The Banker's Central Banker of the Year 2020 awards celebrate the officials that have best managed to stimulate growth and stabilise their economy. 

Global and Europe

Jorgovanka Tabakovic, National Bank of Serbia

Jorgovanka Tabakovic has been at the helm of the National Bank of Serbia (NBS) since 2012. In that time, she has acted to strengthen the country’s banking system while pursuing monetary policy that has tamed inflation and supported both domestic demand and bank credit growth. Today, Serbia’s banking system is highly liquid, profitable and well capitalised thanks in large part to the policies and oversight of the NBS. International Monetary Fund (IMF) data indicates that, in the first half of 2019, the sector’s capital adequacy ratio was above 22%, while credit to the economy was growing at 10% a year. 

Accommodative monetary policy has helped in this regard, as has growing confidence in the Serbian economy. This has emerged as a result of sound management from the NBS and other government agencies. Arguably, however, it is the Serbian banking sector’s improving asset quality that has played the greater role in reaching this point. Here, the NBS, under the guidance of Ms Tabakovic, has registered one of its most remarkable accomplishments. In 2019 the ratio of non-performing loans (NPLs) hovered at about 5%, down from as high as 22% in 2015. This swift turnaround owes much to the work of the NBS, which, as part of a wider NPL Resolution Strategy, introduced improvements to accounting standards and collateral assessment, among other measures, across the banking system to great effect. 

Despite this success, the NBS has continued to improve regulation and oversight to enhance Serbia’s prudential framework. This includes the December 2018 adoption of regulatory initiatives that restrict banks’ portfolios of long-term cash and consumer loans. It also includes debt-to-income limits on advances to individuals. Moreover, the NBS has also launched a survey of Serbian lenders’ exposures to unhedged foreign currency borrowers in the market. In doing so, the NBS will have a better understanding of the ways in which banks assess clients’ foreign exchange hedging and how these borrowers are subsequently managed by their financial institutions. 

In October 2018, the NBS initiated an instant payments system covering transactions with a value up to RSD300,000 ($2849). Under NBS requirements, introduced in April 2019, Serbian lenders are obligated to provide instant payments on all available payment channels including mobile and internet banking, over-the-counter transactions, bill payments and point-of-sale transactions, among others. The launch of this instant payments initiative feeds into another NBS objective: dinarisation. 

In an effort to promote the use of Serbia’s domestic currency and reduce the use of the euro in the economy, the NBS has enacted a number of initiatives to achieve this goal. This includes placing higher reserve requirements on foreign currency deposits. But instant payments are also expected to contribute, through the wider use of dinar-denominated mobile payments. According to IMF data, total banking sector deposit dinarisation was at 32% in April 2019, while total corporate and house credit dinarisation was 33%. In tandem, the ratio of dinar-denominated government debt was about 25%. Though this represents only modest growth following the country’s first dinarisation strategy in 2012, the pace of this reform could increase following a strategy revision in 2018. 

Meanwhile, in June 2019 Serbia was removed from the Financial Action Task Force’s grey list, meaning it is no longer subject to the monitoring process as part of the organisation’s continuous anti-money laundering and countering the financing of terrorism compliance function. Under Ms Tabakovic’s leadership, the NBS has played a vital role in achieving this through both its core regulatory and supervisory mandates. 

As a result of these measures, and others, Ms Tabakovic has secured the global Central Bank Governor of the Year Award for 2020. The stability of Serbia’s financial sector, as well as the broader success of its economy in recent years, owes much to her work. Yet Ms Tabakovic is not resting on her laurels. Efforts to improve the NBS’s oversight of the banking sector and enhance channels of communication with other public entities are under way. For these reasons, and others, Serbia can look forward to a brighter economic future. 

Central Banker of the Year, Americas

Julio Velarde, Central Reserve Bank of Peru

Peru is often singled out as one of Latin America’s few rising stars, with its steady economic growth and open market policies, but, as with its neighbours, it risks being held back by political spats and international tensions. This was all too evident in 2019. The year ended with president Martín Vizcarra dissolving Congress after accusing it of repeatedly blocking his anti-corruption reforms. The move had public support but invited greater public scrutiny of the cabinet, which led to further political tensions as well as high-profile resignations. 

Local tensions compounded an already challenging global environment that was shaken by trade tensions between the US and China. Both superpowers are key export destinations for Peru.

Despite this climate, financial stability was maintained. Much of this was thanks to the experienced oversight of Peru’s central bank governor, Julio Velarde, who has been at the helm of the monetary institution for more than 13 years. Mr Velarde helped keep Peru on track.

Increased volatility notwithstanding, the peso recovered from a slump in the middle of 2019 and foreign currency reserves were kept well stocked. The loosening of monetary policy led to more optimistic economic forecasts for 2020. The lower interest rate of 2.25%, cut twice by a total of 50 basis points in 2019, is set to translate into looser credit conditions, while lower inflation will boost real income in 2020. Although wobbling, gross domestic product growth remained well above most other economies in the region and is set to continue in 2020, while inflation remains comfortably within the central bank’s target range. Mr Velarde believes that wise monetary policy will support economic growth elsewhere in the region.

“The world economy and the Americas region faced significant challenges in 2019,” he says. “Trade tensions between the US and China and a surge of political unrest tested the resilience of Latin American economies. However, we expect global growth to rebound in 2020, as monetary and fiscal easing will partially offset the short-term spillovers from trade uncertainty. In Latin America, credible monetary policies should also contribute to restoring growth momentum, especially in countries with strong fundamentals.”

Central Banker of the Year, Asia-Pacific

Shaktikanta Das, Reserve Bank of India

India’s banks have faced a series of challenges, from non-performing loans to issues around fraud. Repeated economic slumps saw the central bank cut interest rates five times during 2019, and it was open to cutting them again if necessary.  

Faced with these challenges, Shaktikanta Das, governor of the Reserve Bank of India (RBI), has taken steps to bring banking in India up to standard via a restrained approach to governance. 

Mr Das has brought in measures to tighten the rules around shadow banking, refusing to bail out the non-bank finance companies. He is aiming instead for issues to be managed within the financial system, possible a risky move but one that will reduce dependence on the central bank. 

Lenders outside the traditional bank network have been placed under greater levels of scrutiny. Housing finance companies have been brought under the regulation of RBI and will adhere to the same rules framework of non-bank finance companies. 

The central bank has also been proactive in providing assistance to India’s smaller banks. As the threat from newer micro-finance institutions looms, Mr Das moved to help the country’s urban co-operative banks install a robust IT system that will allow them to offer banking services at a lower cost and with safeguards to protect the customer. 

The banking system itself has not gone without scrutiny. Mr Das has been outspoken on the lack of governance in banking, calling for tighter rules for the state-owned banks, which comprise 60% of India’s banking sector. To make the banking system more robust, the central bank is to set up a college for supervisors with the aim of improving supervisory skills. Sessions will be available on a continuous basis, to keep them on top of the latest developments. 

The central bank has also mandated banks to offer benchmark-linked lending rates, with most choosing to follow the RBI’s 5.15% repo rate. 

“An environment of macroeconomic stability, as reflected in low and stable inflation, notwithstanding its recent spike that is expected to be transient; a sustainable current account deficit; and rising foreign exchange reserves have contributed towards maintaining financial stability and laying a platform for sustained growth,” says Mr Das.

Central Banker of the Year, Middle East

Sheikh Abdulla Bin Saoud Al-Thani, Qatar Central Bank

After a turbulent few years, both Qatar’s economy and banking sector are in good shape at the start of 2020. Despite absorbing the impact of lower oil revenues, the country found itself the subject of a political and economic boycott by Saudi Arabia, Bahrain and the United Arab Emirates in mid-2017. 

Qatar’s commercial banks suddenly found themselves exposed to an exodus of non-resident deposits and a withdrawal of foreign interbank funding, adding up to a hit of about $30bn. The sector has been ably supported ever since the start of the blockade by Qatar Central Bank (QCB), which bolstered banks’ balance sheets with public sector deposits, helping them shrug off the impact of the regional boycott. 

Non-resident deposits and foreign bank funding have subsequently recovered, helping banks increase private sector credit, with the lenders successfully diversifying the geographical composition of non-resident deposits, the International Monetary Fund (IMF) noted. 

Heading into 2020, the sector remains stable, according to Moody’s Investor Service, with lending supported by strong infrastructure spending. 

While the introduction of VAT in January 2020 could see inflation jump as high as 3.7%, the measure is likely to return to about 2% in the medium term, according to the IMF. 

QCB has been led since 2006 by Sheikh Abdulla Bin Saoud Al-Thani, who first joined the institution in 1981. The 2020 Middle East Central Bank Governor of the Year award recognises Mr Al-Thani’s long-standing role in stabilising and strengthening the banking sector.

Also of note are improvements in the field of credit. Access to credit information from the country’s credit bureau – which operates under QCB’s supervision – improved thanks to the guarantee of access to credit information from borrowers, the provision of consumer credit scores to banks, and the bureau’s reporting of credit data from telecoms operators.

Such moves boosted Qatar’s standing in the World Bank’s Doing Business report for 2020. The country stood at number 77 in the rankings, up from 83 in the 2019 data, making it one of the top 20 improvers in the influential rankings. 

In the past year, a credit swap between Qatar and Turkey has expanded by as much as $2bn, a sign of the deepening alliance between the two countries. 

The central bank is also seeking to keep pace with regional fintech developments, and is set to announce its national fintech strategy in the coming months.

Central Banker of the Year, Africa

Tarek Amer, Central Bank of Egypt

Since assuming the governorship of Egypt’s central bank in 2015, Tarek Amer has been at the forefront of the country’s dramatic economic turnaround, in the process transforming the fortunes of its lenders. His reappointment for a second four-year term in November 2019 was widely seen as a credit-positive move for the country. 

The 2020 Africa Central Bank Governor of the Year award recognises not only Mr Amer’s positive macroeconomic impact, but his hands-on approach to the modernising of the country’s financial sector, not least via its ambitious Meeza national payment scheme. 

Mr Amer’s decision in late 2016 to let the Egyptian pound sharply devalue, together with his lobbying for an International Monetary Fund (IMF) bailout, have won him plaudits both nationally and internationally. 

The central bank’s move to let the pound weaken while keeping interest rates high – in concert with tighter fiscal policy from the Ministry of Finance – has helped narrow the country’s budget and current account deficits. After a jump following devaluation in 2016, inflation has continued to fall, hitting a 14-year low in late 2019, which has enabled the central bank to reduce interest rates. 

The IMF predicts Egypt’s economy will grow by 5.5% in 2019, one of the highest figures in the Arab world. 

Hand in hand with the central bank’s efforts to stabilise the economy have been its initiatives to modernise Egypt’s banking sector. Its lenders have benefited enormously from the country’s economic renaissance, posting some of the best performances witnessed across Africa.

Under Mr Amer’s leadership, the bank has been one of the key sponsors of the country’s new banking law, which is set to bolster the central bank’s independence, lift capital requirements for lenders, increase protection for consumers and promote digital services. 

In this latter category, the central bank has already been proactive, with the launch of the National Payment Council in 2017, chaired by Egyptian president Abdel Fattah el-Sisi. In 2018 the council launched the Meeza payment card, available in prepaid and debit form, in a bid to boost financial inclusion – which stands at about 32% – and reduce the country’s reliance on cash. About 2 million Meeza cards, which can be used to withdraw cash from ATMs, conduct e-commerce transactions and receive pension and subsidy payments, were in active use by the end of September with E£2.2bn-worth ($140m) of transactions handled between May and September, according to central bank data. 


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