Directions for improving banking activities at the contemporary stage (საბანკო საქმიანობის სრულყოფის მიმართულებები თანამედროვე ეტაპზე)

Abstract

The banking sector is an integral part of the financial and credit system. Consequently, in order to promote economic growth in the country, it is necessary to move the economy to a new stage of interaction between the real and financial sectors, which is reflected in increased investment in the restructuring of production and the renewal of major industry funds. Due to the fact that the securities market in Georgia is almost underdeveloped, deposits are the predominant form of mobilization of financial resources in banks. Therefore, the task of banks is to create forms of attracting funds that will actually interest customers and develop their saving habit, which determines the investment opportunities of the economy. The basis of banks’ interaction with the industrial sector of the economy is their credit-investment and depositaccumulation strategy. The difference of the money market from all other markets is its monopoly nature; the monopolist is usually the National Bank. In the Georgian reality, inflation has long been only changing its magnitude and form. Inflation expectations are very high, which in itself is a strong inflation factor. Inflation is dangerous for a weak economy, but on the other hand, limiting inflation also creates difficult problems. Thus, the economic development of the country is highly dependent on the efficient operation of the banking sector. Accordingly, the article discusses the directions and prospects for improving banking activities, ways to increase credit and investment potential, etc.