Code of Ethics Regarding to the loan / credit collection by financial organizations

On May 23, 2019, the National Bank of Georgia published the draft Code of Ethics related to loan / credit collection by financial organizations


As NBG announced, the enactment of the Code was due to the need to improve the framework for the protection of consumer rights and to bring it closer to international best practice, as well as problems in the market.

The purpose of the Code is to promote the establishment of rules and habits adopted by financial organizations in the international banking practice when taking out a loan / credit. In turn, the enactment of this Code will help strengthen the reputation of a trusted partner in financial organizations and maximally protect their rights and interests in the process of obtaining a loan / credit under the loan / credit agreement. 

The document stipulates the obligation of financial organizations in the process of obtaining a loan / credit to adhere to the norms of ethics and best practice in business relations and to act in accordance with the principles of good faith, transparency and fairness. Compliance with these requirements after the approval of the Code will be mandatory for all lending organizations regulated and supervised by the National Bank of Georgia, including lending entities. 

It should be noted that the Decree of the president of National Bank of Georgia on "Approval of the Rules for the Protection of Consumers' Rights in the Provision of Services by Financial Organizations" already partially addresses the above obligation, including that financial organizations are required to develop a code of ethics. However, the presented draft Code of Ethics regulates in more detail the obligations of the financial organization in the process of obtaining loans / credits from consumers. 

Recall that the Code of Ethics, the draft of which was published in 2019, has not yet been adopted and it is still under development.