At the extraordinary session, the Executive Board of the National Bank of Serbia made a decision which enables banks to approve dinar loans to businessmen within the guarantee scheme at even more favorable, lower interest rates.
As specified in the announcement, the Executive Board passed the Decision on the amendment of the Decision on interest rates which the NBS applies in the procedure of conducting the monetary policy.
“This decision enables the dinar loans that banks grant to clients under the Guarantee Scheme, in accordance with the Decree on establishing a guarantee scheme as a measure to support the economy to mitigate the consequences of the Covid-19 pandemic, to be even more favorable,” the NBS said in a statement.
It is added that the goal of this measure of the NBS is to contribute to neutralizing the negative economic effects of the Covid-19 pandemic and to provide additional impetus to economic growth. By applying this measure of the NBS, loans in dinars under the Guarantee Scheme will be even more favorable, which should stimulate companies’ demand for loans and have a positive effect on faster GDP growth, ie economic recovery in the short term, the NBS reports.
As it is explained, the NBS will pay the so-called banks to banks that grant dinar loans from the Guarantee Scheme at lower interest rates than the maximum rate from the Regulation remuneration rate at an interest rate that is 0.50 percentage points higher than the standard remuneration rate (which is paid on the amount of allocated required reserves in dinars and which currently amounts to 0.10 percent).
The condition for banks to be entitled to this “preferential” remuneration rate is to grant their clients dinar loans from the Guarantee Scheme at an interest rate that is at least 0.50 percentage points lower than the maximum interest rate prescribed by the Decree for loans approved in dinars (one-month Belibor + 2.5 pp).
In this way, the NBS will compensate banks for the reduction of the interest rate on dinar loans within the Guarantee Scheme in the amount of 0.50 percentage points, and banks will, in accordance with their business policies, be able to approve them on more favorable terms.
In the conditions of low and stable inflation and low inflation expectations, this measure, as pointed out by the NBS, represents support for the implementation of the economic policy of the Government of Serbia and gives an effective incentive to banks to intensify lending to the economy under even more favorable conditions.
This measure enables the interest rates on dinar loans from the Guarantee Scheme to be closer to the interest rates on euro loans approved in accordance with the same Guarantee Scheme, which is conducive to the dinarization and stability of the financial sector.
Banks will be obliged to report to the NBS on the amount of loans from the Guarantee Scheme that they approve with a “privilege”, as well as on interest rates on those loans, which ensures control over the functioning of this mechanism, the statement reads, Dnevnik reports.
