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Banks took away targeted state allowances for socially vulnerable individuals

16.11.2020

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Manana Vardiashvili

The Anti-Crisis Plan providing allowances to the individuals affected by the coronavirus pandemic was presented by the Georgian Government on April 24, 2020 after the first wave of the coronavirus affected Georgia. According to the Plan, for the implementation of which the Government of Georgia spent GEL 3.5 billion, the allowances should have been paid to the self-employed individuals left without jobs, children under 18 years of age, the socially vulnerable persons and those with severe disabilities. 

It is evident from the practice of legal aid provided by the lawyers of Human Rights Center (HRC) that part of the money allocated for the social needs of the persons could not reach the beneficiaries. 

As a serious problem we can outline the cases when some of the Banks took the credited allowances of socially vulnerable individuals to offset their debts. Among them is Marina K. living in Lanchkhuti. She applied to HRC to assist her in obtaining the due allowance. 

Marina K. is socially vulnerable. At the same time she takes care of her brother, a person with disabilities. Under the State Anti-Crisis Program announced on April 24, 2020, the State paid her and her brother a six-month allowance of GEL 90 per month to alleviate the damage caused by the Coronavirus pandemic. 

The State began to pay her the allowance from June 2020. The money was credited to Marina’s account in Liberty Bank. However, Marina did not receive a single penny out of GEL 540 paid by the state as all the money was taken by Liberty Bank to offset her debt.  

The Ordinance N286 of the Government of Georgia provides for the amount of allowances and the procedure of payment to the citizens affected by the coronavirus pandemic and stipulates that the allowances provided under the Anti-Crisis Program may not be seized and may not be subject to the "measures ensuring the payment of tax arrears under the Tax Code of Georgia." As one of such measures can be considered the seizure of the money because of the debt. Liberty Bank did not take the above provision into account and seized all targeted social allowances to socially vulnerable individuals," said Eka Lomidze, a lawyer within HRC. 

Response by Liberty Bank

According to Liberty Bank, on March 28, 2017, Marina K. received a 4-year loan from the bank. This was a pension loan, she withdrew GEL 2443 from the bank in advance. The interest rate of the loan is 41.49 percent. To repay the loan, Marina had to credit GEL 90 every month. Due to the difficult economic situation, Marina has not been able to repay the loan since February 2019. 

According to Liberty Bank, they had the full right to deduct the targeted social allowance from Marina's account. The bank refers to one of the clauses of the agreement concluded with the customer when issuing the loan envisaging  that in the case she (the customer) has any problems in repaying the loan, she agrees the amount of money transferred to her account “to be deducted” including social allowances as she received the loan under the  guarantee of the social allowance i.e. the State pension. 

HRC lawyer Eka Lomidze says that many socially vulnerable persons like Marina did not receive the targeted social allowances: "The main goal of the Anti-Crisis Plan was to help the population affected by the coronavirus pandemic. However, it turned out that the goal was not achieved because the allowances paid by the State did not reach many recipients at all and the money that was to be used by the extremely needy people to alleviate their difficult economic situation was used to cover their bank liabilities. This is a systemic flaw. The state should have strongly recommend that the allowances paid  to socially vulnerable citizens not to be used to service bank debts. The private sector must take seriously the social responsibility for the citizens, especially Liberty Bank must do so as the Bank  on the one hand contributes a considerable amounts to the special fund set up to help the pandemic-affected population, and on the other hand does not allow Marina K. and other persons in similar condition to benefit from the allowance of GEL 90 paid by the State."

HRC applied to the National Bank of Georgia, Liberty Bank JSC and the Interagency Coordinating Council for Coronavirus with a request to credit Marina K. with the targeted social allowance she is entitled to. The case has not been heard yet by the agencies.


HRC implements the project „Free Legal Advocacy and Human Rights Monitoring after the Coronavirus Pandemic“ with support of the Embassy of Netherlands to Georgia. The goal of the project is to identify and raise awareness of the alleged facts of human rights violations during the state or emergency aimed at the prevention of spread of the Coronavirus pandemic in five regions of Georgia: Shida Kartli, Kakheti, Kvemo Kartli, Imereti and Samegrelo. 

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