Serbian bank association warns of campaign against loan insurance

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The Association of Banks of Serbia said on Tuesday that a campaign was being waged by interest groups against the National Corporation for Housing Loan Insurance (NKOSK).

A press release warned that the campaign could inflict serious damage and added that the NKOSK legally insures housing loans under a 2004 law which has been confirmed by National Bank of Serbia (NBS) decisions. It said that the NKOSK insured loans are cheaper than without the insurance. It said that an interest group is profiting from court proceedings against banks and calling for class action suits which, it added, could seriously hard the economy.

The Efektiva consumer organization said recently that the Supreme Court of Casation had issued its first ruling against a bank, confirming that it is illegal to charge clients for insurance premiums with NKOSK. “That bank used client money to insure itself and the loan it placed while fictitiously giving the client lower interest rates,” Efektiva said.