NBBH 'Gap' Has Been Closed

The last payment to close the gap in the former NBBH was made on Monday 9 August the Governor of the Central Bank of BiH, Peter Nicholl, and the Liquidator of the NBBH, George Mullinax, jointly announced.

The auditors and liquidator of the NBBH had assessed the gap in the NBBH accounts to be KM 38.8 million. The gap had arisen from loans the NBBH had made to the government of the former Republic of BiH which had not been repaid and to deposits made by the NBBH with Promdei bank, Zagreb, that had also not been repaid.

A plan was developed last year by Prime Minister Bicakcic. Under this plan, the Bosniac cantons and public utilities were to make regular payments to fill this gap in the NBBH. As the payments were made, the remaining deposits in the NBBH were able to be progressively transferred to commercial banks. The payments commenced in December, 1998 and have been made on a weekly basis since that time. The payments have been administered by the Payments Bureau (ZPP) and monitored by the CBBH.

"Every payment required under this plan has been made by the due date, " Mr. Nicholl said. "The Prime Minister is to be congratulated for developing the plan and the cantons, utilities and the payments bureau are to be congratulated and thanked for implementing it so smoothly."

"This brings to a full and satisfactory close a problem that had in late 1997 and early 1998 caused problems for the Currency Board that underpins and provides the stability for our KM currency, " Mr. Nicholl added. "An important part of the plan developed last year was that it had to protect the Currency Board from further breaches. This has been achieved. But the closure of the gap in the NBBH provides the ultimate assurance that no further problems for the Currency Board can arise during the process of liquidating the NBBH.

Mr. Mullinax said that "the completion of these payments and the transfer of all deposits is an important step in completing the liquidation of the NBBH. I will continue to try get the NBBH deposits back from Promdei bank through legal channels. There are also a few issues relating to other assets of the NBBH, such as buildings, furniture and a numismatic collection, that are still to be finalised. But the transfer of all these deposits to commercial banks simplifies the liquidation process significantly and brings us much closer to a conclusion" he said.