Amendments to the package of laws regulating the banking sector represent the most direct capture of the RS institutions

Banja Luka, July 3, 2024 – Urgent changes to the laws that regulate the banking sector and the work of the Investment Development Bank of the Republic of Srpska (IRB RS)  lead to the direct capture of the institutional framework by private interests and directly threaten the functioning of the entire banking system in the RS, and exposes the IRB to high risk.

Proposals amending the provisions of the Law on Banks of Republika Srpska, the Law on Investment and Development Bank, and the Law on Internal Payment Transactions were put on the agenda the day before the session itself at the request of the RS Government through urgent procedure, which confirms the suspicion that accelerated procedures are put in place to exclude the public from the decision-making process, thus endangering the public interest and the interest of the citizens of Republika Srpska.

Such changes are contrary to the primary purpose and role of the IRB RS, and it can be concluded that they favor the narrow particular interests of the ruling regime in the RS and cronyist business structures adjacent to it, which enjoyed a privileged status.

Until now, the IRB RS has functioned in a completely non-transparent manner, so the MPs waited for the reports of this institution for several years, from 2015 to 2019, which deprived the public of information about claims worth 180 million, which were eventually bought for 32 million by the private company because the IRB RS was unable to collect them.

The dangerous intentions of the ruling regime, which are aimed at the complete mastery and capture of the decision-making process in matters of vital importance for citizens, are also evidenced by the proposal to amend the Law on Geological Surveys, which was also presented to parliamentarians, and which deprives local communities of the opportunity to prevent exploitation natural raw materials that threaten their environment.

Taken as a whole, the proposed changes not only threaten the independence and stability of the IRB as a catalyst for economic growth, but also call into question the sustainability of payment transactions of all business entities in the Republic of Srpska, banks that do business with the IRB, and natural persons who are users of credit and other funds placed through this institution.

Transparency International calls on the Government of Republika Srpska to withdraw the mentioned proposals and the MPs to reject these changes, which do not have the character of a general legal framework that works for the benefit of citizens, but allow the institutions of society to be put at the service of a group of powerful people who want to preserve their wealth acquired through corrupt activities and avoid sanctions for such behavior.