Starting January 1, 2025, Serbia introduced new regulations that cap the interest rates on various financial products offered by banks. These changes aim to protect consumers from high borrowing costs, which had previously reached nearly 40 percent in some cases.
Under the new rules, the maximum interest rate on permitted overdrafts, or “minuses,” is now set at 19.75 percent. This limit applies to both authorized and unauthorized overdrafts. The rate is determined by the default interest rate of the National Bank of Serbia (NBS), which is currently set at 13.75 percent, plus an additional six percentage points.
The cap on consumer and cash loan interest rates is also limited, with the interest on housing loans restricted to a maximum of 5 percent. Meanwhile, the interest rate on credit cards and consumer loans is capped at 14.75 percent and 17.75 percent, respectively.
The National Bank of Serbia’s decision is in response to the delay in passing the new Law on the Protection of Financial Service Users, which would have set these limits in law. With the law not yet passed, the NBS implemented temporary restrictions on borrowing costs.
Previously, interest rates for overdrafts were significantly higher, with rates as high as 33.45 percent for authorized overdrafts and up to 45.02 percent for unauthorized ones.
As of December 2024, Serbian banks reported over 9.2 million current accounts held by approximately 6 million customers, with the total approved overdraft amount reaching 45 billion dinars. Currently, around half of this amount is in active use.
These measures reflect the ongoing efforts by the NBS to regulate borrowing costs and provide financial relief to citizens, especially in light of the fluctuating reference interest rates determined by the NBS. The next review of interest rates is scheduled for February 2025, and if the reference interest rate is lowered, the maximum interest on overdrafts may decrease as well.
