Predrag Catic is in charge of legal affairs at the Association of Serbian Banks – a voluntary, professional organization of banks and other types of organizations whose activities are related to the functioning of the banking system. Prior to joining the Association, Catic held Head of Legal roles with three banks: Banca Intesa (from 2007-2013), Societe Generale (2003-2007), and Zepeter Bank (2001-2003).
How did your career get you to your current role?
P.C.: First of all my entire education, including the legal one, was completed in Belgrade, where I finished Law School and passed the Bar exam. That means that I am educated to be oriented to the local market. After finishing university I started working in the telecommunication industry, first at the PTT traffic company, then at Telekom Serbia, the largest companies within their industries at the time here.
My first job (and first love) revolved around litigation and insurance. The years I spent in litigation – around 8 years – trained me to understand that as an in-house lawyer/litigator I have my in-house clients and their needs and that I have to work a lot to understand their mindset and their way of understanding “business,” which was radically different from my own “legal” thinking. The “second half” of my daily work – insurance – helped me to get a deeper understanding of business books, logic, and the wonders of accounting. At that time in Serbia (in many ways as today) we had problems with debt resolution and, as a result, alongside litigation I started to negotiate ways of repayment of debt with my counterparts. My involvement in insurance paved the way to introducing new legal ways of debt resolution and, as curious as I am, that process led me to the banking sector.
Prior to starting to work for the Association of Serbian Banks you were in Head of Legal positions with three banks. What were the commonalities and the main differences in your experiences with them?
P.C.: Three banks: three different, but at the same time, very common worlds.
The main differences between them were obvious: shareholding capital origin, size, and business orientation, international, cross-border financing projects, number of employees, [and] almost everything. One big difference that affected my work was the size, as, in comparative terms, the last of the three was much bigger. All of a sudden, when I joined Banca Intensa, I was faced with managing a much bigger team than I was used to, which I quickly learned was a far more politically oriented role than a legal one.
The main commonality thing was the special position that clients held in all of them. Everything was about clients, collateralization, and the ability to negotiate when things go wrong.
Why the banking sector? What keeps you excited about it after so many years?
P.C.: Well, I think it is something I derived from my education. Legal education in Serbia at that time, which I spoke a bit about already, meant gaining a wide scope of legal knowledge. That is something you need to have in the Serbian banking sector even today, when legal environment simplification and specialization are taking place. From family to international law you have to be able to support your colleagues on a daily basis, often quickly over the phone because the client is waiting in front of a bank desk. Excitement, adrenalin, involvement in everything, satisfaction of professional curiosity, all are aspects which no other industry could award you with to the same extent. Especially when you taste success. Banks are far more than just money – they are people, businesses, jobs, economic growth, new ideas – they are the heart of the economy. Therefore, it was a no-brainer: I pick the banking industry.
According to the Association of Serbian Banks, its main objective is to “build a position for and strengthen the reputation of the Serbian banking sector both locally and abroad.” How does that translate in terms of your legal function?
P.C.: My role is that of Coordinator of the Legal Committee of the Association of Serbian banks, which includes involvement in all areas in which banks are participating, both commercially and statutorily. That entails pure legal advice on both “general” and “particular” levels.
“General” means for us the aspects where we identify problems and suggest possible ways of overcoming them and initiate and participate in various initiatives in drafting new laws, thus adding our input towards the improvement of legislation at a national level. The “particular” level entails supporting banks in specific situations, which could range from usage of promissory notes to implementation of bilateral treaties Serbia has with other countries about something in focus (real estate, trade, arbitration awards, etc.).
At the same time, as in-house lawyer I am in charge for all legal documents the Association signs, as with any other legal entity.
To what extent is the Association involved, and what is your direct involvement, in banking regulatory matters in Serbia?
P.C.: We are not regulators, but we are directly involved in terms of expressing professional opinions when banking, or regulations that target the banking business, are on the agenda to be changed or introduced. Also, as I said, we are appreciated as an initiator of change in some of the relevant regulations.
As an example, recently Serbia changed its Mortgage Law, enabling the facilitation of already prescribed out of court foreclosure procedures. The new legislation is aimed at overcoming some deadlocks hidden in the previous wording of the Law, and we are very proud of the fact that the wording of the new Law passed by both the Government and the Parliament of Serbia relied on our solutions for those deadlocks.
My personal involvements are (a) organizing the banking legal community around open discussion of the regulatory framework; (b) drafting legal opinions regarding that framework with comments and suggestions; (c) participating in Government Working Group(s) for drafting legal frameworks for the valuation of real estate property, and participating in public debates on a new Law on Enforcement and Collateralization; and (d) supporting banks in the process of harmonizing their legal documents with newly introduced laws such as the Law on Protection of Customers of Financial Services, the Law on Payment Services, the Banking Law, the Law on Insurance of Deposits, and many others.
In your view, what is the biggest challenge for banks in Serbia in terms of legislation and, if you could implement one regulatory challenge, what would it be?
P.C.: Banking business in Serbia is generally all about two issues: collection of non-performing loans (NPLs) and accession to the EU.
At the moment the country is investing enormous efforts in pre-accession negotiations with the EU. We expect opening of the first chapters of the accession agreement soon. One of the most important chapters of that agreement for us is the one dedicated to financial services. With regard to it we are in good shape, let’s say, but we, as the banking sector, are pointing at the Enforcement Law as the one which has to be improved in terms of efficient collection of receivables. This law makes the above two issues into one and is closely linked to the legal certainty of undertaken business which, as a value in and of itself, has to be polished and further nurtured in the country.
The new law is in public debate, and we are facing clashes between two approaches to this law: a pragmatic one – related to supporting efficiency in enforcement of commercial deals – and another I would say more academic one, suitable for wealthier times in Serbia or to wealthier countries nowadays. But despite that clash – or maybe thanks to it – all involved experts are doing their best to deliver a good Law.
As part of your role, are there any situations that warrant the use of external counsel? If yes, how do you pick the firm(s) you will work with?
P.C.: Yes, yes of course! We engage external lawyers for two main reasons: one is litigation and another one is presenting their experience before the banking legal environment.
We have intensive cooperation on a daily basis with external lawyers, therefore picking lawyers for something specific is maybe easier for us than for somebody else. Usually we go through a procurement procedure in which reliability is of greater importance than price for services.
I will say, as a new trend, we, the general legal market, are working on developing and implementing IT applications which enable better reporting, exchanging of documents, and information. As a result, lawyers with improved software infrastructure and with readiness to accommodate to new demands of this kind are at some advantage.
On the lighter side, what is your favorite way to decompress after a long day at the office?
P.C.: Wow, several things, first and above all I’d say spending time with my family – my wife, daughter, and son – then when time allows: friends, photography, wine, books, and traveling.
This Article was originally published in Issue 2.4. of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.