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The Government of the Republic of Serbia

In the service of citizens

Agreement on financing, realisation of project for capitalisation and establishment of deposit insurance system signed

Belgrade, 17 January 2007

Serbian Minister of International Economic Relations Milan Parivodic, Director of the Agency for Deposit Insurance Milorad Dzambic and Director of German KfW in Belgrade Elke Hellstern signed today an agreement on financing and realisation of the project for capitalisation and establishment of a deposit insurance system.

Author: Fonet

Parivodic told a press conference that the agreement is worth €10 million, and added that it is a donation by the German government.

He specified that a sum of €9 million from the funds mentioned will be used for recapitalisation of the Deposit Insurance Fund which will strengthen it considerably, while €1 million will be used for providing technical support to the work of this fund.

The Serbian government will allocate a sum of €8.8 million for the fund, said the Minister and stressed that the Ministry of International Economic Relations and KfW have excellent cooperation.

Parivodic expressed gratitude to the Germany for their help so far, and recalled that Germany is the largest donator in bilateral help for Serbia, having provided some €400 million from October 5, 2000 until now.

Hellstern said that the purpose of the Fund for deposit insurance, which will be supplied by the funds from the German and Serbian governments, is to provide security to small depositors.

In the initial phase, the fund will have the capacity to secure deposits of up to €3,000. This amount will be increased gradually parallel with the growth of its funds.

The First Secretary for Economic Cooperation at the German Embassy said that Germany is interested in supporting the building of a transparent and efficient financial system in Serbia.

She said that since 2000, Germany has helped the Serbian financial sector with €61 million, of which €51 have been invested in the improvement of small and medium-sized enterprises.

The Fund for deposit insurance is supposed to increase citizens' trust in the banking sector, she explained and explained that deposit insurance is an obligation in all countries of the European Union.