Issuing of Operating Licenses and Bank Set-up Procedures

The issuing of provisional permit to set up a bank and the granting of operating licenses are regulated in detail by:

• The Law on Banks and 
• Decision on Implementing the Provisions of the Law on Banks Relating to Granting of a Provisional Bank Founding Permit and Subsequent Issuing of a Full Operating License to a Bank, as well as on Implementing Specific Provisions Relating to Granting Approvals of the National Bank of Serbia.

The text below is a summary of information contained in the above regulations.

Bank is set up as a joint stock company – open or closed. Bank founders may be one or more domestic and foreign legal and natural entities, which provide funds for the equity capital of the bank. Equity capital of the bank may take pecuniary and non-pecuniary form (assets and rights that are in the function of bank’s operations). The pecuniary portion of the equity capital of a bank can be no less than EUR 10,000,000 in the dinar equivalent value, as at the official middle exchange rate on the day of its payment.

Granting of provisional bank founding permit

The National Bank of Serbia grants provisional bank founding permit under conditions prescribed by the Law on Banks and Decision on Implementing the Provisions of the Law on Banks Relating to Granting of a Provisional Bank Founding Permit and Subsequent Issuing of a Full Operating License to a Bank, as well as on Implementing Specific Provisions Relating to Granting Approvals of the National Bank of Serbia. Along with an application for the issue of a provisional bank founding permit, potential bank founders submit the following to the National Bank of Serbia:

• data on the founders, amount of their stakes, and number, type and nominal value of shares they are acquiring;
• memorandum of association and draft articles of association;
• statement declaring that the pecuniary portion of equity capital has been paid to the suspense account with the National Bank of Serbia; 
• statement declaring that the non-pecuniary assets will be transferred to the bank’s equity capital;
• data on all persons holding a stake in the bank and grounds on which such stake was acquired; 
• names and data regarding the qualifications, experience and business reputation of the nominated members of the bank’s managing and executive board;
• the bank’s proposed program of activities for the period of three years and draft business policy for the year in which the bank is to be founded;
• draft procedures for risk management and internal control;
• if the bank is to be founded as a subsidiary of a foreign bank or another foreign financial sector entity subject to foreign regulatory authority supervision and/or monitoring, evidence that the competent regulatory authority of the home country has issued approval to the foreign bank or other foreign financial sector entity regarding the participation in the founding of the bank in the Republic of Serbia, or evidence that no such approval is required under the regulation of such country;
• if the founder is a foreign bank or foreign financial sector entity subject to supervision and/or monitoring by the home country regulatory authority, evidence that requirements specified by the Law have been met;
• letter of authority for the person to cooperate with the National Bank of Serbia in the process of granting a provisional permit, and
• evidence of the payment of fee prescribed by the decision governing uniform fees charged for services provided by the National Bank of Serbia, and well as evidence of the payment of the republic administrative taxes in line with the law governing republic administrative taxes.

The above documentation has to be submitted in the original form or in certified copy, and may not be older than six months. The documents have to be in the Serbian language; if they are written in a foreign language, the original or certified copy of such document has to be submitted along with certified translation in the Serbian language rendered by sworn-in-court translator.

The National Bank of Serbia has to render a decision on the application for the issue of a provisional bank founding permit not later than 90 days after receiving the duly completed application.  If the potential bank founders fail to submit to the National Bank of Serbia an application for the issue of operating license within 60 days following the granting of provisional bank founding permit, such permit will cease to be valid.

Issuing of bank operating license

After obtaining a provisional bank founding permit, potential bank founders have to submit to the National Bank of Serbia an application for the issue of a full operating license and the following documents:

• evidence of payment of the pecuniary portion of equity capital, evidence of transfer of non-pecuniary assets into the equity capital of the bank, as well as statement regarding the origin of such assets;
• evidence that they have provided appropriate business premises, acquired and prepared equipment for unimpeded business activities of the bank, that the premises meet the legal requirements regarding technical resources, work safety, and protection and improvement of the environment, as well as that the premises and equipment enable access to all relevant data and information required for the conduct of supervisory function by the National Bank of Serbia;
• evidence that the founders have hired an external auditor for the bank included in the list specified in Article 52, paragraph 3 of the Law on Banks;
• data on the organizational structure and human resource capacity of the bank;
• letter of authority for the person to cooperate with the National Bank of Serbia in the process of issuing a bank operating license, and
• evidence of the payment of fee prescribed by the decision governing uniform fees charged for services provided by the National Bank of Serbia, and well as evidence of the payment of the republic administrative taxes in line with the law governing republic administrative taxes.

The above documentation has to be submitted in the original form or in certified copy, and may not be older than six months. The documents have to be in the Serbian language; if they are written in a foreign language, the original or certified copy of such document has to be submitted along with certified translation in the Serbian language rendered by sworn-in-court translator.

The National Bank of Serbia shall render a decision on the application for the issue of bank operating license within 30 days from receiving the duly completed application. Not later than 30 days after receiving the National Bank of Serbia’s decision on granting a bank operating license, a meeting of the bank’s shareholder assembly will be held. Regulations adopted by the shareholder assembly have to be submitted for approval to the National Bank of Serbia within five days following their adoption. The National Bank of Serbia decides on the granting of approval regarding the regulations adopted by the bank’s shareholder assembly within 60 days after their submission. Not later than 30 days after obtaining the National Bank of Serbia’s approval regarding the above regulations, bank founders are obligated to submit an application for entering the bank in the register of business entities.  The bank acquires the capacity of a legal entity as of the moment of being entered in the register of business entities.