Expanded summary

At the end of the 20th century, important processes developed in the world, which led to break down of the command-administrative system and the beginning of the process of transition to a market economy in the former communist countries.

During the 70-year history, the politics of Georgia less relied on economic factors. Accordingly, Georgia faced to the end of the 20th century, without the mechanisms of economic policy formation.

For a sovereign state, the credit system is very important. The involvement of Georgia in the world system, the efficient functioning of enterprises and in general, the development of the state are directly related to the banking system.

In order to, implement necessary measures to overcome the economic crisis in Georgia, the banking system has an important role, because the country's economic development and macroeconomic stability are closely related to a reliable, solid and liquidity banking system.

The importance of the banking sector is increased by the fact, that the main indicator of the level of progress in the postindustrial society is the human development index, prosperity of the population and the dynamics of knowledge. The banking system has significant reserves, to ensure society's orientation on competitiveness, opportunities, knowledge, person, management and marketing.

Banking control is very important in market economy conditions. Banking activity control is internal and external control. External control is conducted by the National Bank and external auditors and internal control by the bank. Internal banking control is part of the bank management. These functions are fulfilled by managers and internal audit divisions. The main purpose of internal banking control is to reveal deficiencies in the bank's activities and to create an operational system to solve them. Internal banking control is related to external control and includes checking compliance with the legal acts of the National Bank, as well as internal banking instructions.

Commercial bank is the main entity in the field of monetary circulation, which mediates the movement of funds from lenders to borrowers and from sellers to buyers.

In the conditions of the market economy, to assessment the activity of a commercial bank, it is important to check the correctness of the bank financial statement. During the audit of the bank, all areas of the bank activities should be analyzed.

At the beginning of the audit, the auditor should compare the synthetic and analytical accounting data, to ensure the correctness of the reflection of accounting operations in the relevant reports and in the accuracy of the balance.

The inspection can be carried out in the following procedural sequence:

1. Checking the cash boxes and its operations;

2. Controlling the correctness of the statutory fund in terms of formation;

3. Study of correspondence and accounting accounts;

4. Checking of reporting and credit operations;

5. Studying the bank's incomes and expenses, as well as, rechecking the correctness of payment of taxes.

Particular attention should be paid to the compliance with the economic norms, which ensures the stable functioning of the banking system.

The results of activities of commercial banks in Georgia, for 2021 year are follows:

On December 31 of 2021, for commercial banks of Georgia, the primary capital coefficient calculated within the range of the capital adequacy framework was 15.58%, while the regulatory capital was 19.57%.

At the end of 2021, the total credit portfolio of the banking sector was 43 billion GEL and without the effect of the exchange rate, its annual growth was 18.2%.

In July of 2021, the National Bank updated the volume of net GRAPE buffers and the volume of individual GRAPE buffers, was from 1.5 percent to 9.2 percent of risk-weighted assets.

At the end of 2021, the aggregate currency position is within 2.6 percent, and because in the calculation of the mentioned position, total loans are partially taken into account in the assets, therefore, the real position of the banks is short.

As of 2021, ROE and ROA amounted 30.7% and 3.6% respectively. This is significantly higher than the indicators of the previous year, 1.8% and 0.2%. The prerequisite for this was the improved quality of the portfolio.

During the year 2021, the volume of liquid assets remained at a quite high level, and liquid assets was 21% of total assets, which was enough to cover almost 34% of non-bank deposits.

During the audit of commercial banks, should be checked the completeness of mandatory reserves, deposits and creation of insurance funds against bankruptcy of insurance funds.

It is very important, that the supervisor of commercial banks to be independent from political influence, so that, decisions to be made according to objective principles.

Keywords: Banking system; Market economy; Economic policy; Banking control.