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Law on the Deposit Insurance Agency ("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 GENERAL PROVISIONS
Article 1
There is hereby established the Deposit Insurance Agency (hereinafter: “the Agency”).
Article 2
The Agency is a legal entity with rights, obligations and responsibilities as stipulated by this Law and the Statute of the Agency.
The Agency shall have the status of a public agency.
The head office of the Agency shall be in Belgrade.
Article 3
The Agency shall conduct the operations pertaining to the statutory deposit insurance, in accordance with the law governing deposit insurance.
In addition to the operations referred to in paragraph 1 of this Article, the Agency shall:
- provide financial support to banks in accordance herewith, including the granting of loans;
- act as a bank administrator in line with the law governing bankruptcy and liquidation of banks and insurance companies;
- establish bridge banks in line with the law;
- act as a bankruptcy or liquidation administrator in banks and insurance companies in line with the law regulating bankruptcy and liquidation of banks and insurance companies;
- participate in management of the banks in which the Republic of Serbia is a shareholder and organise and implement the procedure of sale of shares of such banks in compliance with the law and other regulations;
- organise and implement privatisation of the socially-owned capital and sale of the state-owned capital in insurance companies in line with the law regulating insurance;
- collect receivables on behalf of and for the account of the Republic of Serbia in line with the law and the Government regulations, and
- conduct other activities set by the law.
Article 4
The Agency shall have its Statute, approved by the Government.
The Statute of the Agency shall regulate the:
1. organisation and manner of performing the Agency activities,
2. the Agency bodies’ remit,
3. representation of the Agency,
4. data and documents that are considered a business secret, and the manner of dealing with such data and documents,
5. other matters of importance for the Agency’s activities.
The Statute of the Agency shall be published in “Official Gazette of the Republic of Serbia”.
II OPERATIONS OF THE AGENCY
1. Deposit Insurance
Article 5
The Agency insures deposits with banks under the terms and in the manner set by the law governing deposit insurance.
1a Provision of Financial Support to Banks
Article 5а
The Government, upon the Agency’s proposal, shall decide on approving financial support to:
- banks which purchase some or all assets of a bank in administration and assume its liabilities,
- bridge banks,
- banks which purchase some or all assets of a bridge bank and assume its liabilities, in accordance herewith.
The Agency shall conclude an agreement with the bank to which financial support referred to in paragraph 1 of this Article is provided, specifying in detail the manner and conditions of use of financial support.
Financial support referred to in paragraph 1 of this Article may not be provided to a bank in receivership or to a bank whose operating license has been revoked.
Article 5 b
The Agency shall submit to the Government a proposal for approval of financial support referred to in Article 5a, paragraph 1 hereof, only in case the amount of the proposed financial support is substantiated by the result of the least cost test.
Along with the proposal to the Government referred to in paragraph 1 of this Article, the Agency shall submit the report on the least cost test result attesting that the total amount of financial support to be provided by the Agency is lower than the total amount the Agency would require to pay out the insured depositors.
Notwithstanding paragraph 1 of this Article, the Agency is not obligated to conduct the least cost test in case the assets and liabilities of a bank in administration are transferred to a bridge bank.
The Agency may conduct the least cost test in a bank in receivership during the receivership by reviewing the bank’s documentation.
Detailed conditions and manner of determining the least cost referred to in paragraph 1 of this Article shall be prescribed by the Agency.
Article 5c
Financial support referred to in Article 5а hereof shall be provided from the following sources:
1) budget of the Republic of Serbia,
2) the Agency’s funds,
3) grants,
4) other sources.
The Agency shall provide financial support to a bank referred to in Article 5а by:
1) granting loans,
2) providing non-refundable aid for reimbursing insured depositors,
3) purchasing the bank’s debt instruments,
4) depositing funds.
In case the funds for financial support referred to in Article 5a hereof are unavailable, the Agency may resort to borrowings, covered by the Republic of Serbia guarantee.
Provisions of the law governing public procurements shall not apply in the process of acquisition of funds for financial support referred to in Article 5a hereof.
1b Role of Bank Administrator
Article 5d
The Agency shall act as bank administrator in accordance with the law governing bankruptcy and liquidation of banks and insurance companies.
2. Role of Bankruptcy or Liquidation Administrator
Article 6
The Agency acts as a bankruptcy or liquidation administrator of banks and insurance companies in bankruptcy or liquidation proceedings, in accordance with the law governing bankruptcy and liquidation of banks and insurance companies.
3. Acting on Behalf of the Republic of Serbia
Article 7
The Agency shall participate in the management of banks in which the Republic of Serbia is a shareholder by monitoring operations of those banks and their bodies, and conducting other activities on behalf and for the account of the Republic of Serbia, in accordance with the Law and other regulations.
Article 8
The Agency shall organise and conduct sale of shares of banks referred to in Article 7 hereof, owned by the Republic of Serbia, on behalf and for the account of the Republic of Serbia, in accordance with the Law and other regulations.
Article 9
In accordance with the Government regulation, issued upon the proposal of the National Bank of Serbia, the Agency may take the following actions in banks:
1. cover potential losses,
2. assume, purchase or otherwise acquire bad assets,
3. manage and sell bad assets.
In order to cover potential losses referred to in paragraph 1, item 1 of this Article, the Republic of Serbia may issue bonds.
Article 10
The Agency shall organise and implement the privatisation of the socially-owned capital and the sale of the state-owned capital in insurance companies, in compliance with the law regulating insurance.
Article 11
The employees of the Agency who are involved in the Agency activities referred to in Articles 7 – 10 hereof cannot possess shares, initial capital or debt securities of the banks in which the Republic of Serbia is a shareholder.
III THE AGENCY FUNDS
Article 12
The funds that the Agency uses for its operations shall consist of the deposit insurance fund assets (hereinafter “The Fund”) and the funds that the Agency uses to conduct the activities referred to in Article 3, paragraph 2 hereof.
Article 13
The Agency shall provide funds for Deposit Insurance Fund in accordance with the law governing deposit insurance.
The increase or decrease of the Deposit Insurance Fund shall be commensurate with the amount of profit or loss resulting from management of the funds referred to in paragraph 1 of this Article and determined in accordance with provisions of the law governing accounting and audit.
Article 14
The Agency shall secure the funds for the activities referred to in Article 3, paragraph 2 hereof, from the revenues generated from its operations, fees in accordance with the law regulating bankruptcy and liquidation of banks and insurance companies, from grants, Republic of Serbia budget, domestic and international borrowings and in other manners in compliance with the law.
The Agency may keep the RSD funds referred to in paragraph 1 of this Article in a sub-account with the Treasury Administration.
Foreign currency funds referred to in paragraph 1 of this Article shall be kept by the Agency in a special account with the National Bank of Serbia. The foreign currency funds of the Agency may be kept in accounts with banks subject to consent of the ministry in charge of finance.
Article 14а
In case the funds referred to in Articles 13 and 14 hereof are not sufficient for conducting the Agency’s operations, the Government shall render, in urgent procedure and upon the Agency’s request, a decision on provision of funds from the budget of the Republic of Serbia or from domestic or foreign borrowings, based on the regulation enacted by the National Assembly.
The National Assembly of the Republic of Serbia shall enact the regulation on the approximate amount of borrowings referred to in paragraph 1 of this Article at an extra-ordinary session and in urgent procedure.
Provisions of the laws regulating public debt, public procurements and conclusion and execution of international agreements, respectively, shall not apply to the borrowing procedure of the Republic of Serbia for the purpose defined in paragraph 1 of this Article.
The Government shall decide on the concrete borrowings of the Republic of Serbia for the purposes defined in paragraph 1 of this Article, up to the amount of the borrowings approved in paragraph 2 of this Article
IV AGENCY BODIES
Article 15
The Agency bodies are: Managing Board and the Director of the Agency.
Article 16
Managing Board of the Agency (hereinafter: the Managing Board) shall consist of seven members, including the Chairman.
Members of the Managing Board shall be appointed and dismissed by the Government.
Members of the Managing Board by function shall be: the Minister of Finance, the Minister of Economy and the Vice-Governor of the National Bank of Serbia responsible for banking supervision.
Other members of the Managing Board shall be appointed and dismissed by the Government, namely:
1. the Chairman and one member – as proposed by the Ministry of Finance,
2. one member – as proposed by the National Bank of Serbia,
3. one member – as proposed by the representative association of banks.
Members of the Managing Board must hold a university degree and have relevant professional experience in the fields of finance, banking and insurance.
Chairman and the member of the Managing Board referred to in paragraph 4, item 1 of this Article may be appointed from the top management ranks.
Members of the Managing Board shall be appointed for a six years term, with the right of reappointment.
Article 17
The Managing Board shall:
1) adopt the Statute and other general regulations of the Agency;
2) make decisions on provision of funds for conducting the Agency’s operations, as well as on the use of these funds;
3) enact regulations and general acts pertaining to deposit insurance, in accordance with the law regulating deposit insurance;
4) adopt acts pertaining to the role of bank administrator,
5) render decisions on establishment of bridge banks, appoint members of the Managing Board and Executive Board of such banks, act as the assembly of such banks, in accordance with the law regulating bankruptcy and liquidation of banks,
6) adopt acts regulating detailed conditions and manner of determining the least cost of provision of financial support referred to herein,
7) make proposals for rendering of decisions on institution of bankruptcy or liquidation proceedings over the banks whose operating license has been revoked;
8) adopt the Agency’s financial plans;
9) adopt the Agency’s annual financial statements;
10) select the company to audit the Agency’s financial statements and review these statements;
11) adopt the reports on the Agency’s operations;
12) supervise the legal compliance of the Agency Director’s work;
13) enact the operating manual;
14) carry out other activities prescribed by the law and the Statute of the Agency.
The Managing Board's decisions shall be made with the majority vote of all members.
The Managing Board can decide to invite independent experts without voting rights to attend their meetings.
The Managing Board shall report to the Government.
Article 18
The members of the Managing Board shall receive fees in accordance with the Statute of the Agency.
Article 19
Members of the Managing Board, as well as their family members, cannot hold shares, initial capital, debt securities of banks, other financial organisations, audit companies or other legal entities the Agency cooperates with in performing its activities, and they shall give a written declaration to the Government declaring no holdings, no later than the following day of the day of their appointment, as well as every following year during their term, no later than 31 January of the current year.
For the purposes of paragraph 1 of this Article, family members shall be the spouse, children and other descendants, parents and other ascendants, connections up to the 3rd degree, adoptive children and the adopter, as well as persons without full working capacity, placed under the custody of the members of the Managing Board.
Member of the Managing Board proposed by the representative association of banks cannot be the employee or a member of any body of a bank, nor its consultant.
Article 20
The function of a member of the Managing Board shall be terminated before the expiry of his/her term of office upon his/her request or when he/she reaches the retirement age, and in case of dismissal.
The function of a member of the Managing Board shall be terminated after the expiry of 30 days from the day of submitting the request for termination of appointment to the Government.
A member of the Managing Board shall be dismissed:
1. if he/she was convicted of a criminal offence and sentenced to an unconditional penalty of imprisonment for no less than six months, or of a criminal offence which makes him/her unsuitable to perform his/her function,
2. if he/she performed his/her functions in an incompetent or imprudent manner,
3. if, on the basis of findings and opinions of the competent medical institution, it is established that, due to his/her health status, he/she has permanently lost his/her capacity to work and perform his/her duties,
4. if he/she fails to submit or submits a false statement regarding the information referred to in Article 19 hereof,
5. if it is established that he/she does not meet the requirements for appointment referred to in paragraph 5 of the Article 16 hereof.
If the function of the member of the Managing Board is terminated before the expiry of his/her term of office, a newly appointed member shall perform the function only until the expiry of the previous member's term of office.
Article 21
The Agency Director (hereinafter: the Director) shall be appointed and dismissed by the Managing Board, with the approval of the Government.
The Director shall be an employee of the Agency.
The Director cannot be an official in accordance with the law that regulates prevention of the conflict of interests during performing public functions, an official of political or union organisations, an external associate or a member of bank bodies, other financial organisations, the audit companies auditing financial statements of the Agency or other legal entities that the Agency cooperates with in performing its activities.
The Director shall give to the Government written declaration referred to in paragraph 1 of Article 19 hereof, and no later than the following day of the day of his/her appointment, as well as every following year during his/her term, not later than 31st January of the current year.
The Director shall report to the Managing Board.
Article 22
The Director shall:
1. represent and act on behalf of the Agency,
2. organise the activities of the Agency and manage its operations,
3. propose the regulations issued by the Managing Board,
4. adopt the internal organisation and organisational charts of the Agency,
5. carry out the decisions of the Managing Board and take the measures for the execution,
6. be responsible for legitimacy and efficiency of the Agency’s work as well as for use of the funds of the Agency,
7. perform other activities prescribed by the law and the Statute of the Agency.
Article 22a
The Agency, its employees, members of its Management Board, as well as the persons who, by order of the Agency, perform duties determined by the law, shall not be held liable for any damage that may occur during the performance of such duties, unless it is proven that such damage has been caused deliberately or by wilful misconduct.
Persons referred to in paragraph 1 of this Article cannot be held liable for the damage referred to in the same paragraph even after the termination of their employment with the Agency, i.e. termination of performance of their duties.
Agency shall reimburse the expenses for representation of its employees in court and administrative proceedings initiated in relation to duties that these employees perform on the basis of this Law. The Agency shall also reimburse such expenses to the persons whose employment with the Agency has terminated
V BUSINESS SECRET
Article 23
Members of the Managing Board, the employees of the Agency, as well as any persons engaged by the Agency in its work, shall be obliged to keep, as a business secret, all information that they have acquired in their work.
The obligation referred to in paragraph 1 of this Article is also applicable after the cessation of the membership in the Management Board and the employment or engagement of the persons referred to in paragraph 1 of this Article.
Exceptionally, the information under paragraph 1 of this Article may be made available to the competent authorities, in accordance with the Law.
VI AGENCY REPORTS
Article 24
Not less than once a year, the Agency shall submit its performance reports to the National Assembly of the Republic of Serbia, to the Government, to the National Bank of Serbia, and to the ministry in charge of finance.
Article 25
The Managing Board shall submit the annual financial statements of the Agency with the audit report to the Government and the National Bank of Serbia, not later than 15th July of the following year.
VII TRANSITIONAL AND FINAL PROVISIONS
Article 26
On the effective date of this Law, the Agency shall assume all rights and obligations of the Agency for Deposit Insurance, Rehabilitation, Bankruptcy and Liquidation of Banks.
Article 27
Members of the Managing Board shall be appointed by the Government, no later than 30 days from the day of effectiveness hereof.
For the first term, the chairman of the Managing Board and the member of the Managing Board proposed by the Ministry of Finance shall be elected for a six-year term, the member of the Managing Board proposed by the National Bank of Serbia for a four-year term, and the member of the Managing Board proposed by the representative association of banks for a two-year term.
The Director shall be appointed by the Managing Board, not later than 60 days from the effective date hereof.
The Council of the Agency for Deposit Insurance, Rehabilitation, Bankruptcy and Liquidation of Banks, founded by the Law on the Agency for Deposit Insurance, Rehabilitation, Bankruptcy and Liquidation of Banks, shall perform the Managing Board activities until the appointment of the persons referred to in paragraph 1 of this Article.
The Executive Manager of the Agency for Deposit Insurance, Rehabilitation, Bankruptcy and Liquidation of Banks shall perform the activities of the Director of the Agency until the appointment of the person referred to in paragraph 3 of this Article.
Article 28
The Agency shall enact the Statute and other general regulations within 60 days from the day of effectiveness hereof.
Until such time the regulations referred to in paragraph 1 of this Article are enacted, the Statute and other general acts of the Agency for Deposit Insurance, Rehabilitation, Bankruptcy and Liquidation of Banks shall stay in force, if they are not contrary hereto.
Article 29
On the effective date of this Law, the Law on the Agency for Deposit Insurance, Rehabilitation, Bankruptcy and Liquidation of Banks (''Official Gazette of SFRY'', Nos. 84/89, 63/90, 20/91 and ''Official Gazette of FRY'', No. 53/01), the Law for Providing the Assets for Founding and Activities of the Federal Agency for Deposit Insurance and Bank Rehabilitation (''Official Gazette of SFRY'', No. 84/89), and the Decision on Beginning the Activities of the Federal Agency for Deposit Insurance and Bank Rehabilitation (''Official Gazette of SFRY'', No. 18/90) shall cease to be valid.
Article 30
This Law shall come into force on the eight day from the day of its publication in the ″Official Gazette of the Republic of Serbia″.
Separate Article of the Law on Amendments and Supplements of
The Law on Deposit Insurance Agency
(“Official Gazette of the RoS”, No. 116/2008)
Article 3
This Law shall enter into force on the day following the day of its publishing in “Official Gazette of the Republic of Serbia”.
Separate Article of the Law on Amendments and Supplements of
The Law on Deposit Insurance Agency
(“Official Gazette of the RoS”, No. 91/2010)
Article 12
This Law shall enter into force on the eighth day following the date of its publishing in “Official Gazette of the Republic of Serbia”. |
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