Serbia Strengthens Banking Regulations and Aligns Closer to EU Standards

Serbia is entering a new phase of financial stability and modernization following substantial upgrades to its prudential framework for banks, announced at the annual assembly of the Association of Serbian Banks. The country’s regulatory improvements come at a time of declining inflation and are designed to further support both resilience and trust in the national banking sector.

Over the past year, Serbia has contained inflation back within its target band, with headline inflation dropping to 3.8% and core inflation on a downward trend. The financial sector remains a pillar of stability, reflected in the historically low non-performing loan ratio of 2.3%, robust capital adequacy, and increased household savings. These achievements highlight the effective cooperation between commercial banks and the National Bank of Serbia, as well as strong confidence among depositors.

In 2025, key legal reforms have further aligned Serbia’s banking framework with EU standards. Amendments to the banking law have enhanced supervisory and bank resolution frameworks, improved corporate governance requirements, and strengthened internal controls. The establishment of a Bank Resolution Fund, managed by the National Bank, brings Serbia’s framework in line with EU directives. New measures targeting anti-money laundering and counter-terrorism financing have also been introduced, bolstering the country’s reputation in international evaluations.

Consumer protection is a renewed priority, with new legislation ensuring responsible lending, greater transparency, and innovative advisory services. Interest rate caps, though not the main focus, have protected borrowers from market volatility and encouraged a shift to fixed-rate loans for nearly half of new housing credits. The law also enhances the consumer experience by strengthening banks’ advisory obligations and creating avenues for direct oversight, such as mystery shopping, to improve service standards.

Digitalization is progressing, yet personal service remains emphasized as vital for customer trust. Importantly, Serbia’s financial modernization is underscored by its accession to the Single Euro Payments Area (SEPA), set to deliver faster and cheaper cross-border payments from May 2026. Technical preparations are underway to integrate Serbia’s advanced instant payment system with European infrastructure, aiming to reduce costs and open broader access for Serbian citizens and businesses to the EU market.

These comprehensive reforms and international integrations signal Serbia’s determination to guarantee banking security, regulatory excellence, and a trustworthy environment for growth—benefiting the entire economy and reinforcing the nation’s place in the European financial system.