Banking Chaos or Salvation?
On June 17 this year, the National Bank of Serbia (NBS) published amendments and supplements to the Law on Banks, which will come into force on October 1, while provisions on key functions in banks will apply from January 1 next year. These changes are presented as a major step towards greater legal certainty and stability of the banking sector, but is that really the case?
What do the changes bring?
Members of bank management boards must now have not only a good business reputation and qualifications but also at least five years of experience in the financial sector, as well as the ability to devote sufficient time to performing their duties. This means that the number of directorships one person can hold will be strictly limited, in line with European standards.
The NBS has also introduced the concept of “key functions” in banks, which include risk management, compliance control, internal audit, and other functions that significantly impact the bank’s operations. Banks will have to ensure that holders of these functions have a good reputation, qualifications, and experience, and their appointment will be subject to prior consent from the NBS.
Additionally, a bank restructuring fund has been introduced, which is a significant step towards improving the resilience of the banking system.
Will banks survive?
These changes sound like they will raise standards and increase accountability in the banking sector, but on the other hand, they impose additional administrative and financial burdens on banks. Limiting the number of functions one board member can perform may lead to a shortage of qualified personnel, which could hinder the operation of banks, especially smaller ones.
Introducing stricter criteria for board members and key functions may reduce the number of candidates, thus increasing costs for banks that will have to pay more for experts who meet these requirements.
What do experts say?
Igor Dodić from the Dodić Law Firm believes that the changes contribute to greater legal certainty and stability of the banking sector but emphasizes that banks will have to adapt their operations to the new requirements. He stresses that the law will not cause additional costs for citizens and the economy but will encourage market competition and strengthen the investment environment.
What do you think?
Are these changes the right path to strengthening the banking sector, or will they only further complicate bank operations? Will banks manage to adapt to the new rules, or are we facing a wave of layoffs and closures? Share your opinion, tell us about your experience with banks, or just drop a good joke about bankers – you know we love a good story!
Conclusion
The amendments to the Law on Banks in Serbia bring significant changes in corporate governance aimed at increasing stability and legal certainty. However, the question remains whether these changes will be too much for the banking sector or will truly bring the needed revolution. We are watching the situation unfold and are ready for everything – from praise to criticism, from laughter to tears. Be part of this story!
Source: Blic Biznis, Igor Dodić, Dodić Law Firm
