bank" and the "Drezden  Bank"; the EBRD has further extended the credit bringing it to a total of 6 million USD, of which 1 mil. is already in operation. ABNAMRO personnel strictly control the funds. Similarly, the Bank of Georgia controls its clients from different fields of activities. Everyone is subject to control. However, clients which have a solid credit history with the bank may establish a preferred relationship.

But, this is Georgia, where people still remember fake banks such as  the "Golden Chalice" and "Golden Fish" and the mountains of gold they  promised.  This is the same Georgia, where people became aware of the term "bankruptcy" prior to the word "dividends". To what extent can a bank, even if it is the Bank of Georgia prove creditable to Georgia  with this kind of mentality?

Trust has fortunately been achieved. Five newly opened Service Departments operate, whereas previously only one had  existed. The individual branches also have Service Departments which demonstrates bank effectiveness.

One thing is obvious; a single bank, however powerful and strong, will not be able to save Georgia's economy. But diligent work and constant concern for the country's future is within its prerogative.

Diligent work implies reasonable selection of partners, who are in a position to secure  income for the bank and will themselves profit from the collaboration. The Bank of Georgia has established this type of partnership with the MAGTI GSM and conducts various banking operations for this company. Customers of MAGTI GSM now use plastic cards issued by the bank of Georgia  and no longer have to pay in cash.

To what extent is the Bank of Georgia profitable for Georgia?

A strong bank is always profitable.

One more thought, a Bank always needs iron doors, even though the doors may be made of wood.

TEA TOPURIA