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Georgian National bank vows to assist sanctions-hit VTB Bank

25 February 2022
A branch of VTB Bank in Georgia. Image via VTB Georgia.

Georgia’s National Bank announced on Friday morning that they would provide financial assistance to the Georgian branch of Russia’s VTB Bank, before removing their statement in favour of a more vague promise to protect the interests of bank depositors.

The US, EU, and United Kingdom imposed sanctions on several Russian banks, including the state-owned VTB bank, over Russia’s large-scale invasion of Ukraine on Thursday.

The sanctions include a ban on these banks from making transactions in dollars, euros, and other foreign currencies.

In their initial statement on Friday, the National Bank said they had previously developed an ‘action plan’ in the event sanctions were imposed on VTB, and that as a result, both banks were ‘fully prepared for the current situation’.

They said they came up with the plan in order to ‘neutralise the potential risks’, though they did not specify what those risks were or to whom.

‘In the event of a need for additional liquidity, the [National Bank] is ready to provide [VTB Georgia] with appropriate financial resources’, their since-deleted statement said.

Hours after their statement was released, the National Bank removed it from their website replacing it with a new statement that made only vague references to using ‘instruments provided by law’ to assist Georgian clients of the bank.

‘Our task is to protect the interests of bank depositors, citizens of Georgia, and to take care of the stability of the country’s financial system, taking into account the fulfilment of the conditions of sanctions’, they said.

‘That is why the National Bank is intensively monitoring events and is ready, if necessary, to protect the interests of the bank’s depositors by using international standards and instruments provided by law.’

In a statement provided to OC Media before the National Bank removed their initial announcement, VTB Georgia confirmed that the National Bank had offered to provide ‘appropriate resources’ if they needed additional liquidity.

They said the bank was prepared to fully repay all obligations to clients, including transferring funds to other banks or making cash withdrawals or payments.

The National Bank did not respond to an email request for comment, while their spokesperson had turned off their phone as of Friday afternoon.

Also on Friday, Georgian Prime Minister Irakli Gharibashvili said he would not join Western sanctions against Russia, citing Georgia’s ‘national interests’.

[Read more: Georgian government refuses to introduce sanctions on Russia]

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