Deposit Insurance System in Georgia and World Trends

The deposit insurance system is one of the main challenges of Georgian Banking regulation, which serves as a safety pillow of financial stability. Over the past 5 years, Georgia has increased the minimum deposit insurance limit from 5,000 GEL to 15,000 GEL per bank in order to achieve greater stability in the financial market. Georgia has already made a decision to increase the limit to 30,000 GEL from January 1, 2024. We examined the impact of the deposit insurance system on the safety of customers of banking institutions by comparing the volume of accounts/deposits protected by the system with existing practices in neighboring economies. We find that increasing attention to the importance of deposit insurance has led to an increase in the interest of foreign depositors and investors in placing funds in Georgian banks, which contributes to the improvement of international ratings and creditworthiness of Georgian banks.