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English   Srpski  Home page > News archives > Press conference 16.03.2018

Press conference

OVERDRAFT ONLY IN THE CASE OF UTMOST NEED


A press conference was held on 16 March 2018 at the Association of Serbian Banks, attended by many representatives from all leading media and news agencies, where Dr Veroljub Dugalić, ASB Secretary General, presented the Credit Bureau data for February 2018. While pointing out that the poor trend regarding corporate lending in banks continues, he explained that this is partially caused by a seasonal trend, and that the lending activity, especially in the corporate segment, is always somewhat lower in the first months of the year. Despite this, it is worrying that the number of corporate loans and their nominal amounts have been decreasing for months, seeing as how this further affects the GDP growth, unemployment rates and finally the standard of living. Retail lending is stagnating, and the default is continually decreasing, aggregately amounting to 8.5% at the end of February 2018, compared to 8.6% it amounted to at the end of January 2018 and 8.7% at the end of 2017.

In the second part of the conference, the journalists expressed great interest in current topics. When asked about the total approved and utilised amount of allowed overdrafts in respect of retail current accounts, as well as the interest rates on the allowed overdrafts, Dr Dugalić used the opportunity to emphasise that the number of current accounts in default on that basis exceeds 237 thousand, and that the share of default in the amount of the allowed overdraft is 11.3%, which is three times higher than in the case of loans, which, therefore, implies a three times higher risk for the banks when approving this product. He also warned the clients that overdraft, as the most expensive banking product, is an option to be used only in the case of utmost need.

Regarding the loan processing fees charged by the banks, which has been a burning issue for some time in the public and media, the journalists were wondering if some banks gave up on charging loan processing fees due to the high pressure from the public or for some other reason. Dr Dugalić was explicit on this issue, explaining that such moves exclusively represent the advertising campaign of the respective banks during a certain period with a view to attracting new clients, and that the business policy of banks in terms of fees will not be changed. He reminded the attending media representatives that the court practice on this legal issue is inconsistent and reiterated that charging loan processing fees is clearly regulated by the Law on Banks and the Law on the Protection of Financial Services Consumers, as well as confirmed by the practice in all European countries. Regarding the unclear and undefined allegations that the Supreme Court of Cassation "released" without any formal or final statement, the ASB Secretary General stressed that the newspapers, which published the statement of the President of the Supreme Court of Cassation, say that "this decision is not legally binding nor is it the principle stance of this court".

Other questions were related to the news published by Bloomberg that the Dinar is the second best currency in the world considering its demonstrated performance over the past 12 months, the good yield on the bonds of the Republic of Serbia as a call to investors to invest in domestic securities, as well as the potentially increased lending activity of banks encouraged by the write-offs of bad loans.

At the end of the conference, the journalists were briefly informed about the activities organised by the Association of Serbian Banks, with the aim of promoting financial education and improving financial literacy, as a part of the ongoing European Money Week, which has been organized in more than 30 European countries this year, on 12-16 March.

Tables:

Legal entities and entrepreneurs credit balance sheet

Retail credit balance sheet by type of credit

Debt in respect of bank credits

Retail debt by type of credit

Share of defaults in credit debts

Individuals' debt according leasing contracts, credit cards and current accounts

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