The banking system of the Republic of Abkhazia developed independently since the adoption of the laws “On the National Bank of the Abkhaz SSR” and “On Banks and Banking of the Abkhaz SSR” passed by the Supreme Soviet of the Abkhaz SSR on February 28, 1991. The Banking system of the Republic of Abkhazia was founded on the basis of the Abkhaz Republican Bureau of the State Bank of the USSR. These laws made it possible to determine the need for banking institutions in the interests of the economy of Abkhazia.
At the beginning of 1991 with the adoption of these laws the banking system of Abkhazia was presented by the Abkhaz Republican Bureau of the USSR Banks: the State Bank, the Savings Bank, the Promstroibank, the Agrarian Bank and the Zhilsotsbank. The creation of credit institutions was allowed, but the process was governed by the USSR legislation. In essence, the whole banking system was based on a vertical scheme of management and it could not account the interests of regional economic development.
The laws adopted in February 1991 by the Supreme Council of Abkhazia gave the opportunity to create the banking system at the regional level, particularly a network of credit institutions, that could be established by legal entities and private individuals concerned in development of separate branches of the economy as well as the region in whole. By the beginning of the war in Abkhazia (14 August 1992) the banking system was diversified.
The hostilities in Abkhazia destroyed the existing economic potential of the country and resulted in destruction of the well-established banking system.
After the war in Abkhazia out of all pre-existing banks only the Central Bank and four regional banks preserved: one - in Gagra region, two - in Gudauta region and one in Tkuarchal. All other banks were abolished or self-dissolved.
During 1994, the Central Bank of Abkhazia registered thirteen credit institutions, that on the basis of the license proceeded to business in all regions of Abkhazia: in Gagra region - «Gagra-Bank»; in Gudauta region - «Gudauta-Bank» and «Agrarian Bank»; in Sukhum region - Sukhum regional bank «Eshera»; in Sukhum - 5 Banks: «Sukhum-Bank», «Garant-Bank», «Bashnyh-Bank», «Tiko Bank» and «Menatep-Sukhum» (affiliate office of the Bank «Menatep»); in Gulrypsh region - «Prestige»; in Ochamchyra region - «Ochamchyra Commercial Bank»; in Gal region - «Gal-Bank» and in Tkuarchal region - «Tkuarchal-Bank». The same year the Government of Abkhazia authorized the Savings Bank activities.
The National Bank of the Republic of Abkhazia was founded under the decree of the President of the Republic of Abkhazia on 11 February 1995 on the basis of the Central Bank of the Republic of Abkhazia.
The same year the National Bank established the Cash Settlement Center (CSC) that intensified the money turnover in the National economy through the ordering of interbank calculations, as well as the cash flow control through the banking system.
During 1995 - 1996 years the National Bank registered three commercial banks: in Sukhum - «Apra-Bank» and «Invest-Bank», in Gudauta region - «Leon-Bank». Thus, by the end of 1996 there operated 16 credit institutions in Abkhazia, seven of which - in Sukhum. In 1998, the Savings Bank activities were legally formalized.
Consummated on January 1, 1999 new laws that regulate banking «On the National Bank of the Republic of Abkhazia (the Bank of Abkhazia)» and «On Banks and Banking» more specifically identified the structure of a bimodal banking system: the National Bank of Abkhazia is at the upper level and credit institutions are at the second level, as well as the tasks and functions of the banking system, the responsibility of credit institutions for infraction of mandatory standards and other indicators established by the National Bank, regulating the activity of credit institutions.
For over 20 years of activities (from 1991 to 2010), 23 credit institutions have been registered by the Bank of Abkhazia, of which 8 credit institutions have been eliminated.
As at January 1, 2011 the banking system is represented by the National Bank of the Republic of Abkhazia, 15 credit institutions, including the Savings Bank of the Republic of Abkhazia.
The wide network of the banking system indicates an increase in banking services, which contributes to expeditious performance of banking transactions by order of clients.