A loan of EUR 145,3 mil for capital increase of the Agency for deposit insurance

The Assembly of Serbia received to confirm an agreement on the loan with International Bank for Reconstruction and Development (IBRD), totaling EUR 145, 3 mil (USD 200 mil) for capital increase of Agency for deposit insurance of Serbia.

According to the agreement published at the site of the Assembly, payment deadline is 18 years including a grace period of five years and the interest rate is a six-month euribor plus variable margin which at totals 0,27% at the moment.

Serbia will return a loan to IBRD, a member of the World Bank Group, in 26 successive semi year installments, every April 15 and October 15, starting from Aril 15 2019.

The Government of Serbia and IBRD signed an agreement on loan July 10, 2014, it was stated in the explanation of the agreement.

As it was said, the loan will strengthen financial and institutional capacities of the Agency for deposit insurance so that it carry out its duties with respect to deposit insurance and to serve as the central part of the financial sector security network.

It was reminded that the funds of the Fund for deposit insurance were spent in late 2012 and partially in 2013 to cover losses caused by bad business result of Nova Agrobanka and Razvojna banka Vojvodine (Development Bank of Vojvodina) as well as that the Fund has additional commitments to Postanska stedionica which took over liabilities of liquidated banks.

-Since the assets of the Fund for deposit insurance, after solving problems Nova Agrobanka and Razvojna banka Vojvodine faced in their business, were spent, it is evident that the deposit insurance system is not efficient and that it requires support – it was stated in the explanation of the agreement on IBRD loan.