The National Bank of Serbia (NBS) has submitted proposed amendments to four key laws to parliament, with changes to the Law on the National Bank of Serbia and the Law on Banks drawing particular attention. These amendments aim to bolster the NBS’s supervisory role, financial stability and technological advancements, while also addressing the future of gold reserves and the potential for a digital national currency.
Gold reserves and national control
One of the major changes concerns the fate of gold mined in Serbia. The NBS will be granted the right of first refusal to purchase gold extracted within the country. This means that any gold mined will first be offered to the NBS before being sold elsewhere, ensuring that the country’s gold resources remain within its borders. The central bank will then be required to offer a market price to maintain fair competition. The move aims to strengthen the country’s foreign exchange reserves and contribute to national financial stability.
Digital currency and technological adaptation
In line with global trends, the NBS is now positioning itself to issue a digital dinar. This move follows in the footsteps of other central banks experimenting with digital national currencies. The amendments will grant the NBS the exclusive right to issue digital currency, in addition to traditional banknotes and coins, setting the stage for Serbia to join the global shift towards digital finance.
Moreover, the NBS will gain authority to issue and revoke licenses for virtual currency services and oversee their operations, further adapting to modern financial technologies.
Preparing for the euro
The amendments also make provisions for Serbia’s future as a member of the Eurozone. Although still distant, these provisions acknowledge that the dinar will eventually be replaced by the euro. The NBS will be authorized to issue euro banknotes and coins once Serbia officially joins the European Union and adopts the euro as its national currency.
Strengthened independence and oversight
A notable change focuses on increasing the NBS’s independence from state authorities. New provisions aim to prevent other government bodies from interfering in the central bank’s financial decisions or management of its assets. For instance, the NBS will retain full control over its assets, including buildings and facilities, ensuring that no outside authority can sell or control them. These changes are designed to reinforce the bank’s financial independence in line with EU requirements.
Additionally, the NBS will now be represented in court by its own lawyers, although the governor can still delegate this responsibility to external individuals if needed.
Employment restrictions for NBS personnel
Changes to employee regulations are also among the amendments. While employees of the NBS were previously allowed to perform additional paid work outside of regular hours, new provisions now restrict both paid and unpaid external work to prevent potential conflicts of interest.
The amendments introduce a six-month employment ban for former NBS employees seeking jobs in the financial sector, including banks, insurance companies, and international financial institutions. This ban aims to prevent any undue influence on the financial sector by former NBS staff, though the governor can grant exceptions on a case-by-case basis. Additionally, any employer wishing to hire a former NBS employee must notify the NBS in advance.
Other key changes
The proposed amendments also remove certain provisions, such as the NBS’s ability to issue banknotes during times of war or national emergency, a power that has never been implemented. The term “enterprise” is also being replaced with “company” in the law to align with the Law on Business Companies.
Furthermore, the NBS is making structural adjustments to improve its internal operations. This includes clarifying the roles of the Executive Board and the Council of Governors, as well as adding an Audit Committee to enhance governance.
Conclusion
These amendments represent a significant overhaul of the National Bank of Serbia’s legal framework, aiming to modernize its operations, increase its independence, and prepare for a future where digital currencies and the euro will play a central role in Serbia’s financial system. With these changes, the NBS is positioning itself to meet the challenges and opportunities of a rapidly evolving global financial landscape.
