30 million euros for support of the banking sector

(Patria) - Deputy Chairman of the Council of Ministers of BiH and Minister of Finance and Treasury Vjekoslav Bevanda and Director of the European Bank for Reconstruction and Development /EBRD/ Office in BiH Manuela Nessl today signed a loan agreement worth 30 million euros intended for the support of the Deposit Insurance Agency (AOD) and the banking sector in BiH.

Minister Bevanda emphasized that it is extremely significant that these funds were secured during the pandemic when the economic situation is changing, and thus the banking sector, which opens up certain business risks.

“The financial sector is the backbone of every economy, and its stability is a priority for every country. The Agency is one of the participants in the financial safety network and has a special role in
preserving stability. That is why this project is even more important,” emphasized Minister Bevanda.

The project will be implemented in such a way that the Agency will secure Stand-by arrangements in the form of a credit line in the amount of 30 million euros, having available reserved funds that can be used under specially defined conditions and circumstances. This will also fulfill certain conditions for the existence of a reserve credit line in accordance with the recommendations of the International Monetary Fund (IMF).

Based on this agreement, the loan terms are favorable with a repayment period of eight years, including a five-year grace period for principal repayment, and loan repayment in 16 equal semi-annual installments. Minister Bevanda emphasized that cooperation with the EBRD yields results in many areas of life throughout BiH, and that this agreement has strengthened both the banking sector and the agency that regulates this area.

The agreement was once again signed correspondentally, without the usual ceremonies, due to the measures taken to prevent the spread of the Covid-19 virus and prescribed epidemiological measures.