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Law on Deposit Insurance ("RS Official Gazette", No. 61/2005,116/08 and 91/2010) In order to view this document you will need software that can open PDF files such as Adobe Reader. Adobe Reader is free software which you can download directly from the Adobe Reader site.  Download Adobe Reader I BASIC PROVISIONS
Article 1
This Law regulates the statutory insurance of Deposits of natural persons, Entrepreneurs and Small and Medium-Sized Companies in Banks for the purpose of protection of these persons’ deposits and maintaining financial stability in the Republic of Serbia.
In the event of bankruptcy or liquidation of a Bank, the Agency responsible for Deposit insurance, established by a separate law (hereinafter: the Agency), shall pay the deposits of the persons referred to in paragraph 1 of this Article up to the Insured Amount, in accordance herewith.
Article 2
For the purpose hereof, specific terms will have the following meanings:
1) Deposit means RSD or foreign currency credit balance which derives from a money deposit, a savings deposit, a current account or any other account, and which a Bank must repay under the legal or contractual conditions applicable;
2) Insured Deposit means the deposit of a natural person, an Entrepreneur and a Small and Medium-Sized Company insured with the Agency, and which will not include deposits:
1) of legal or natural persons connected with the Bank, according to the law which regulates banks,
2) coded or bearer deposits,
3) related to transactions used for money laundering or for funding terrorism, in accordance with the law governing prevention of money laundering and/or terrorism financing;
3) Insured Amount is the amount of an Insured Deposit up to EUR 50.000 per depositor, determined after the set-off between the depositor and the Bank, i.e.:
(1) for RSD deposits – in RSD equivalent at the official middle exchange rate on the date of the decision made by a competent court on institution of bankruptcy or liquidation proceedings,
(2) for foreign currency deposits which are not denominated in EUR – in the equivalent of the currency in which these deposits are denominated, at the EUR exchange rate to that currency, calculated at the official middle exchange rate of RSD to EUR and official middle exchange rate of RSD to that currency, on the date of rendering of the decision of a competent court on institution of bankruptcy or liquidation proceedings;
4) Bank has the meaning prescribed by the law which regulates banks;
5) Entrepreneur has the meaning prescribed by the law which regulates companies;
6) Small and Medium-Sized Enterprises have the meaning prescribed by the law which regulates accounting and auditing.
Article 3
Banks must ensure the deposits of natural persons, Entrepreneurs, Small and Medium-Sized Companies with the Agency.
Based on the decision of the National Bank of Serbia, a branch office of a Serbian bank in a foreign country shall insure deposits of natural persons, Entrepreneurs, and Small and Medium-Sized Companies with the Agency in case:
1) it has not insured deposits in the country in which it operates;
2) it has insured deposits in the country in which it operates, and the National Bank of Serbia has determined that such insurance system is less favourable to depositors than the deposit insurance system prescribed hereby.
Article 4
The Agency insures deposits up to the level of the Insured Amount.
The Insured Amount prescribed by the law can be increased by the Government, only after the National Bank of Serbia and the Agency announce that an increase is necessary for the purpose of maintaining financial stability.
The Republic of Serbia shall guarantee the liabilities referred to in paragraph 1 of this Article.
With a view to securing the stability of the financial system, upon the proposal of the ministry in charge of finance or the National Bank of Serbia or the Agency, and after obtaining the opinion of the other two institutions which are not the proponents, the Government may render a decision by which it will provide enhanced protection of depositors in a determined period of time (increase of Insured Amount and/or extension of the scope of depositors whose Deposits are considered insured).
Article 5
The Agency shall adopt regulations under its legal remit.
Article 6
The Agency and the National Bank of Serbia shall share information regarding deposit insurance.
The National Bank of Serbia shall timely inform the Agency about the measures undertaken in the procedure of supervision of the Banks’ credit worthiness and lawfulness of their operations.
II DEPOSIT INSURANCE FUND
Article 7
In order to ensure the Deposit insurance funding, the Agency shall establish a special fund (hereinafter: “the Deposit Insurance Fund”).
The Deposit Insurance Fund shall be financed from: deposit insurance premiums paid by Banks, revenues from investments of the Deposit Insurance Fund’s assets, the Agency’s claims recovered from the bankruptcy or liquidation estates of banks on the basis of the insured deposits, sale of a bridge bank, recovery of claims on the basis of initial capital from the bankruptcy or liquidation estates of bridge banks, borrowings, grants, and funds from the budget of the Republic of Serbia.
The assets of the Deposit Insurance Fund shall be used for the payout of the Insured Amounts in case of bankruptcy or liquidation of a Bank, for the payment of administrative costs related to the payout of the Insured Amounts and management of the Deposit Insurance Fund assets, as well as for the repayment of the funds borrowed for the above purposes.
Notwithstanding paragraph 3 of this Article, Deposit Insurance Fund’s assets may be used, as per Government regulation, to provide financial support to Banks, in accordance with the law governing the Agency, and to establish bridge banks in line with the law governing banks.
The assets of the Deposit Insurance Fund shall not be the subject of execution.
Article 8
The Agency shall keep the assets of the Deposit Insurance Fund in a special deposit account with the National Bank of Serbia.
The Agency invests the RSD assets of the Deposit Insurance Fund in debt securities issued by the Republic of Serbia or the National Bank of Serbia.
Based on the decision of the Agency Managing Board and the contract concluded with the Agency and at the order of the Agency, the National Bank of Serbia will invest foreign currency assets of the Deposit Insurance Fund in foreign securities or in deposits with foreign Banks, on its own behalf and for the account of the Agency, pursuant to the policy of foreign currency reserve management.
Deposit Insurance Fund’s assets shall be invested in a way that would help mitigate risk, maintain liquidity of this Fund and generate adequate revenue.
III INSURANCE PREMIUMS
Article 9
Banks shall pay insurance premiums (hereafter: ''the Premium'') to the Agency in the manner and time frames prescribed by the Agency.
The Agency may determine the insurance premium in accordance with the total risk balance in the bank.
Banks shall deliver to the Agency monthly reports on total and insured deposits as well as other data the Agency may need for performing its activities determined by the Law, in the manner and time frames prescribed by the Agency.
The Agency or a person acting on behalf and for the account of the Agency may directly review the bank’s documentation in order to verify the accuracy of the submitted reports and data referred to in paragraph 3 of this Article.
Banks shall facilitate access to their documentation to the authorised persons referred to in paragraph 4 of this Article and cooperate with them.
Article 10
Each Bank must pay the premiums from the day of its inscription into the Register of Business Entities until the day of rendering of the decision to revoke the bank's operating license by the National Bank of Serbia.
Article 11
Banks must pay an Initial Premium, a Quarterly Premium, and an Extraordinary Premium.
Article 12
The Initial Premium shall be paid by Banks within 45 days of the day of their inscription into the Register of Business Entities.
The Initial Premium shall be 0.3% of the pecuniary part of the Bank’s minimum initial capital.
Article 13
The Quarterly Premium rate for the following year shall be determined by the Agency no later than by 30 September of the current year, taking into account the situation in the banking and financial system in the Republic of Serbia, the degree of its risk exposure, as well as the amount of assets in the Deposit Insurance Fund.
The Quarterly Premium will be maximum 0.1% of total Insured Deposits in Banks.
The Agency will calculate and collect the Quarterly Premium, based on the average total Insured Deposits in Banks in the previous quarter.
The Agency will calculate and collect the Quarterly Premium in RSD for RSD deposits and in Euro for foreign currency Deposits - at the exchange rate of Euro to a specific foreign currency on the date of the calculation of this premium.
If the assets in the Deposit Insurance Fund reach 5% of total Insured Deposits, the Agency may discontinue the calculation and collection of the Quarterly Premium.
Article 14
If the funds in the Deposit Insurance Fund are insufficient for the payout of the Insured Amounts, additional funds may be ensured by collecting Extraordinary Premium, based on the decision of the Agency.
The aggregate annual Extraordinary Premium rate shall be maximum 0.4%.
The Agency shall calculate and collect the Extraordinary Premium based on the most recent determined average total Insured Deposits referred to in paragraph 3 of Article 13 hereof , in the manner referred to in paragraph 4 of this Article.
Article 15
If the Agency assesses that the Deposit Insurance Fund’s assets are insufficient for the payout of the insured amounts, the Agency may obtain additional funds:
1) from the budget of the Republic of Serbia,
2) from domestic and international borrowings guaranteed by the Republic of Serbia,
3) by issuing debt securities guaranteed by the Republic of Serbia,
4) from other sources specifically allotted for this purpose by the Republic of Serbia.
Decision on providing the funds referred to in paragraph 1 of this Article shall be made by the Government, on the Agency’s request.
IV REIMBURSEMENT OF THE INSURED AMOUNT
Article 15a
The Agency shall reimburse the Insured Amounts in the event of institution of bankruptcy or liquidation proceedings over a Bank, in compliance with the law governing bankruptcy and liquidation of banks.
In case another Bank or a bridge bank has purchased some or all assets and assumed liabilities of a Bank in administration, in accordance with the law governing bankruptcy and liquidation of banks, and all Insured Deposits have been transferred to the assuming bank, the Agency shall not be obliged to reimburse the Deposits exceeding the transferred Insured Amount in the course of bankruptcy or liquidation proceedings over the Bank.
Article 16
Banks shall make the data on depositors and their Deposits available to the Agency at all times.
According to the data from paragraph 1 of this Article, the Agency shall determine the level of the Insured Amount per depositor, based on the balance of all Deposits of such depositor with the Bank on the day of the decision of a competent court on instituting bankruptcy or liquidation proceedings over the Bank, including the contractual interest calculated until the day of that decision.
A depositor’s claim from the bank, based on Deposit insurance, will be set-off against the depositor’s total due financial obligations towards the bank, inclusive with the day of the decision referred to in paragraph 2 of this Article, and the Insured Amount of that depositor will be the net claim resulting from that set-off.
The Agency shall set in detail the rules governing the determination of the Insured Amount referred to in paragraphs 2 and 3 of this Article.
The Agency must select a Bank to pay out the Insured Amounts on behalf and for the account of the Agency, based on the results of a public tender, in the shortest term possible, and close a contract with that Bank.
The Agency shall inform depositors via the mass media about their rights and obligations, the date and the place of the payout of Insured Amounts, and to start the payout of Insured Amounts within 3 days of the day of the decision referred to in Paragraph 2 of this Article.
Article 17
Depositors have the right to request the payout of the Insured Amount from the Agency, and the Agency is obliged to pay the Insured Amount within 30 days from the day of submitting the request.
Depositors are obliged to submit a document as a proof of validity of their claim (cash deposit, savings deposit, current account, savings book, decision on inheritance, etc.) with the request referred to in paragraph 1 of this Article.
The request referred to in paragraph 1 of this Article cannot be submitted after the expiration of three years from the day of the decision by a competent court on institution of bankruptcy or liquidation proceedings over the Bank.
The Agency shall pay out the Insured Amounts for RSD deposits in RSD, and for foreign currency deposits in EUR – at EUR exchange rate to a specific currency calculated by using the official middle exchange rate of RSD to EUR and official middle exchange rate of RSD to that currency which is valid on the date of rendering of the decision referred to in paragraph 3 of this Article.
In case a depositor has Deposits in both RSD and foreign currency, the Agency shall pay out the Insured Amount proportionally according to the foreign currency structure of the depositor’s total deposits in the bank in RSD and EUR.
A Depositor has no right to request payout of the Insured Amount if the Insured Amount was paid during liquidation proceedings prior to the opening of bankruptcy proceedings.
Article 18
Depositors’ claims based on deposit insurance are assigned to the Agency.
The Agency will settle claims under paragraph 1 of this Article from the bankruptcy or liquidation estate, in compliance with the law regulating the bankruptcy or liquidation of banks.
Depositors, whose claims against a Bank exceed the Insured Amount, will have the difference between their claim and the Insured Amount settled in the course of bankruptcy or liquidation procedure.
Article 19
Banks shall disclose the information regarding the deposit insurance determined hereby to actual and prospective depositors, especially the information concerning the coverage level and the procedure of the Insured Amount payout.
The information referred to in Paragraph 1 of this Article must be available in a readily comprehensible manner and in written format.
Banks may not advertise the information referred to in paragraph 1 of this Article or use it in a way that might affect the stability of the banking system or the depositors’ confidence.
The Agency will issue separate regulations prescribing the procedures for dissemination and content of the information referred to in paragraph 1 of this Article.
V. REPORTING BY THE AGENCY
Article 20
The Agency shall record the data related to the Fund in its accounts and reports separately.
As part of the audit of its annual statement, the Agency shall facilitate the audit of the data referred to in paragraph 1 of this Article.
The Agency’s performance report for the previous year must also include the deposit insurance report.
Article 20a
If a bank fails to timely fulfil its obligations as prescribed by this Law or by the Agency regulation enacted on the basis hereof, the Agency shall notify the National Bank of Serbia of this occurrence, and the National Bank of Serbia shall take appropriate measures in accordance with the law.
VI PENALTY PROVISIONS
Article 21
A bank may be fined from RSD 100,000 to 2,000,000 for an offence if:
1) it fails to pay the premium in the manner and within the timeframes set by the Agency (Article 9, paragraph 1);
2) it fails to submit monthly reports on total and Insured Deposits or any other data that the Agency may require to perform its activities as prescribed as per the law, in the manner and within the timeframes specified by the Agency (Article 9, paragraph 3);
3) it fails to provide direct access to the bank’s documentation to the authorised persons representing the Agency, for the purpose of verifying the accuracy of the submitted reports and data referred to in paragraph 3, Article 9 hereof or fails to cooperate with these persons (Article 9, paragraph 5);
4) it fails to provide information to depositors and any other interested party about Deposit insurance as prescribed herein, in accordance with the Agency’s regulation (Article 19, paragraph 1);
5) it uses the information related to Deposit insurance prescribed hereby for advertising purposes in a way that may affect the stability of the banking system and depositors’ confidence (Article 19, paragraph 3).
The responsible person in the bank may also be fined from RSD 20,000 to 150,000 for any of the offences referred to in paragraph 2 of this Article.
VII TRANSITIONAL AND FINAL PROVISIONS
Article 22
The initial resources of the Deposit Insurance Fund in the amount of RSD 700.000.000 shall be provided from the budget of the Republic of Serbia for 2005.
The existing resources of the Insurance Fund of the Agency for Deposit Insurance and Rehabilitation, Bankruptcy and Liquidation of Banks (''Official Gazette of SFRY'', Nos. 84/89, 63/90, 21/91, and ''Official Gazette of FRY'', No. 53/2001) shall be transferred to the special account of the Deposit Insurance Fund within 15 days from the day of opening of the account referred to in paragraph 1 of Article 8 hereof.
Article 23
The Initial Premium shall be paid by banks entered into the register of legal entities after this Law enters into force.
Article 24
The Quarterly premium rate for 2005 shall be 0.1 %.
Article 25
This Law shall enter into force on the eighth day from the date of its publication in ''Official Gazette of the RoS''.
Separate Articles of the Law on Amendments and Supplements to
the Law on Insurance Deposits
(“Official Gazette of the RoS”, No. 116/2008)
Article 8
Banks shall effect payment of Deposit Insurance Quarterly Premium for the first quarter of 2009 based on the information on total and Insured Deposits, according to the Law, and on the basis of the data from the fourth quarter of 2008.
Article 9
This Law will enter into force on the day following the date of its publication in ''Official Gazette of the RoS''.
Separate Article of the Law on Amendments and Supplements to
the Law on Insurance Deposits
(“Official Gazette of the RoS”, No. 91/2010)
Article 17
This Law shall enter into force on the eighth day following the date of its publication in “Official Gazette of the RoS”. |
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