Savings clients and banks should pay deposit insurance

BELGRADE - Serbia's Finance Minister Dusan Vujovic has said that all banks and their clients with savings accounts will have to put some of their money into the Deposit Insurance Fund in the future, adding that the fund will mostly have independent members of the management board.

The board will have a representative of the National Bank of Serbia, an official of the government, and, at the Ministry of Finances' suggestion, three independent members, he said on Friday.

"These people would be skilled enough to control the work of the Deposit Insurance Agency," he told the parliament presenting the bill on the Deposit Insurance Agency.

The situation is such that the Agency has run out of funds, and the new bill would make this institution more transparent and cut costs of deposit protection, he stressed.
"The Agency and the Fund were beld dry, by banks going bankrupt, paying out deposit insurance... We had to intervene and we spent all the money," he stated.

That is why the government used funds from international organisations as well, mostly the World Bank, the International Bank for Reconstruction and Development and the European Bank for Reconstruction and Development, he explained.
"These organisations want us to adopt laws that will regulate deposit insurance and the Agency in a way that follows international standards," he stated.

The current legislation provides nominal protection for deposits no larger than EUR 50,000, but the mechanisms have not been defined that well, he said, underscoring that someone had to pay insurance for anyone to be insured.

photo Tanjug/R. Prelic