Decision of the NBS on Temporary Measures for Banks in Repayment of Agricultural Loans in Conditions of Aggravated Agricultural Production

By virtue of the Decision on Temporary Measures for Banks Aimed at Adequate Management of Credit Risk in Agricultural Loans Portfolio in Conditions of Aggravated Agricultural Production (“RS Official Gazette”, No. 111 as of 07 October 2022) and Decision Amending the Decision on Temporary Measures for Banks Aimed at Adequate Management of Credit Risk in Agricultural Loans Portfolio in Conditions of Aggravated Agricultural Production (“RS Official Gazette”, No. 5 as of 24 January 2023) (hereinafter referred to as: the Decision), envisaging that debtors which due to aggravated agricultural production conditions are not able to settle their liabilities towards the Bank, i.e. that have difficulties in settling those liabilities, debtors shall have the possibility to submit the application to the Bank for approving facilities in the form of rescheduling liabilities in line with the Decision. Liabilities mean debtor’s liabilities under agricultural loans (loans granted to a debtor for the requirement of performing the agricultural activity), whereas rescheduling may be applied to loans granted within the guarantee scheme of the Republic of Serbia or with the guarantee of international financial institutions, as well as based on subsidised loans, only with the prior consent of the guarantee, i.e. subsidy provider.

Pursuant to the Decision, the Bank is offering debtors to reschedule the loan, which implies amending terms and conditions of a single loan, by enabling the debtor a grace period in repayment of all its liabilities towards the Bank under that loan for six to twelve months (depending on the period for which the debtor opted when submitting the application to the Bank), in the course of which the Bank shall not collect receivables under principal, but only the contracted interest rate, and the loan repayment term is extended so that the amount of the annuity (periodic liabilities to be paid upon the expiry of the grace period) determined when the rescheduling was approved is not higher than the same amount in the period before the rescheduling. Loan repayment terms that are contracted by the approval of rescheduling (e.g. interest rate, additional collateral, etc.) may not be less favourable for the debtor than the original, i.e. previously contracted terms.

In accordance with the Decision, the Bank is obliged to grant the facility in repayment of liabilities to a debtor – a person entered in the Register of Agricultural Households within the meaning of the law governing agriculture and rural development (hereinafter: Register), namely:

-Farmer,
-Entrepreneur i
-Legal person:

• An agricultural cooperative with minimum five cooperative members entered into the Register as holders or members of five different agricultural households entered into the Register and
• Other legal person classified as a micro or small legal person in accordance with the law governing accounting.
• Person Engaged in Purchase and Cold Storage of Fruit in line with regulations.

upon debtor’s application, if all of the following conditions have been met as of 31.05.2022:

• The debtor is not in arrears longer than 90 days under any obligation to which the rescheduling applies;
• The debtor is not in a default status in respect of the bank within the meaning of NBS regulations;
• The bank’s receivables from the debtor are not considered a non-performing loan or a non-performing receivable within the meaning of NBS regulations.

The debtor has the possibility to use the facility for one or more loan products.

The debtor may submit the Application for introducing the facility in repayment of loan liabilities to the Bank in the Bank’s business premises, electronically or by post, by no later than 30 April 2023.

The Bank is obligated to reach a decision on debtor’s application and inform the debtor thereof within 30 days from the day of the receipt.

The bank may not charge a fee for undertaking measures and activities in accordance with this Decision, or for expenses it may incur in relation to those measures and activities, including the expenses of processing clients’ applications, except expenses needed to approve the receivables which are not determined by the bank (e.g. Credit Bureau or Real Estate Cadastre). To all its debtors that met conditions prescribed by the Decision as of 31.05.2022 under any obligation arising from the product to which this facility applies, the Bank will submit an individual notice if all conditions envisaged by the Decision are met, and this notice will be submitted by 20.02.2023.

 In line with the aforementioned, if you meet the prescribed conditions (and by receiving the Individual Notice by 20.02.2023 the stated is unequivocally confirmed by the Bank) and are interested for the introduction of facilities in repayment of loan liabilities, you may submit an application to the Bank in the following manner:

• By regular mail by sending the Application to the following address:

OTP banka Srbija
Trg slobode 7
21000 Novi Sad
(with Note: Olakšica NBS za RPG (in English NBS facility for RAH))

• By sending an e-mail to:olaksice@otpbanka.rs
• In person, by submitting the Application in a branch of OTP banka Srbija