The Georgian branch of Russia’s state-owned VTB Bank is no longer able to carry out transactions in U.S. Dollars, British Pounds, or Euros, after the U.S., UK, EU and other allies slapped sanctions on Russian financial institutions in response to the invasion of Ukraine.
The National Bank of Georgia said today as the regulator of commercial banks it has complied with the sanctions and restricted the VTB’s transactions in the relevant foreign currency.
In an original statement, the central bank expressed readiness to provide the Russian-owned bank with financial resources in case of liquidity needs.
But the passage disappeared in an updated statement.
In the new version, the central bank said it is observing the developments closely and stands ready to “protect the depositors’ interests by using instruments envisaged by international standards and [Georgian] legislation.”
According to the NBG, it will protect the “interests of the bank’s depositors, Georgian citizens,” as well as ensure the stability of Georgia’s financial system.
The VTB Bank Georgia branch on its part issued a statement claiming it had devised an action plan together with the NBG in case of sanctions.
It claimed the central bank stands ready to provide liquidity to the VTB Bank Georgia if necessary.
But the Russian bank’s Georgian branch asserted it has “the capacity to fully cover its obligations to the clients if needed,” with its assets exceeding more than 135% of the deposits it holds.
The bank said it continues its operations in Georgia and noted clients are able to withdraw their deposits or transfer their money elsewhere if they wish to.
Noteworthy, Georgian Prime Minister Irakli Garibashvili has announced the country will not be joining the international sanctions against Russia over the full-scale attack on Ukraine.
NB: This article was updated at 14:35, February 25, with an amended statement by the National Bank of Georgia after it seemingly took down the previous press release. The initial statement confirmed the central bank had devised an action plan with the Russian-owned bank, said that restrictions on foreign currency exchanges would be effective starting March 26, and reassured the public that VTB Bank Georgia remained “solvent.”