FBiH Government Sides with Banks: Bill on Conversion of Swiss Franc Loans Rejected

The Federal Government did not accept the Bill on the conversion of loans with a currency clause in Swiss francs into convertible marks, submitted by MPs in the House of Representatives of the Parliament of the Federation of BiH - members of the Commission for examining the legality of loan placements in Swiss francs Mirza Ganić, Sanel Razić, Radoslav Luburić, Vjekoslav Bakula, Dženan Đonlagić, Hasan Muratović and Azra Hadžiahmetović.

- The position of the FBiH Government is that the application of the proposed solutions would create legal uncertainty in the country due to the retroactive elements in the Law. It would also call into question the equality of loan beneficiaries with a currency clause in euros who have even double the interest rates compared to loans approved with a currency clause in Swiss francs.

The application of such a law would expose the federal budget to risk and a possible deficit in case of bank challenges due to the proposed legal solutions and claims for damages. There is also a risk of jeopardizing the financial stability and operations of the bank, which could call into question the security of its depositors and other creditors.

The Government believes that the problem should be resolved through a voluntary agreement between banks and clients, so that, for example, existing loans in Swiss francs are converted into euros or convertible marks under the terms for this type of loan. The subject of voluntary resolution should be clients (exclusively natural persons) whose approved loan amounts do not exceed 150,000 KM in accordance with the Law on the Protection of Financial Services Users and who used loans to resolve housing issues.

The resolution of the problem should apply only to existing loan agreements of natural persons, and not, as proposed, to persons who have somehow resolved this issue and those who used loans for business purposes. The opinion of the FBiH Government is also that the proposed solutions should be based on providing relief to clients, such as, among other things, loan rescheduling and interest write-offs - stated the FBiH Government.