Misunderstanding With Commercial Banks on Charging of the Commission for KM to DM Exchange, as Well as Vice Versa, Solved

The Central Bank of Bosnia and Herzegovina has clarified for commercial banks in Bosnia and Herzegovina, the meaning of the CBBH Law article 33 paragraph 2, in order to resolve a dispute over the charging of commissions for the exchange of KM into DM and DM into KM. This dispute has led some banks to decline to provide these services, which has consequently led to considerable inconvenience for people.

The language of the CBBH law specifically refers to "ON DEMAND" exchanges. "ON DEMAND" transactions between a domestic and foreign currency typically require a waiting period of 48 hours. For these exchanges, the CBBH stands firmly behind the Law's prohibition of charging taxes, commissions and other charges, so that will be at 1 for 1.

However, it has been decided for "Over the Counter" transactions, or immediate exchanges, the banks will be allowed to charge up to a maximum of 1 percent handling charge or commission. This is consistent with the CBBH law.

The CBBH understands that banks in Bosnia and Herzegovina do incur costs in carrying out these transactions. Allowances should be made to compensate them for these costs, if we want banks to provide this service to the public.

On the other hand, consideration for the CBBH law and for those citizens wishing to make a 1 to 1 exchange between DM and KM has been preserved by prohibiting any fees for the "ON DEMAND" transaction. The CBBH realizes that this may be inconvenient for some citizens, and will require them to allow more time and planning before exchanging their Konvertable Marks into Deutsche Marks or vice versa.