New set of NBS measures to facilitate citizens’ access to financing

At its extraordinary meeting held on 17 August, the NBS Executive Board adopted the Decision on Temporary Measures for Banks to Facilitate Access to Financing for Natural Persons.

The Decision prescribes three sets of temporary measures that should facilitate access to housing loans for citizens, and thus provide support to the real sector, more specifically the construction industry, through faster turnover of assets, the possibility of extension of housing loan repayment periods for maximum five years and temporary relaxation of the approval procedure for household short-term dinar loans up to a certain amount.

The Decision aims to bolster economic growth and prevent potential negative effects of the COVID-19 pandemic caused by SARS-CоV-2 on citizens and businesses, while at the same time maintaining stability of the financial system.

The first measure relates to the approval of new housing loans to households for newly constructed apartments. Easier access to housing loans will also support the construction industry as the engine of economic activity, by accelerating turnover of financial assets and sustaining growth in that branch of the economy.

The newly adopted preferential treatment envisages that in addition to fully completed apartments, housing loans may also be approved for:

  • residential real estate – buildings in construction, regardless of the degree of completion, in case of project financing by a bank, with the Building Directorate of Serbia as the holder of the construction permit or in case they are part of the measures of government support to specific categories of natural persons;
  • buildings in construction, with minimum 60% degree of completion, in case of project financing by another bank or project of a legal entity investor.

Up to now banks could approve housing loans for the purchase of minimum 80% completed buildings. The new measure encourages banks to approve housing loans without having to wait for the residential building to be completed in full or for its major part. At the same time, there are clearly defined criteria that the financing, i.e. investor and the building in construction must meet in order for this treatment to be applied. To ensure funding for this type of lending, banks will be allowed to use a part of assets in the form of capital, i.e. certain capital buffers they normally set aside.

This Decision provides further support to previous first home buying programmes, by enabling preferential treatment also for newly approved loans in this category.

The second measure aims to ease terms of repayment of housing loans for citizens, particularly those that may potentially see reduced or uncertain income in the period ahead, as well as those wishing to extend the initially planned repayment deadline. During this and the next year, banks may offer facilities to borrowers who took out a loan before the decision entered into force by extending the repayment deadline for housing loans by five years at most, without any change, i.e. deterioration of status regarding assessment of the regularity of the borrower’s loan repayment.

Also, a regulatory solution was introduced allowing banks to grant a loan of up to RSD 90,000 to a natural person who does not receive his/her wage or pension via an account with that bank, with the maturity of up to two years, and to accept, as relevant evidence of employment and wage or pension of the borrower in the past three months, the signed statement on such facts issued by such borrower under full criminal and material liability.

Banks will be able to apply the adopted set of measures until end-2021.

The Decision will enter into force on the eighth day from its publication in the “RS Official Gazette”, and it will be published by the end of this week. The start of its application is, therefore, expected at the end of this month.

As so far, the NBS continues to take measures to support households, while at the same preserving financial system stability.

Governor's Office