Tabakovic: Better protection for bank clients, creditors

BELGRADE - Governor of the National Bank of Serbia (NBS) Jorgovanka Tabakovic said on Friday that the proposed amendments to the Law on Banks would contribute to better protection of depositors and creditors of banks which are experiencing problems in their conduct of business while requiring minimum budget expenditures.

Explaining the proposed set of amendments to the banking laws in the Serbian parliament, Tabakovic noted that the main goal of the amendments to the Law on Banks is embodied in the improvement of the legal framework for bank restructuring in view of preventive actions.

She noted that the novelties which the law will introduce can be divided into three sectors, i.e. preventive actions, early intervention and bank restructuring.

While the focus of attention in the first two areas rests on timely bank response to aggravation of business conditions, in the restructuring stage the responsibility shifts to NBS, Tabakovic said.

In the preventive stage, the bank is expected to update its recovery plan and propose measures or carry out the necessary changes in its conduct of business, the NBS governor said.

In case the bank business takes a turn for the worse despite the measures, NBS will propose the plan of restructuring if this step serves the public interest and before the procedure, the central bank will ensure an independent assessment of bank property values and liabilities, the governor explained.

Tabakovic also said that NBS can also dismiss the bank management and in case this step too proves insufficient, it can appoint a temporary manager.

The restructuring process will be launched in case relevant bodies decide that the restructuring would achieve one or more goals of public...