If you find yourself in a situation where on your account u banks you have to enter the allowed or non-allowed minus, this year you will probably pay less interest than before.
The reason for this is that until recently it differed from bank to bank even by more than 20 percent, but with the new regulation it adopted National Bank of Serbia and which is applied from the beginning of 2025, the interest, at least until mid-February, will not be able to exceed 19,75 percent on both permitted and unauthorized minus.
According to the decision of the NBS, the maximum interest rate on permitted overdrafts on current accounts, so-called permitted minuses, is calculated according to the following principle: the legal default interest rate increased by six percentage points.
The current level of the default interest rate is 13,75 percent and will remain at that level until February 13, 2025, when its new level will be determined.
When this is taken into account, the aforementioned calculation leads to a maximum amount of 19,75 percent of interest on the permitted minus, and the maximum amount of interest on the unauthorized minus is the same.
How much were the interest rates?
These interest rates differed even by more than 20 percent at certain banks and according to the last published data of the NBS from November 2024, the interest rates on the allowed overdraft ranged from 11,48 percent to as much as 33,45 percent.
Interest on the illegal minus went up to 45 percent.
When it comes to the permitted minus, out of 19 banks, only two had an interest on this amount lower than 19,75 percent.
Only at a small number of banks, these interest rates were previously below that level, while at most they were significantly higher - data from the National Bank of Serbia.
The decision to limit these interest rates is a good move, according to economists, but they point out that you should always be careful when investing in the red, so they do not recommend this type of financing.
The most expensive money
Allowed excess should be seen as the most expensive money, says economist Zoran Grubišić for "Vreme".
"My warm advice is to avoid it at all costs." It's best to tie your hands. It's always better to use a credit card, because you don't have to pay interest if you use it wisely," says Grubišić, a professor at the Belgrade Banking Academy.
Nevertheless, regardless of this, people often resort to entering the permissible minus.
Ljubodrag Savić, a professor at the Faculty of Economics in Belgrade, is of the same opinion.
"A number of people have no choice, so they have to use that option, it's their only way to survive until the next month." I guess they use that option when they have nowhere to go," says Savić for "Vreme".
And he adds that there are a number of other options that are much more favorable than the permitted and illegal minus, such as cash loans and credit cards, so he also does not recommend going into the minus.
Good step by the NBS
"Vremena" interlocutors consider the decision of the NBS to regulate the interest rate on these loans a good step.
"Compared to previous interest rates, this is an improvement. Imagine if there was no such intervention, who knows how far interest rates would go. It is radically lower compared to the interest that some banks used to charge, but it is still a fifth of the amount", says Savić.
However, it is still unclear why these interest rates are so high, and that is why users should be very careful when going into the red.
"When people fall into that story, they can hardly get out," adds Savić.
"Hot money" policy
The reduction of interest rates to the permissible and impermissible minus should be placed in the broader context of complete restrictions for all credit products of banks, explains Grubišić.
"In the last two years, we have witnessed the trend of interest rate growth, which has somewhat stopped in recent months, and interest rates have broken through some levels that we are not used to. I'm talking about reference and market interest rates, and we know that all products adjust to market interest rates. When they are on the rise, interest rates on all bank credit products are also rising," says the interlocutor of "Vremena".
The interest on illegal and permitted minus is the highest and it is the so-called policy of hot, easily available money, adds Grubišić.
"The limitation is adapted to the very character of those products. On housing loans, the limit is five percent, but it is the safest product", he explains.
What is the tensile rate?
The decision on the maximum amount of interest on the permitted and impermissible minus will be made in February.
The official default interest rate depends on the level of the reference interest rate determined by the NBS, to which another eight percentage points are added.
Currently, the reference interest rate of the NBS is at the level of 5,75 percent, which means that the default interest rate is 13,75 percent. Which, again, means that the maximum interest rate on allowed minuses is 19,75 percent, according to the calculation made by the NBS.
If the reference interest rate is changed, and the next meeting of the NBS Executive Board on that occasion is on February 13, the default interest rate will also change, and consequently the maximum interest rate on the allowed minuses.
Professor Zoran Grubišić does not expect an increase in the reference interest rate in the coming period.
"I am not even sure that it will decrease." It will probably stay the same or go down slightly, because the European Central Bank did that recently, and we usually follow that trend”.
