The Role of the Central Bank of BiH in the Production and Circulation of the BAM

One of the basic tasks of the Central Bank of Bosnia and Herzegovina is to put into circulation and withdraw from circulation the domestic currency (convertible mark), including banknotes and coins as legal tender, strictly adhering to the rules of the currency board, defined by the Law on the Central Bank of Bosnia and Herzegovina, writes the Patria news agency.

The monetary unit of Bosnia and Herzegovina is the convertible mark (BAM), which is divided into 100 feninga, and banknotes and coins denominated in BAM are legal tender on the territory of Bosnia and Herzegovina.

The CBBiH issues and organizes the printing, i.e., minting of banknotes and coins, determines the denomination structure and basic features of banknotes and coins. The Governing Board of the CBBiH adopts an act on the issuance and withdrawal of BAM banknotes and coins. The Central Bank is the only entity in Bosnia and Herzegovina that can engage in the procurement, production and issuance of the domestic currency – the convertible mark.

The CBBiH puts banknotes and coins into circulation through its main units and commercial banks. Commercial banks supply the real sector, the population and other entities with BAM cash. The CBBiH ensures the regular supply of commercial banks with cash through the treasuries of the main units in Sarajevo, Banja Luka and Mostar and the branch in Brčko, and replaces banknotes and coins that are unfit for circulation. This ensures a continuous supply of cash to all entities in Bosnia and Herzegovina in accordance with circulation needs and maintains the quality level of BAM cash in circulation.

The creation of BAM banknotes and coins, in the case of a changed or new design, begins with the preparation of conceptual sketches according to the denomination structure by authorized organizations for the production of banknotes and coins in Bosnia and Herzegovina and abroad, or by announcing a competition for the production of these sketches. After the adoption of the conceptual sketches, the CBBiH entrusts the production of final drawings, i.e., models, to authorized organizations in accordance with the Law on the Central Bank.

Upon selection of the final drawings, i.e., models, the CBBiH determines the basic features (dimensions, text, etc.) of the banknotes and coins. The design of banknotes and coins is approved by the Presidency of Bosnia and Herzegovina. The CBBiH publishes the act on the basic features of BAM banknotes and coins in the official gazette of Bosnia and Herzegovina, the official gazettes of the entities and the Brčko District of Bosnia and Herzegovina.

In accordance with the projected circulation needs and cash stock levels in the treasuries, the CBBiH plans the production of the required quantities of BAM banknotes and coins.

During each specific production of convertible mark banknotes and coins, through a contract with the selected authorized company for the production of banknotes and coins, all elements are precisely defined that ensure the continuous achievement of the Central Bank's basic goal regarding the quality, lifespan and protection of BAM cash from counterfeiting.

 

The production of BAM banknotes and coins is carried out in highly specialized and licensed printing houses and mints in Europe.

Regarding the technical production of BAM cash, the CBBiH defines the quality and technical characteristics of the paper for banknote production, printing inks for banknotes, printing methods, the level of security features of banknotes, the quality of metal, the metal composition and technical requirements for coin production. During the preparation and production process of BAM cash, the Central Bank continuously monitors the individual phases of money production in order to meet technical and quality requirements and implements detailed security measures in the process of producing BAM cash.

The goal of the CBBiH is to ensure that the Bosnian-Herzegovinian currency in circulation has the characteristics of quality, lifespan and protection against counterfeiting at the level of current technological standards in European Union countries.

Detailed information on BAM banknotes and coins and the security features of BAM banknotes is available on the website www.cbbh.ba, under the category „Money of BiH“.

BAM banknotes contain four different levels of protection: security features for the public that can be checked without equipment, security features for experts visible with the help of appropriate equipment, machine-readable features recognized by counting and sorting devices, and security features intended exclusively for verification on devices at the Central Bank. The CBBiH works on the continuous improvement of security features in accordance with technological standards, and in the past period, compared to earlier issues of BAM banknotes, certain security features have been replaced by others, primarily with the aim of improving the quality, i.e., durability of these features, their easier recognition by the public, and especially to prevent their counterfeiting, following the latest developments in this field. It is important that the population of Bosnia and Herzegovina is familiar with the security features of BAM banknotes so that by checking them they can verify the authenticity of the BAM banknotes they encounter in circulation.

Since the establishment of the CBBiH, BAM banknotes have been produced, depending on the needs of the denomination structure, in the issue years: 1998, 2002, 2007, 2008, 2009, 2012, and coins in the issue years: 1998, 2000, 2002, 2003, 2004, 2005, 2006, 2007, 2008, 2009, 2011 and 2013.

In the past period, for more practical use of coins in circulation, BAM banknotes of denominations 50 feninga (ceased to be legal tender on 31.3.2003), 1 BAM (ceased to be legal tender on 31.12.2008) and 5 BAM (ceased to be legal tender on 31.12.2009) were withdrawn from circulation. The exchange of these banknotes is carried out, in accordance with the Decision on the exchange of BAM banknotes of denominations 50 feninga, 1 and 5 BAM, through commercial banks, until December 31, 2017.

The exchange of damaged BAM banknotes and coins is carried out in accordance with the Rulebook on handling banknotes and coins of the convertible mark and banknotes of foreign currency unfit for circulation, published in the “Official Gazette of BiH” number 36/13. Exchange in cases where the submitter presents more than 60% of a BAM banknote is carried out through commercial banks in full amount and without charge. The CBBiH also accepts these banknotes from commercial banks, through its treasuries, in full amount and without charge. Only in the case of exchange when 60% or less of a BAM banknote is presented, and the submitter can prove that the missing parts have been destroyed, the exchange request is submitted on the prescribed form to the Central Office of the CBBiH in Sarajevo or the Main Bank of the Republika Srpska of the Central Bank of BiH in Banja Luka, where the authenticity of the banknote is assessed and it is determined whether there is a basis for full or partial compensation.

In Bosnia and Herzegovina, we record a continuous increase in BAM cash in circulation, which as of September 30, 2014 amounts to 3.1 billion BAM, indicating a high level of BAM cash in circulation and use in Bosnia and Herzegovina.

We are pleased to highlight the high level of quality of BAM cash and protection against counterfeiting, which are ensured in the production process of BAM cash, thereby ensuring the integrity and protection of money in circulation, and thus confidence in the monetary unit of Bosnia and Herzegovina.

(Text prepared by the Treasury Department of the Central Bank of BiH)