Interview of Governor to the Klix.ba portal: Registry of Accounts is a condition of the EU

Softić: The Single Registry of Accounts is a condition of the EU, it would be a great progress, and it does not harm anyone

The Governor of the Central Bank of BH, Senad Softić, spoke for the Klix.ba portal about numerous current issues from the banking sector, and especially about the Single Registry of Accounts.

How important is the Single Registry of Accounts for the functioning of the banking system in BH, i.e. its improvement?

The Single Registry of Accounts, which currently includes the accounts of business entities, has been established and maintained by the Central Bank of Bosnia and Herzegovina (CBBH) since 2004, while the Central Credit Registry of Natural Persons and Legal Entities has been maintained since 2006. It is clear that the CBBH has continuity in the activities conducted in the direction of establishing and maintaining the Single Registry of Accounts, including also natural persons' accounts, for which the intention, commitment, and legal basis to be covered by this Single Registry have existed since 2004 and these are still undisputed today.

The Registry of Natural Persons- Accounts on the territory of BH is extremely important for the efficient functioning of the entire banking sector. The Single Registry has a significant impact on the business environment in our country through the structuring of more fair and more transparent society. In addition to being particularly important in the fight against illegal activities, the Single Registry is an important mechanism for combating the financing of terrorism and money laundering, and facilitates the identification of debtors' accounts in tax enforcement and other court proceedings. For the population, this means a shorter path to exercising rights in court proceedings, such as divorce litigation, alimony payments, court decision enforcement and estate proceedings, etc.

In particular, for the banking sector, the Registry of Natural Persons' Accounts would ensure more efficient debt collection process. This again has benefits for citizens, because it encourages the banks to lend more and under more favourable terms.

What is the current situation in our country on this issue?

Currently, when authorized institutions request data on natural persons' accounts for any reason, they address to numerous commercial banks, and they need significant resources and longer period of time for such activities. I would like to mention that the Registry of Natural Persons' Accounts for the territory of Republika Srpska was established by the last amendment to the Law on Internal Payment Operations from 2019, and such a Registry, covering the Entity territory, operates under the jurisdiction of APIF. A similar solution is envisaged in the legislative framework in the Federation of BH. However, the need, justification and importance of establishing one Single Registry for the entire territory of BH is unquestionable, which in no way represents the transfer of competencies from the Entity to the state level.

At no time has the CBBH disputed the existence of such a Registry at the Entity level, such is the case with the Registry of Accounts of Business Entities, too. However, it is clear that an Entity Law cannot limit or diminish the powers that this institution has under the Law on the Central Bank of Bosnia and Herzegovina, related to the establishing and maintaining Registries, more precisely, Entity Laws cannot restrict and prevent state and other bodies from perform or exercise their mandated responsibilities, especially in relation to these issues that are of great importance to all participants in the financial system and users of these data.

The Registry users are institutions and entities for whose operating the insight into such kind of records is necessary. The single database on natural persons' accounts in the area of BH, as BH exists and operates as the single economic and social space, will certainly facilitate the work of security agencies, judicial and tax authorities. Through the transparency and availability of such data, we save time, human resources and material resources. Debt enforcement would be faster. Also, the importance of creditor protection through a timely response to debt claims is multiple.

What would the new „tool“ bring into our financial system, and where the largest improvements would be felt?

By upgrading the existing Registry, which currently includes the data on the business entities' accounts, and the data on credits of natural persons and legal entities, would also include the data on natural persons' accounts. Such records would include the data on a natural person and banks where such natural person has open accounts. In this way, the process of establishing a single registry for natural persons and business entities, which had started a long time ago, would be completed, which would considerably facilitate the work of all the participants in financial sector. The space for misuses within the financial sector decreases, procedures become faster and resources are saved.

Such practice is not an exception speaking of the European Union countries, as all the international organisations working in the area of prevention of corruption or combating the financing of terrorism activities ask for the creation of such single registries.

Single Registry of Accounts is a part of requirements of the IMF and international creditors, and is it an important condition for our country on its path to the EU integration?

The European Union asks all the member countries to set up such registries for the entire country for improving the single economic space and frameworks for preventing misuses and illegal activities in payment transactions. The CBBH is an institution of Bosnia and Herzegovina defined by the Constitution, which has a legal objective, in addition to ensuring the stability of the currency, also to help and maintain payment and settlement systems in BH and to conduct actions to help combating money laundering, to help anti-terrorist measures and measures against the obstruction of the implementation of the General Framework Peace Agreement in Bosnia and Herzegovina, related to banks.

Where is BH in relation to other countries in the process of banking operations transparency and how has this issue been regulated in Croatia and Serbia?

The countries in the region have already established centralised bank account registries. The single registry contributes to a more just environment and stronger financial system, so the upgrade of Single Registry in respect of including the Registry of Natural Persons' Accounts, cannot be harmful in any way for anyone in Bosnia and Herzegovina, while the benefits are multiple at the same time.