MMF reinventing the wheel: Entity banks under brutal political pressure

Besides the conditions that MMF dictates in relation to Bank of Srpska, the exit of RS government from the banking sector, more precisely from Credit Board of the Investment and Development Bank to Bank of Srpska, was one of non-disputable conditions of the credit arrangement with MMF.

Members of the Credit Board were Zeljka Cvijanovic, the RS Prime Minister, Zoran Tegeltija, Finance Minister of RS, Petar Djokic, Minister of Industry, Energy and Mining, Djuka Huremovic, Adviser to Prime Minister and Dalibor Tomas, Adviser to Zoran Tegeltija.

Bank without serious investments

Two entity banks run political parallel slalom. Development Bank of FBiH saw a public political appointment of Director by SDA. Bakir Izetbegovic, the first person of SDA launched Salko Selman as his private and political choice.

HDZ BiH also aimed at the position of Director of FBiH Development Bank. Supervision boards were created in identical manner. Mustafa Mujezinovic was appointed to a new SDA supervisory board, yet he suddenly withdrew and created space for former deputy finance minister Fuad Kasumovic. Asim Omanic, former first Director of Development Bank and Amir Avdic also joined the board.  

HDZ BiH appointed Zeljko Karacic, finance adviser to Mayor of Mostar, Anamarija Bobay and Zvonko Landeka, former Director of coalmine from Posusje.

Soon after taking up the position, Fuad Kasumovic noticed negative finance indicators, including poor credit investments as some 60% of the bank capital is not invested. The bank capital in itself was also problematic, said Kasumovic.   

Nothing was done to correct the situation. Some say that the bank was giving away loans to 'the losers', that millions of KM were wasted and that the current Assembly headed by the Prime Minister Novalic is trying to hide all that from the public.

Unclear situation of FBiH Development Bank

How come that the new management of FBiH Development Bank has never implemented an audit? How come that Federal Government has never requested control of investments and receivables? Some claim that HDZ members of Supervisory Board banned the control because it is this political party that received all sorts of loans and some were even 'forgiven'.

SDA exerts the same amount of political pressure. Some say that 'Cimos' was also a client of Development Bank at the time Prime Minister Novalic was its director.

To conclude, the bank is in the hands of the government and the key role in appointing director and supervisory board is played by political parties, which is the worst kind of dependence. They do business in the same way they appoint their party officials- without much economic reason and with a high amount of risk. So far MMF has not been bothered by the political pressure on the Development Bank.