EVOLUTIONARY ASPECTS OF THE GEORGIAN BANKING SYSTEM

Abstract

Georgian monetary relations have a centuries-old history. Credit associations were first founded in 11-13^th centuries. Network of credit institutions became larger in the 19^th century – independent commercial banks were established in the second half of the 19^th century. Central State Bank of Georgia was established in the Democratic Republic of Georgia in the beginning of the 20^th century. At the same time, there were efforts to create independent two-level banking system, although those efforts failed due to forceful sovietization of Georgia. But still, independent banking system was founded in Georgia after the collapse of the former Soviet Union. This work examines afore-mentioned evolutionary processes and some of peculiarities of modern banking system. The research shows that modern Georgian banking system is growing fast but it contains signs of oligopoly which contradicts the interests of vast masses of population and entrepreneurial development, while stimulating retaining of high interest rates and devaluation of national currency.