Public Defender urges National Bank to address financial strain on pensioners

The Public Defender of Georgia on Tuesday addressed the National Bank to instigate a resolution facilitating Liberty Bank to refinance pensioners’ obligations and reinstate the original payment schedule, following the postponement of loans due to the government’s COVID-19 recommendations.

The Public Defender’s office said it had discovered that the rights of pensioners were compromised as a consequence of the bank’s extending loans for several months amid the pandemic. The grace period, designed to provide relief, resulted in an extension of loan terms for elderly individuals, leading to a surge in accrued interest. Post the grace period, the revised payment schedule significantly elevated the repayment amounts, rendering the loans more burdensome for the elderly and prolonging the overall duration of the loan agreements.

Clarifications from the National Bank of Georgia revealed that customers, in activating the grace period, have the right to revert to conditions preceding the postponement, including the original payment schedule. However, obstacles arose as some elderly individuals lacked access to essential information, hindering their ability to engage with Liberty Bank. The intricate process of requesting a return to the old schedule and refinancing obligations requires specific knowledge, often posing a challenge for retirees, the Public Defender’s Office said. 

Highlighting additional concerns, the Public Defender expressed reservations about overdraft loans offered to pensioners by Liberty Bank. Despite the determination of an upper limit for the annual interest rate on loans from 2023 onwards, the interest rates were deemed inappropriately high for pensioners until that time. 

Consequently, loans taken prior to the new regulations will be recalculated with revised conditions and a lower interest rate, solely based on the appeals of pensioners. “This raises concerns about uneven information distribution”, the Public Defender’s Office said.