Status, organisation, mandate and functions of the National Bank of Serbia

The status, organisation, mandate and functions of the National Bank of Serbia (NBS), as well as its relations with other bodies of the Republic of Serbia and international organisations and institutions are regulated by the Constitution of the Republic of Serbia (RS Official Gazette, No 98/2006) and the NBS Law (RS Official Gazette, Nos 72/2003, 55/2004, 85/2005 – other law, 44/2010, 76/2012 and 106/2012 and 14/2015 – Constitutional Court decision and 44/2018).

The National Bank of Serbia is independent and autonomous in carrying out its tasks laid down by the NBS Law and other laws, and is accountable for its work to the National Assembly of the Republic of Serbia.

The primary objective of the NBS is to achieve and maintain price stability. Without prejudice to its primary objective, the NBS also contributes to maintaining and strengthening of the stability of the financial system.

Bodies of the NBS

The bodies of the NBS are the Executive Board, the Governor and the Council of the Governor.

The Executive Board consists of the Governor and Vice-Governors of the National Bank of Serbia.

The Executive Board determines the monetary and foreign exchange policies and performs the activities aimed at maintaining and strengthening the stability of the financial system. The Executive Board determines in particular:

• the monetary policy programme of the NBS;
• the manner of setting the interest rates of the NBS and the manner of calculation, collection and payment of interest on placements and other receivables of the NBS, including other funds the NBS pays interest on;
• the terms and conditions of issuing securities;
• the terms and conditions under which the NBS performs open market operations and discount operations;
• short-term loan policy;
• dinar exchange rate policy;
• the required reserve base and ratio, and the manner, conditions and time limits for the allocation and use of banks’ required reserve balances;
• the policy of foreign exchange reserve management and guidelines for foreign exchange reserve management;
• other instruments and measures of monetary and foreign exchange policies;
• measures for maintaining bank liquidity;
• measures and activities within the scope of authority of the National Bank of Serbia, aimed at maintaining and strengthening the stability of the financial system.

The Executive Board sets the key policy rate and other interest rates applied by the NBS in the implementation of monetary policy.

The Executive Board also issues regulations relating to NBS’s supervisory function, in accordance with laws governing the discharge of this function.

The Executive Board adopts a decision:

• to issue and revoke bank operating licenses;
• to issue and revoke licenses of insurance companies to carry on the insurance business;
• to issue and revoke licenses to carry on financial leasing operations;
• to issue and revoke operating and fund management licenses of voluntary pension fund management companies;
• whether the conditions for initiating bankruptcy and/or liquidation proceedings over abovementioned financial institutions are met;
• to issue and revoke licenses of payment institutions to provide payments services;
• to issue and revoke licenses of electronic money institutions to issue electronic money.

The Executive Board adopts regulations and other general and separate acts regulating bank resolution, in accordance with the law governing banks.

The Executive Board takes decisions at meetings by the majority vote of all members. In the event of a tie, the Governor will have the casting vote.

Operations of the National Bank of Serbia are managed by the Governor, who represents and acts on behalf of the NBS.

The Governor manages and organises the operations of the NBS; implements decisions of the Executive Board and the Council; enacts regulations, general and individual acts falling within the scope of authority of the NBS which are not assigned by law to the authority of the Executive Board and the Council; proposes regulations, general and individual acts to be enacted by the Executive Board and the Council, unless stipulated otherwise by law; regulates the NBS’s internal organisation, the classification of jobs and labour relations of employees in the National Bank; appoints and removes managers of NBS organisational units; and performs other tasks laid down by the NBS Law and other laws, in a manner that does not conflict with the primary objectives.

The Council of the Governor consists of five members, including the president, appointed by the National Assembly on the proposal of the National Assembly’s committee in charge of finance. Members of the Council are appointed for a five-year renewable term of office.

The Council of the Governor:

• adopts the NBS’s Statute, on the proposal of the Executive Board;
• determines the exchange rate regime for the dinar, on the proposal of the Executive Board and with the Government’s consent;
• adopts the strategy of foreign exchange reserve management, on the proposal of the Executive Board;
• decides on membership in international financial organisations and institutions;
• adopts the NBS’s financial plan;
• adopts annual financial statements;
• appoints the manager of the National Bank of Serbia’s organisational unit in charge of internal audit;
• appoints the external auditor;
• considers the external auditor’s report and monitors the implementation of audit recommendations in the NBS;
• oversees the system of financial reporting, risk management and internal controls in the NBS;
• assesses the adequacy of accounting policies and procedures adopted in the NBS;
• adopts the annual plan of internal audit in the NBS and periodically considers internal audit reports;
• oversees the performance of internal audit and compliance in the NBS;
• adopts the development strategy of the NBS, proposed by the Executive Board, and monitors its implementation.

The Council submits a report on its work to the National Assembly whenever deemed necessary, but no less than twice a year.

The Council takes decisions by a majority vote of all members.

The National Bank of Serbia performs its statutory tasks through its main organisational units, Institute for Manufacturing Banknotes and Coins – Topčider and branches of the NBS.