03.02.2015.
In response to the repeated assertions that the assets of Razvojna banka Vojvodine in bankruptcy exceed its liabilities and that liquidation might have been a better solution than bankruptcy, the NBS wishes to highlight once again that all the facts confirm that the only right solution was license revocation and institution of bankruptcy proceedings against Razvojna banka Vojvodine.
The NBS wishes to remind the public that Razvojna banka Vojvodine was delicensed on 6 April 2013 on account of a chronic shortage of capital, critical undercapitalisation, compromised ability to settle its liabilities to creditors and hence the potential to cause a systemic risk to Serbia’s financial sector. At the time of delicensing, the bank’s regulatory capital was negative, i.e. the bank’s total liabilities exceeded the estimated value of its assets. Thus, acting by force of law, the NBS revoked the bank’s license.
Furthermore, Razvojna banka Vojvodine had a shortage of high-quality liquid assets needed to cover deposits subject to transfer. According to the Proposal for the Assumption of a Part of Assets and Liabilities of Razvojna banka Vojvodine by Banka Poštanska štedionica and Razvojni fond AP Vojvodine, submitted by the Ministry of Finance and Economy to the NBS to obtain a positive opinion on assumption, there was a shortfall of RSD 6.36 billion to fully cover the insured and uninsured deposits subject to transfer to Banka Poštanska štedionica, in the total amount of RSD 17.55 billion. In the Proposal it was stated that governments of the Republic of Serbia and AP Vojvodina had agreed to issue bonds to cover the shortfall amount. The fact that the two governments had to raise more than RSD 6 billion at the moment of license revocation, in order to cover all insured and uninsured deposits, indicates that the institution of bankruptcy proceedings against the bank was the only right solution.
As Razvojna banka Vojvodine was delicensed pursuant to the Law on the Assumption of Assets and Liabilities of Banks for the Purposes of Safeguarding Stability of the Financial System of the Republic of Serbia, we wish to underline the following: in accordance with the Conclusion of the Government of the Republic of Serbia, on 6 April 2013 Razvojna banka Vojvodine entered into the Agreement on the Assumption of a Part of Assets and Liabilities with Banka Poštanska štedionica a.d. Beograd and the Deposit Insurance Agency. Thereafter, Razvojna banka Vojvodine submitted to the NBS the application for license revocation and the NBS made the decision to revoke the license. Further, following the delicensing, the Deposit Insurance Agency had an obligation to institute bankruptcy proceedings against the bank. Namely, the above Law mandates the institution of bankruptcy rather than liquidation proceedings, leaving no choice between the procedures to be followed.
Liabilities to other creditors in the amount of around RSD 2 billion, which were not transferred to Banka Poštanska štedionica a.d. Beograd, accounted for only 10% of total liabilities of Razvojna banka Vojvodine. The fact that the funds for the payment of these liabilities have not been recovered from the bankruptcy estate nearly two years after the delicensing of Razvojna banka Vojvodine (as reflected in the Report on the Course of Bankruptcy Proceedings and the Balance of Bankruptcy Estate as at 30 November 2014), only goes to show that revoking the bank’s operating license was the only right course of action.
Governor's Office
