Decision to recapitalize RBV revoked - New loan of RSD 7 billion for Vojvodina

The Vojvodina parliament adopted a decision on February 14th to allow the province to borrow money by issuing long-term bonds worth up to RSD 7 billion in order to resolve the issue of the Development Bank of Vojvodina (RBV), thus revoking its earlier decision to recapitalize that bank through the issue of up to RSD 15 billion worth of bonds.

The decision on the new borrowing is another step towards the implementation of an agreement between the governments of Serbia and Vojvodina to resolve the status of RBV, Provincial Secretary for Finance Zoran Radoman said and reminded that RBV, former Metals Banka, had been experiencing problems in operations, such as liquidity and solvency crisis, for quite a while.

Therefore the governments of Serbia and Vojvodina signed an agreement in early December last year to solve the problem of the RBV status by transferring the property of that bank to the newly established Development Fund of Vojvodina (RFV) and a bank that would assume a portion of the deposits and assets of RBV.

Radoman said that the bonds, which would be used to compensate for the difference between the values of insured and uninsured deposits and assets of RBV that would be transferred to another bank, would be issued by the province and the republic in the ratio of 78.11 to 21.89 percent in favor of the province.

That means that the province will borrow about RSD 7 billion and the republic about RSD 2 billion.