Financial resources required for compensation of insured deposits accumulate in the Deposit Insurance Fund, legal grounds for administration of which are defined under the Law of Georgia on Deposit Insurance System.

Pursuant to the Law, the main sources of the fund are represented by initial, regular and extraordinary insurance contributions made by commercial banks and microbanks operating in Georgia. The initial one-off contribution was defined in the amount of GEL 100,000 and it was paid by the commercial banks in December 2017 according to the Law. All newly established commercial banks and microbanks should pay the same one-off contribution within 30 days following receipt of the license.

Regular contribution represents a monthly insurance premium paid by commercial banks and microbanks. From July the 1st, 2020 the rate for monthly regular insurance premiums of insured deposits in the national currency is reduced from 0.067% to 0.03%. The rate for insured deposits in FX remains unchanged at 0.1%.

Extraordinary premium is used only if upon occurrence of an insurance case (when a bank is declared insolvent) there is no sufficient amount in the Fund to compensate insured deposits. The amount of extraordinary contribution shall not exceed 1% of the total insured deposits during one calendar year.

Fund resources are managed by the Deposit Insurance Agency in accordance with the law principles, approved investment policy and the annual investment plan. The Agency is entitled to outsource the Fund for management to the Treasury, a subordinated agency of the Ministry of Finance, as well as to the National Bank of Georgia. For the purpose of protecting the Fund and maintaining the liquidity, investment is based on the principles of diversification, security and adequate risk management and is made in GEL denominated securities issued only by the Government of Georgia, the National Bank of Georgia and International Financial Organizations.