The World Bank has approved two loans worth a combined USD 240mn in support of the health and financial sectors in Serbia, the lender said in a statement. The funds will be used to finance the Second Serbia Health Project (USD 40mn) and the Deposit Insurance Strengthening Project (USD 200mn) which aim to address systemic deficiencies in their respective sectors, the statement underscored.
The Second Serbia Health Project will support the improvement of health care financing and efficient purchasing of pharmaceuticals and medical products. It will also improve the standards of quality and efficiency of care in the sector through strengthening quality improvement systems and modernising cancer management at selected tertiary facilities, the statement read.
The World Bank will also allocate funds to replenish Serbia'sDeposit Insurance Fund. The funds will strengthen the confidence in the Serb banking system which has been shaken by several recent bank failures. At end-January, the Serb central bank revoked the licence of Univerzal Banka as its continuous undercapitalisation became a threat to its liquidity and business continuity. The bank became the fourth in a row to fail since November 2012 after three state-controlled banks - Razvojna Banka Vojvodine, Nova Agrobanka and Privredna Banka Beograd - have been liquidated and their deposits and healthy assets transferred to state-owned Postanska Stedionica.
''In parallel with other measures that increase financial resources from other sources, this will ensure that the Deposit Insurance Fund has the resources to meet its legally mandated deposit insurance and bank resolution functions.'', the World Bank country manager for Serbia, Tony Verheijen was quoted as saying.
The World Bank will also provide significant support to strengthen the institutional and technical capacity of the Deposit Insurance Agency (DIA), the statement read.
The EBRD has recently said it is also considering providing a EUR 200mn credit line to Serbia'sDeposit Agency which will provide immediate financing to the DIA, when required, for compensating depositors.