The European Bank for Reconstruction and Development (EBRD) is providing a €200 million stand-by credit line to Serbia’s Deposit Insurance Agency (DIA), an independent, public institution designed to protect insured depositors and manage the Deposit Insurance Fund (DIF), a special fund set up to pay-out insured depositors.
The EBRD financing will further strengthen the stability of the banking sector in Serbia by securing efficient and credible protection of insured deposits, supporting legal reforms of the deposit insurance regulatory framework and helping Serbia to deal with remaining challenges in the banking sector. By strengthening trust and diversifying financial tools, the DIF recapitalisation also aims to attract new investments in the financial sector.
Extensive policy dialogue has been undertaken by the EBRD and the Serbian authorities, alongside the IMF and the World Bank, to agree a set of legal and institutional reforms to clarify the DIA’s mandate and enhance its operational capacity. Under this engagement the international financial institutions aim to join the efforts of the Government of the Republic of Serbia to further develop the financial infrastructure by reforming the current policy and institutional framework, and introduce best practice with respect to Serbia’s bank resolution and deposit insurance regime.
Additional grant funding for the institutional capacity building and technical assistance to the DIA is being extended by the government of Luxembourg and the EBRD’s Shareholder Special Fund.
“The Deposit Insurance project is a landmark investment for the EBRD as it supports the development of the local banking market infrastructure. We are supporting the government’s efforts to strengthen the stability of the financial sector and this transaction is a clear testimony to the EBRD’s commitment”, said EBRD Director, Serbia, Matteo Patrone.
“This agreement with the EBRD demonstrates the important partnership we have with the EBRD in enhancement of the deposit insurance system and the institutional capacity of the DIA. The agreement is a major boost for the country’s financial sector and the financial support will contribute to higher depositor confidence and comprehensive protection to the potential investors”, said Serbian Finance Minister, Dušan Vujović.
On top of its other investments in the financial sector, the EBRD has developed a specialised role in supporting regional financial systems by successfully completing deposit insurance projects in several countries in the region.
Since the start of its operations in Serbia, the EBRD has invested more than €3.8 billion in over 181 projects. The Bank invests in the financial sector, industry, commerce, agribusiness, energy and infrastructure.