The National Assembly of the Republic of Srpska, at its session scheduled for May 15, 2025, will consider the Draft Law on Amendments and Supplements to the Law on Banks of the Republic of Srpska.

This represents the most extensive reform of banking legislation in the past decade, aiming to align the legal framework of the Republic of Srpska with modern European Union standards, including key directives and regulations from the CRD V/CRR II, BRRD II, and PSD2 packages.

Key proposed changes introduced by this law include:

• Prohibition of certain fees charged by banks to customers, including fees for payment reminders, loan administration, issuance of debt balance certificates, ATM balance inquiries, and cash withdrawals using debit cards at the bank's own ATMs;

• Reduction of the statutory minimum capital adequacy ratio from 12% to 10%, with the Banking Agency retaining the authority to set higher requirements for individual banks based on specific risk profiles (SREP approach);

• Introduction of electronic contracting, recognizing electronic format as equivalent to written format, provided compliance with regulations on electronic signatures and durable media;

• Enabling video identification of clients during account opening and contract conclusion, in response to the growth of digital communication channels and in line with European e-identification practices;

• Formalization of automated decision-making in credit processes, with an obligation for banks to offer customers the right to human review if their application is denied by an automated system;

• Establishment of a legal framework for the write-down and conversion of capital instruments and liabilities during crisis situations, in accordance with the "bail-in" mechanism under the BRRD Directive;

• Introduction of MREL requirements (Minimum Requirements for own funds and Eligible Liabilities), with defined timelines for gradual compliance, to ensure readiness for potential resolution;

• Modernization of supervisory processes, including the introduction of temporary moratoriums on bank payment obligations to prevent destabilization of the financial system in the event of operational threats;

• Possibility of loan portfolio transfers without prior Agency approval, under clearly defined criteria, and allowance for sales to unregulated investment funds subject to prior approval by the Securities Commission;

• Detailed regulation of claim settlement priorities in bank liquidation proceedings, with a special focus on the treatment of insured and uninsured deposits of individuals, SMEs, and other creditors;

• Clear rules regarding the discontinuation of reference interest rates (e.g., EURIBOR), and the authority of the Agency to prescribe a substitute reference value if none has been previously agreed upon.

The proposed law provides a nine-month transition period for banks to align their operations with the new provisions, after which the Banking Agency of the Republic of Srpska will begin supervising compliance.

These amendments aim to enhance the stability of the banking system, improve consumer protection, and respond to modern technological and regulatory challenges. They also represent a significant step toward the harmonization of domestic legislation with EU standards and contribute to Bosnia and Herzegovina's integration into the European legal and financial framework.

Law Office Stevanović and Standard Prva Group invite all legal and natural persons engaged in banking activities within the Republic of Srpska to closely follow the legislative process in order to prepare in a timely manner for the obligations and changes set out by the law.

For more information, expert legal interpretation, or support in preparing documents and ensuring compliance with the new law, please contact us by email or visit our office in Bijeljina.

/ / /

"Standard Prva" LLC Bijeljina is a company registered in Bijeljina at the District Commercial Court in Bijeljina. Company’s activities are accountancy, repurchases of receivables, angel investing and other related services. Distressed debt is a part of the Group within which the company repurchases the receivables, which function and are not returned regularly.

Lawyer’s Office Stevanović is the leading lawyer’s office in the region with the seat in Bijeljina. The LO abbreviation represents Lawyer’s Office of Vesna Stevanović and Lawyer’s Office of Miloš Stevanović.

Contact for media press@advokati-stevanovic.com or via telephone 00 387 55 230 000 or 00387 55 22 4444.