Better insurance for saving deposits in Serbia - World Bank grants USD 200 million to Deposit Insurance Agency

The Deposit Insurance Agency of Serbia said in a release on Wednesday that it had been granted a USD 200 million loan by the World Bank to secure stable sources of finance for the Fund for payment, announcing new activities aimed at increasing those funds.

DIA has made decisions to introduce a bonus premium in 2014 and 2015, so in addition to the regular premium, the banks in Serbia will also be paying this bonus premium of 0.05 percent of the total amount of insured deposits quarterly or 0.2 percent annually, all that with the aim of securing additional funds for the Fund for payment.

In that way, an annual revenue of 0.6 percent of the total amount of insured deposits in the banking sector will be generated from regular and bonus insurance premiums on deposits.

What comes next are negotiations with the European Bank for Reconstruction and Development (EBRD) on a special-purpose precautionary loan of EUR 200 million that would serve as an additional stable source of finance for aforementioned Fund.

Apart from aforementioned activities agreed upon with the World Bank, such arrangement would also demand some legal and institutional changes in regard to the operations of the Deposit Insurance Agency and the Deposit Insurance Fund, the release reads.

The expected long-term effects of these financial arrangements are the maintenance and strengthening of the stability of the financial and banking system as well as macroeconomic stability, which would make the growth of overall deposits continuous and the potential of banks in Serbia stronger.