Public Defender's Proposal to National Bank of Georgia relating to Protection of Pensioners' Rights

The Public Defender of Georgia has learnt about the violation of the rights of pensioners as a result of the postponement of loans for several months by JSC Liberty Bank due to the spread of coronavirus on the recommendation of the Government.

In particular, due to the grace period,[1] the loan term was extended for older persons, which led to an increase in the accrued interest. After the end of the grace period, the amount stipulated by the new schedule drawn up by the bank was significantly increased compared to the amount of the grace period, therefore the loan became more expensive for the older persons and the duration of the loan agreement increased.

According to the explanation of the National Bank of Georgia,[2] the customer enjoying the so-called grace period activated due to the pandemic caused by the new coronavirus has the right to request the conditions existing before the postponement, including a return to the old payment schedule, for which he must pay the amounts corresponding to the postponed months. In order to use the mentioned right, the customer should apply to the relevant commercial bank, microfinance organization or credit entity. It should be noted that some of the older persons may not have access to information, which is why they are unable to apply to Liberty Bank. The request to return to the old schedule and refinance obligations requires appropriate knowledge, and often, pensioners are not well aware of these issues. Those pensioners who, with the help of a relevant person/organization, individually applied to the bank and requested a new loan payment schedule, significantly reduced the term and amount of the loan.[3]

In addition to the above, overdraft loans offered to pensioners by JSC Liberty Bank are also a significant challenge.[4] The upper limit of the annual interest rate of loans has been determined from 2023, however, before 2023, the said interest rate was inappropriately high for pensioners. Accordingly, the loans taken before the new regulation are recalculated according to new conditions and a new low interest rate based only on the appeal of pensioners and there is again a problem of unequal information in this case too.

The Public Defender of Georgia addressed the National Bank of Georgia with a proposal and requested the development of a relevant resolution/instruction for the purpose of restructuring the pensioners' obligations and for the protection of the affected customers who benefited from the grace period, by which JSC Liberty Bank will refinance/restructure the monetary obligations of the beneficiary pensioners and it will be possible for the pensioners to use the terms existing before the postponement and to return to the old payment schedule. In addition, the Public Defender requested - to take all measures in order to automatically recalculate pensioners' overdraft agreements according to the new low interest rate effective from 2023, in order to avoid violations of the property rights of older persons as much as possible.

[1] Liberty Bank agreement No. 28712453/20968282, 12.08.2019, No. 27471516/19475564, 18.03.2019

[2] Letter No.2-18/3134 of the National Bank of Georgia, 15/09/2023.

[3] For example, the case studied by the Human Rights Center. Information available at: <>

[4] Applications No.14723/23 and No. 14453/23.

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