Georgia mandates national currency for all loans up to 1 million GEL

Effective today, July 1, all loans and bank credits up to 1 million GEL must be issued exclusively in the national currency. This new restriction applies strictly to borrowers whose primary income is earned in Georgian Lari (GEL). The regulation exempts individuals who receive their income in foreign currencies, whether in US Dollars, Euros or any other foreign tender.

According to the official decree signed by the Governor of the National Bank of Georgia (NBG), Natia Turnava, lending institutions are prohibited from issuing loans under the 1 million GEL threshold in foreign currencies unless the borrower’s income is completely shielded from exchange rate volatility.

The decree stipulates the following conditions for exemption:
“A borrower’s income is deemed sufficient to service a loan or bank credit if it is received entirely in the corresponding currency of that loan. Income shall be classified as being received in the loan’s respective currency only if the source of that income remains insusceptible to exchange rate fluctuations throughout the duration of the credit agreement, and originates from a country where the loan’s currency serves as the official national tender.”