Risk Management Effective Strategies for Commercial Banks in Georgia

The proper functioning of the banking sector directly affects the financial stability of our country as it is the main investor of business in Georgia and an important player in economic processes.
The main goal of commercial banks’ risk management is predicting the expected risks as accurately as possible, proper planning and ensuring financial stability by this way. Effective risk management contributes to the sustainability of all three: the costumer, the bank and the entire financial sector at the same time.
The recent increase in the level and scale of risk, which, along with other sectors of the economy and business, has had a major impact on the banking sector, has added even more importance to bank risk management and put the need for new strategies on the agenda. The need to develop and implement various alternative methods of loss reduction is growing, and the issue of their correct analysis is moving to its higher level. Thus the study of this issue is too relevant in today’s reality.
The thesis “Risk Management Effective Strategies for Commercial Banks in Georgia” presents an analysis of the existing management policy and develops ways to increase its effectiveness. There is a review of a post-crisis action plan and steps were taken to enable commercial banks operating in Georgia to overcome the negative consequences of the COVID-19 pandemic. There are also developed certain viewpoints about necessary changes in banking policy to improve the strategies considering the current situation and future prospects.
The aim and the objective of the research are to analyze the role of efficient risk management in the banking sector, the effectiveness and shortcomings of existing risk management strategies. Also there is reviewed the involvement of the National Bank in identifying and managing the commercial bank risks and the prospects for tackling the impedances caused by the pandemic crisis.
The findings and recommendations from the research will promote forming new approaches and capability building of risk management. These in turn will have a direct impact on improving the performance of the banking sector.