CNB refuses applications for six more savings banks

Published: 12/11/2008

At its session today, the CNB Council reviewed the latest monetary and economic developments, accepted the CNB's semi-annual report and adopted several decisions within its competence.
The new Decision on the short-term liquidity loan - replacing the one from 2002, presently in force - is harmonised both with the legislation adopted in the mean-time, and with the altered conditions in the financial market. It allows the central bank to act in a more flexible and expeditious manner in the event of a possible need for an assistance to a bank that is solvent but would be facing a liquidity shortfall.
The Council members were informed of the central bank's initiative directed at the Government of the Republic of Croatia and the Croatian Parliament, to postpone for one year lifting of all the remaining restrictions on external foreign exchange transactions, planned to take effect as of 1 January 2009. This is explained by an estimate that in the existing conditions of a current crisis in the world financial system, reflected in illiquidity, interest rate rise, high exchange rate volatility of the world currencies and economic growth deceleration, a full liberalisation of all capital flows - which includes the use of foreign loans through accounts abroad, granting of short-term financial loans to non-residents, deposit transactions of residents, payment and collections in foreign cash, transfers of gifts and grants abroad, taking in and out of the country of cash and materialized securities, conducting transactions in foreign exchange markets abroad and transactions with derivative financial instruments - would generate greater risk and more cost than benefit for the Croatian economy and the financial system.
The CNB Council approved the appointment of Radojka Olić as a chairperson of the management board of Banka Kovanica d.d., Varaždin. Due to a failure to meet the prescribed legal requirements, Križevačka štedno-kreditna zadruga, Križevci, was not granted the approval for transformation into a savings bank and the applications were also refused for Štedno-kreditna zadruga Demos from Karlovac, Štedno-kreditna zadruga Libertina from Čakovec, Sindikalna štedno-kreditna zadruga from Zagreb, Štedno-kreditna zadruga Sunce AG from Zagreb and Štedno-kreditna zadruga Petrinja from Petrinja, which also wished to continue their operation as savings banks.
The CNB Council also adopted a decision on the withdrawal from circulation of banknotes of 50, 100 and 200 kuna denomination with a date of issue 31 October 1993, which will be a legal tender only until the end of the following year. Most of these banknotes have already been gradually withdrawn from circulation and replaced with the newer ones, with better protection against counterfeiting. After 1 January 2010, the remaining banknotes of the aforementioned issue could be replaced at the Croatian National Bank, without a time limit.