Achievements of the Central Bank of Bosnia and Herzegovina and Assignments in the Reform of Payments System

Within "the Manifestation of Progress and Humanism of BiH in Peace", which takes place from November 15 to 18 in Brcko, the Central Bank of Bosnia and Herzegovina made its presentation today. Expose with the title "Achievements of the Central Bank of Bosnia and Herzegovina and Assignments in the Reform of Payments System was given by Vice Governor Kemal Kozaric. Please find enclosed his report.

Office of Public Relations
Vildana Popovcevic

 

Central Bank of Bosnia and Herzegovina is established by the Law on basis of General Framework Peace Agreement for BiH. In the period of its three years existence the CBBH successfully performed its goals and assignments established by the Law. The successfulness of the CBBH can be proven by the results achieved through the realization of its main goals. This is illustrated by the following:
1. The Currency Board Arrangement has been fully adhered. Monetary liabilities are fully covered and net free reserves are 42 million KM, which is in relation to the previous year more for 13 million or for 45%.
2. The KM is accepted in the whole area of BiH. Other currencies, which use was allowed by the Law on the CBBH, are pushed aside from the payments system without the issuance of the special regulations. This confirms that the local currency KM gained the confidence with local population, and that it has its value. The KM is used abroad - Austria, Switzerland, Slovenia, Germany, Hungary, Croatia, Czech Republic, Slovakia and Turkey.
3. The CBBH is operating on the whole area of BiH. It has developed the network of its Main Units and Branches in Sarajevo, Banja Luka, Mostar, Pale and Brcko.
4. The strong fixed rate is provided. The coins of 1 and 2 KM are made, and the preparations for the production of 200KM banknote are underway.
5. Foreign currency reserves of the CBBH are 923 million KM. In relation to the starting position the foreign reserves are increased 7 times. Managing of foreign reserves of the Central Bank has been done in accord with the issued investment guidelines of the Governing Board and the conclusions and recommendations of the Investment Committee.
6. Payments system Related to the implementation of new payments system in Bosnia and Herzegovina, the CBBH continuously carries out important activities as well as in training and education of the commercial banks, so as in installation of equipment and software for the RTGS and GC in the CBBH. Then, education of its own staff and preparation of necessary organizational, book keeping and working procedures. Seminars for RTGS System, GC and SWIFT for all commercial banks were held. There have been held the meetings with all commercial banks with licenses for payments system operations, and in order to educate and also to define the progress i. e. establishment of internal procedures in banks in relation to internal payments system. All commercial banks are provided with necessary software additions for SWIFT and the exchange of SWIFT "keys" is organized. With this the Banks get the precondition for work in RTGS System. The exchange of all test messages is done in the period from November 8-10 of the year.
7. The regular meetings with Banking Agencies are held. Also good cooperation has been continued between two Agencies as well as the cooperation between the Agencies and the CBBH. One positive example of above mentioned ways of cooperation is the recent licensing with which the banks registered in one Entity open their branches in another Entity. The CBBH has coordinating role with the Banking Agencies - it follows the situation in the banking system and the statutory changes of the banks.
8. Institutions of BIH and the Entities Governments opened accounts with the CBBH.
9. Cooperation of the CBBH with state institutions of BiH is on very high level. The CBBH reporting is improved. The CBBH has been regularly analyzing monetary and economic trends in BiH. The Department for Research and Development has been informing regularly the relevant Authorities of the CBBH on the situation in the whole economy. Also reporting on monetary statistics was done regularly to IMF (monthly). The cooperation with BiH Ministries was also done.
10. The CBBH is all the time present in media in order to present important activities from the area of payments and banking system. There has been accented the education, not only of the CBBH staff but further on - of the participants into the banking and payments system and informing of the population through media.
11. We are free to say at the end, that the CBBH, is for sure the best organized, namely, the most efficient common institution of BiH state, and that it is example that the functioning of joint institutions is possible.