20.12.2004.

Raj Bank’s Operating Licence Revoked by National Bank of Serbia

Based on comprehensive solvency supervision and control of legality of operations of the Raj Bank a.d. Belgrade, on December 20, 2004 the National Bank of Serbia passed a decision whereby that bank’s operating licence is to be revoked.

Since in the course of supervision of the bank’s operations actions contrary to regulations threatening to jeopardize financial stability of the said bank were found, the National Bank of Serbia brought a decision on September 29 this year ordering the Raj Bank to remove the established irregularities by November 30 of the current year.

In the course of the new supervision, however, the National Bank of Serbia established that the Raj Bank has not fulfilled all orders from the above decision and that it has failed to improve its liquidity and profitability. To be more specific, this means that the bank incorrectly classified its receivables, not making sufficient provisions for risk-bearing receivables. The pecuniary part of the share capital is well below the prescribed census, while at the same time, the bank made investments into fixed assets higher than provided by law and failed to provide adequate internal audit and supervision.

As the bank’s exposure to credit risk and liquidity risk remains high, and as it has recorded operating loss and a deterioration of profitability, which jeopardized its operations, the National Bank of Serbia has passed a decision revoking Raj Bank’s operating licence.

Press Release from Governor’s Cabinet