FAQ - Implementation of Secondary Legislation Enacted Pursuant to the Financial Leasing Law
Decision on the Obligation of Lessors to Maintain a Reserve
Balance ("RS Official
Gazette", No. 21/2010)
What is the reserve balance?
A lessor reserve balance is the amount a lessor is required to maintain in a special account opened with a bank, and which is calculated by applying the prescribed rate on the prescribed base.
What comprises the reserving balance?
The base for the calculation of reserve balance is the balance of liabilities
under credits, other types of borrowing and supplementary payments from abroad
received by the lessor since 10 December 2005, including liabilities under
interest, as at the last day of the month preceding the calculation.
Subordinated liabilities are those where:
- the creditor of the lessor has paid the contracted amount in
Subordinated liabilities may be exempted from the calculation of reserve
balance if the National Bank Serbia, at the lessor’s request and based on the
relevant documentation enclosed, determines that the conditions specified
therein have been met.
When is the reserve balance calculated and allocated?
The reserve balance is calculated and allocated on the 18th of the month against the reserve base as at the last day of the prior month. If the 18th of the month falls on a non-business day, reserves are allocated on the first preceding business day. The calculated amount of reserves is applicable for the maintenance period lasting from the 18th of the current month to the 17th of the following month, and/or to the date when lessors are required to allocate reserves for the next maintenance period. Lessors are obligated to maintain the reserve balance in euros and US dollars on a special account opened with a bank. The reserve balance allocated can be no less than the reserve balance calculated for the relevant maintenance period.
How is the reserve balance calculated?
Reserve balance is calculated by applying the following rates:
1) beginning from the maintenance period 16 April–17 May 2010 and ending
with the maintenance period 18 August–16 September 2010
If the reserve base as at 30 September 2008 is lower than the reserve base as
at the last day of the month preceding the calculation of reserve balance, the
rate of 20% is to be applied on the reserve base as at 30 September reduced by
the amount of investments approved under the Government Programme.
2) beginning from the maintenance period 17 September–17 October 2010 and ending with the maintenance period 18 November–16 December 2010 – 15% on the reserve base as at the last day of the prior month.
3) from the maintenance period 17 December 2010–17 January 2011 onwards
– 10% on the reserve base as at the last day of the prior month.
Notification of the National Bank of Serbia on the obligation to maintain the reserve balance
By the 20th of the current month lessors must submit to
the National Bank of Serbia the applicable reserve balance calculation on the
prescribed form (certified by the authorized person’s signature and the lessor’s
stamp), as well as evidence that the reserve balance is maintained on a special
account opened with a bank (reserve balance account statement as at the first
day of the applicable maintenance period, certified by the authorized person’s
signature and the bank’s stamp).
How is the fulfillment of the requirement regarding minimum purchase value of the lease object of EUR 2,000 assessed?
The fulfillment of the requirement regarding minimum purchase value of the lease object of EUR 2,000 will be assessed based on the purchase value of the lease object from one financial lease contract, regardless of whether the subject of that contract is one or more moveable consumer durables.
Who does the limitation regarding minimum share and maximum debt refer to?
The limitation regarding minimum share and maximum debt, prescribed in the Decision, refers to natural persons only, where natural persons do not include entrepreneurs and agricultural producers if the lease object serves for the performance of their basic activity.
In the case of financial lease contracts concluded for the period of up to ten years, natural persons will be required to pay the share which amounts to no less than 20% of the gross purchase value of the lease object (price with VAT – price applicable if you buy the object for cash). Exceptionally, the lesee – natural person is not required to make a downpayment to the lessor under financial lease contracts concluded in the period from 2 March 2009 to 31 December 2009.
Credit debt of natural persons under a single contract cannot exceed 30% of such person’s regular income, which means that the sum of all credit obligations (including warranties) and leasing obligations cannot exceed 30% of regular income of a given natural person. Data on debt will be obtained from the Credit Bureau.
In their business policy, lessors determine the manner and methodology of evaluating the creditworthiness of lessees that are not deemed natural persons in the abovementioned sense.
What is the effective lease fee rate?
Effective lease fee rate (ELR) represents the total cost of financing which, in addition to interest, includes all other costs of concluding a lease contract.
The methodology for calculating ELR is prescribed in the Decision and Guidelines for the implementation of that decision, ensuring uniformity in the calculation of this rate, as well as enabling comparability of this rate among different lessors, and its comparability with the effective interest rate disclosed by banks. The calculation of the ELR includes only those costs of concluding a financial lease contract that the lessee credits to the account of the lessor.
ELR represents one, but not the only, element of comparing different offers
for financing the procurement of an object. For details on elements to which
attention should be paid when comparing different forms of financing please see:
Principal Elements to Consider at the Time of Concluding a Financial Lease