By: Milen Vesovic
Belgrade, 9 November 2009 (Serbia Today) – Confidence to the once distressed banking industry of Serbia appears to have been restored. After years of instability due to war, sanctions and inflation, the banking system in Serbia is finally enjoying a vote of confidence from the citizens.
Savings in Serbia last year amounted to more than 5.7 billion euros in foreign currency accounts and around 10.6 billion dinar accounts (about 113 million euros). Banking officials point out that the global economic crisis did cause the withdrawl of almost one billion euros in the last quarter of 2008, but for the first nine months of this year individual savings increased by more than 520 million euros.
"This trend shows strengthened confidence in the financial sector and that this trend will continue. In a crisis, people spend less and save more," said NBS Governor Radovan Jelasic. He added that this trend in banking is a sign of the market confirming the correctness of what is done by the NBS to stabilize the domestic currency and the banking sector.
Only this year NBS made nearly 20 different measures to maintain the stability of the banking sector, and among the most important is the reduction of the bench interest rate from 17.75 percent at the beginning of the year, to 11 percent, and the changing structure of the required foreign currency reserves for banks returned to the 50 billion dinar level. These factors have all contributed to making credit cheaper in Serbia, thus stabilizing lending.
Economic experts add that the Serbia’s success in stabilizing the banking system owes much to the fact that it has met requirements to obtain loans from the International Monetary Fund amounting to 2.9 billion dollars.
Despite these positive indicators, Serbia’s credit system is still listed as “risky” based on last October’s report of the international agency for credit evaluation, "Dun & Bradstreet”.
"Dun & Bradstreet" did point out that the banking system in Serbia has remained healthy since the foreign banks continued to support operations in Serbia.