Bosnia’s state-level prosecution said on February 2 it has issued indictments against 16 individuals for their role in draining around BAM122.5mn (€63mn) from the now bankrupt Bobar Bank. Those indicted include the heads of a regional investment bank and banking agency. 

This is the first ever investigation in the country for a scam worth more than BAM100mn. Bobar Bank was one of three banks in Republika Srpska, into which the Bosnian prosecution launched probes last year along with Banka Srpske and Pavlovic Banka. 

In March last year, the Bosnian State Investigation and Protection Agency (SIPA) arrested the head of Republika Srpska’s banking agency, Slavinica Injac, as well as Snezana Vujnic, who is director of the entity’s state-owned Investment and Development Bank and eight others on accusations of issuing illegal loans and guarantees on behalf of Bobar Bank.

Now the prosecution has accused them and six others of causing the bankruptcy of the bank by organising a criminal enterprise to take control of it. The defendants were also accused of illegally extending loans worth millions of euros to members of the Bobar business group without guarantees.

"In this way, they caused financial collapse of the bank and loss of deposits held in the bank by companies, government services and citizens," the prosecution said in a statement.

It added that the accusations will be proved by 60 witnesses and more than 2,500 documents that have been gathered during the investigation.

Bobar Bank went bankrupt in 2014, as its shareholders failed to draft a recovery plan after major losses were uncovered. Many state institutions in Republika Srpska, as well as health funds, employment bureaus, utilities, pension funds and citizens have lost their deposits in the bank.

Injac was also suspected of participating in a scheme in Banka Srpske, which led to hundreds of millions of Bosnian marka worth of its clients' savings being stolen when they were invested in fake companies.

In February last year, SIPA arrested the owner of Pavlovic Bank, Slobodan Pavlovic, along with three other bank employees, on accusations of money laundering, abuse of power and forgery of official documents.

Local media speculated at the time that the arrests were connected to the purchase of a €1.26mn villa in Serbia’s capital Belgrade in 2007 by the entity’s President Milorad Dodik. Dodik has said he purchased the villa according to the law, using the bank loan. However, local media claimed that he paid in full for the villa, and the loan was only extended in 2008, raising questions about the origin of the money.