Government against parliamentary proposal: Proposal for conversion of Swiss franc loans to KM not accepted

The Federal Government did not accept the Bill on the conversion of loans with a Swiss franc (CHF) clause into convertible marks (KM) at today's session, which was proposed by MPs in the House of Representatives of the FBiH Parliament, according to a statement from the FBiH Government, reports the Patria News Agency.  

The application of the proposed solutions, the Government believes, would result in legal uncertainty in the country due to retroactive elements in the Law. Among other things, the equality of loan beneficiaries with a euro clause, who in practice had even double the interest rates compared to loans approved with a CHF clause, would be called into question.

Furthermore, by applying the proposed law, the federal budget would be exposed to risk and a possible deficit in case of bank challenges due to the proposed legal solutions and claims for damages. Also, there is a risk of jeopardizing the financial stability and operations of the bank, which could consequently jeopardize the security of its depositors and other creditors.

According to the opinion of the FBiH Government, the resolution of this issue should be based on several premises, the priority of which is the voluntary search for solutions between the bank and the client, e.g., conversion of existing loans with a CHF clause into loans with a euro or KM clause.

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 the loans to resolve their housing issues.

The resolution of the problem should apply only to existing loan agreements of natural persons, and not, as proposed in the parliamentary proposal, to persons who have somehow resolved this issue and who used the loans for business purposes. The position of the FBiH Government is that the proposed solutions should also be based on providing relief to clients through debt restructuring and interest write-offs.