The Deposit Insurance Agency is an independent legal entity of the public law (LEPL) that was established on July 24, 2017 in accordance with the Law of Georgia on Deposit Insurance System. The main function of the Agency is to insure the deposits of resident and non-resident individuals in all commercial banks operating in Georgia. In the event of the commencement of liquidation, insolvency or bankruptcy proceedings in any of the banks (according to the Law of Georgia on Activities of Commercial Bank), the Deposit Insurance Agency will ensure the reimbursement of deposits, up to the set limit, to depositors within 20 calendar days.
The Agency is led by the Head of the Agency. Otar Dzidzikashvili was selected through an open competition and appointed as the Head of the Agency in September 2017. The organizational structure of the Agency was formed in accordance with the best international practice. The Agency is composed of five employees including the Head, Financial Expert, Lawyer, Payout Expert and Administrative Specialist.
The Agency is supervised by the Supervisory Board comprised of the Minister of Finance, the Minister of Economy and Sustainable Development, the President of the National Bank of Georgia and two (2) independent members selected by commercial banks.
The Deposit Insurance Agency administers the deposit insurance system in the country and ensures its proper and effective operation. The deposit insurance system, together with the prudential regulation, liquidity support and effective supervision represents an important component of financial stability and safety and protects depositors from incurring losses (within the set limit).
The Deposit Insurance System is currently implemented and successfully operated in 146 countries, including all EU Member States and the United States. Events of the last decade provided clear evidence that the cases of bank insolvency are prevalent even in the most advanced economies despite the existence of well-developed regulators. These facts emphasize once again the importance of the system. The system was implemented in Georgia with the support of the World Bank and based on the Core Principles for Effective Deposit Insurance Systems.
Depositor will retain the right to claim compensation from the Agency for 3 years following occurrence of the insurance case. After expiry of this term, the amount due to depositor will be directed to the National Bank for compensating depositor in accordance with the Georgian legislation.
The funds accumulated in the Deposit Insurance Fund are managed by the Deposit Insurance Agency in accordance with the investment policy. Also, it is entitled to outsource the Fund for management to the Treasury of the Ministry of Finance or the National Bank. Investment policy is based on the principles defined in the legislation according to which the Fund resources will be invested in risk-free assets. Profit generated from investment will be transferred also to the Fund’s account.