Bosnia’s Republika Srpska declares war on “blackmailing” banks

Bosnia’s Republika Srpska declares war on “blackmailing” banks
Republika Srpska MPs at this week's plenary session. /
By bne IntelliNews June 7, 2023

Radovan Viskovic, prime minister of Bosnia & Herzegovina’s Republika Srpska, threatened on June 6 to “get rid of” commercial banks he claims are trying to cause the economic collapse of the entity. 

Viskovic proposed to Republika Srpska lawmakers that the entity should open its own bank to prevent “blackmailing by private banks” in the financial sector. 

He claimed the owners of some commercial banks order them not to do business with the entity’s institutions and that the entity must “get rid of them”.

“They want to see the economic collapse of Republika Srpska but one thing is for sure — that Republika Srpska will not go bankrupt,” said Viskovic as widely quoted in local media. 

Viskovic noted that Republika Srpska had a state-owned bank named Banka Srpska back in 2013, but it went bankrupt in 2017, following a series of probes in the banking sector

It was created in 2013 after the government took over the bankrupt Balkan Investment Bank, until then owned by Lithuanian UKIO Group. Republika Srpska increased its capital by BAM30mn at the time. 

Viskovic said that the bankruptcy procedure for Banka Srpska should be completed soon and after that the government intends to start a new bank that would unite with the Investment Development Bank (IRB).

Bosnia consists of two autonomous entities – the Muslim-Croat Federation and Republika Srpska, each of them having its own institutions. There are also state-level bodies.

Viskovic pointed out that the interest rates in the Federation are lower than in Republika Srpska, because the Federation has a development bank which influences the market.

Earlier this year, Republika Srpska issued a five-year T-bond worth BAM210mn (€107.4mn) at record-high interest rate of 6.1%. This is much higher compared to the 3.8% interest rate achieved by the Federation.

Viskovic was picked for the prime minister position in 2018 by Milorad Dodik, currently president of Republika Srpska. Dodik has frequently called for the Serb entity’s secession from Bosnia, and is an ally of Russian President Vladimir Putin.