Cartu Bank headquarters in Tbilisi center. The bank, which has kept relatively low profile never running any large-scale ad campaigns, employees up to 300 people. Photo: Guram Muradov/Civil.ge.

The National Bank of Georgia (NBG) said in a statement on October 19, that it was launching a probe into some of the recent “important” developments that took place in connection to Tbilisi-based Cartu Bank, owned by billionaire-turned-politician Bidzina Ivanishvili.

NBG’s written statement does not provide many details, but lists two facts as reasons behind its decision – criminal charges initiated in connection to alleged money laundering and change of top management in the Cartu Bank.

“One of the aims of the Georgian National Bank is to secure healthy financial environment. In pursuing these goals, the National Bank carries out effective supervision of commercial banks. Based on the law, the banking supervision is carried out both in distance and on the ground. Intensity of inspection depends on a risk profile of a bank, also on extraordinary situations”

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“Several such important facts have taken place in connection to the Cartu Bank; in particular: chairman of the supervisory board, general director and deputies of general director have filed for resignation,” NBG’s statement reads.

Chairman of Cartu Bank’s supervisory board, Giorgi Chrdileli, who also was president of Cartu Group, had to resign immediately after Ivanishvili publicly accused him of being the government’s “agent”. Several others from the bank’s top management also resigned in the wake of Chrdileli’s sacking.

“Apart of this fact, a detailed probe is required into the case that occurred on October 18 in Cartu Bank in connection of which criminal charges have been brought under the part three of article 194 of the criminal code (laundering of very large amount of money),” the statement reads without providing details of the case.

On October 18 Cartu Bank’s cash-in-transit vehicle was stopped by police while it was transporting cash from Bank of Georgia’s headquarters close to Freedom Square; USD 2 million and EUR 1 million in cash was seized by the police, which also detained six employees of the Cartu Bank, accompanying the cash. All six were released after questioning. The Interior Ministry said that criminal charges were brought in connection to money laundering; it, however, did not provide details.

“The National Bank, as a regulator of the banking sector and a guarantor of the country’s financial stability, has decided to evaluate situation in Cartu Bank on the ground, to receive answers on all the questions and based on the results [of the probe] to define the bank’s future supervisory strategy,” the central bank said.

“The National Bank, as a regulator of the banking sector and a guarantor of the country’s financial stability, has decided to evaluate situation in Cartu Bank on the ground, to receive answers on all the questions and based on the results [of the probe] to define the bank’s future supervisory strategy,” the central bank said.

New director general of Cartu Bank, Nodar Javakhishvili, said that the bank was not against of inspection, but expressed regret over what he called central bank’s muted reaction on police raid of Cartu Bank’s cash-in-transit van.

“As a former President of National Bank I was little bit surprised that yesterday’s – I won’t be afraid to use this term – vandal act was in fact left without reaction from the National Bank and the only reaction was to launch an inspection in the Cartu Bank. We are not against of the inspection, but it would have been better if the National Bank launched inspection after at least condemning what the law enforcement agencies did to the Cartu Bank,” said Javakhishvili, who was with the opposition National Forum, before Ivanishvili picked him up to lead his bank on October 17.