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Monetary Policy | Public Debt Servicing

Public Debt Servicing

Conversion of Citizens’ Foreign Currency Deposits into RS Bonds

The last series of bonds of the Republic of Serbia issued on account of citizens’ frozen foreign currency savings, А2016, matured on 31 May 2016. On 19 May this bond was delisted from the Belgrade Stock Exchange.

All series of the Republic of Serbia’s bonds, А2002-А2016, have matured and can be redeemed immediately upon conversion of foreign currency savings into bonds.

Citizens can still convert their frozen foreign currency savings into RS bonds at bank counters and redeem those bonds, given that under the current legislation there are no conversion and redemption deadlines.

Nevertheless, it is recommended that citizens do not postpone conversion and redemption.

The Law on the Settlement of the Public Debt of the Federal Republic of Yugoslavia Arising from the Citizens’ Foreign Exchange Savings (FRY Official Gazette, No 36/2002), in force as of 4 July 2002, prescribed the mandatory conversion of foreign currency deposits of citizens (residing in the Republic of Serbia on 4 July 2002) into RS bonds – registered zero-coupon bonds in a dematerialized form, maturing on 26 August 2002 and/or each 31 May from 2003 to 2016.

The conversion of frozen foreign currency savings deposits into RS bonds is carried out by the respective banks where the frozen foreign currency savings had been deposited, i.e. Eurobank a.d. Beograd (former Nacionalna Štedionica banka a.d. Beograd), since it is this bank that has taken upon itself to settle the obligations of banks in bankruptcy or liquidation. The conversion of frozen foreign currency savings deposited with Privredna banka a.d. Beograd, in bankruptcy and Nova Agrobanka a.d. Beograd, in bankruptcy, is performed by Halkbank a.d. Beograd (former Čačanska banka a.d. Čačak).

The conversion procedure is the following: banks calculate 2% annual interest on savings deposits until the conversion date – 19 August 2002 and at the same time convert the amount into EUR applying the middle exchange rate as at the conversion date and establish the right to ‘A’ series RS bonds falling due in the period between 2002 and 2016.

Each converted savings deposit is entered into the savings book of the deposit holder. Also, each holder receives a Certificate of Conversion of his savings deposits into RS bonds. Along with the Certificate, the holder has a securities account opened in his name with the Central Securities Depository (CSD). The holder’s account is opened as a sub-account of his bank’s CSD account.

The conversion is carried out for each individual savings deposit, whereas if a deposit holder has several savings deposits, one Certificate is issued for the total sum of converted savings deposits, meaning for all deposits of one deposit holder.

In case the foreign currency savings deposits are inherited and subject to a final court decision, the heirs are entitled to their inherited share of the annual installment.

Matured FRY ‘A’ and ‘B’ series bonds issued pursuant to the Decision on the Issue of the Federal Bonds in Order to Meet Obligations Arising from Old Foreign Currency Deposits of Citizens (FRY Official Gazette, Nos 4/2001, 6/2001 and 27/2001) may be redeemed through banks.

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