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Central Bank of Serbia adopts amendments and supplements in the legislation for banking supervision.

Central Bank of Serbia adopted amendments and supplements in the legislation for banking supervision related to Granting of a Preliminary Bank Founding Permit, Bank Operating License and Consents by the National Bank of Serbia, as well as the Provisions Relating to the Establishment of Criteria for Defining a First-Class Bank.Additionally, the Decision on Risk Management was amended to permit banks to assign receivables from legal entities and entrepreneurs (due and not yet due) to other banks. The aim is to create conditions for the transfer of a bank's credit portfolio, in part or in whole, to another bank. The provision stipulating that banks may assign receivables due from legal entities and entrepreneurs to another legal entity remains in force. The amended decision also details the obligations of banks in relation to introducing new products and outsourcing, i.e. entrusting certain activities to third parties, and sets out the documents that must be submitted to the National Bank of Serbia along with the notification on introducing new products/outsourcing. The amended decision also sets the deadlines for sending out such notification.The key novelty is that the assignment of receivables to another bank does not affect the classification of receivables performed by the assignee bank based on the criterion of timeliness. At the same time, the assignor bank must supply the assignee with the borrower's debt servicing history. The provisions on downgrading receivables into the worst category (E) were amended so as not to include receivables from the assignee bank that are not due yet.The third decision was amended to simplify the National Bank of Serbia's procedures of processing applications for bank founding permits and acquisition of ownership. Criteria for the assessment of solvency of a potential founder or acquirer of ownership being a legal entity with an investment grade credit rating will be the same as for banks, and if the potential founder or acquirer is a special purpose vehicle (SPV), the assessment of solvency will be made for the persons financing the SPV's investment in the bank's capital rather than for the SPV itself.Source: Central Bank of Serbia
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Publication:Balkan Business News
Date:May 20, 2013
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