At a time when consumption is being encouraged as an important generator of economic recovery and the purchasing power of the population is declining, savings are gaining through smarter spending of the money, we have at our disposal.
Data from the Central Bank of Bosnia and Herzegovina (CBBH) at the end of September 2020 illustrate that total household deposits with commercial banks in Bosnia and Herzegovina had a record amount of 13.35 billion BAM.
Household deposits have by far the largest share of 54.9 %, in total deposits with commercial banks, and therefore they represent the most important source of the funds on the basis of which commercial banks can finance lending activities.
Observed by maturity structure, time and savings deposits of households amount to 5.49 billion BAM or 41.1 % of total household deposits, of which short-term deposits account for 393 million BAM and long-term deposits of 5.09 billion BAM. Transaction accounts and demand deposits account for 7.86 billion BAM or 58.9 % of total household deposits.
In terms of currency structure, household deposits in domestic currency amount to 6.07 billion BAM, which is 45.4 % of the share, significantly more than seven years ago when the share of deposits in domestic currency was below 40%. This increase in the share of deposits is a clear indicator of confidence in the convertible mark. Deposits in euros and with a currency clause linked to the euro currency amount to 6.65 billion BAM or 49.8 %, and the share of deposits in other foreign currencies is 4.7 %.
The data show that household deposits in Bosnia and Herzegovina are continuously increasing, thus, compared to the end of September last year, they increased by 454 million BAM or 3.5 %. However, there are significant differences in the trends of deposits depending on the type of deposit. Transaction accounts increased by 13.1 % (or 500 million BAM), and demand deposits increased by 3.6 % (or 124 million BAM). Time and savings deposits, which reflect savings, recorded a slight decline of 3.0 % (or 170 million BAM) on an annual basis.
Despite the expanded banking network and continued trust in banking institutions, a part of the population in Bosnia and Herzegovina still does not have established business relations with banks. According to the World Bank, in our country 59 % of the population over the age of 15 have opened bank accounts, while only 43 % of the work inactive population have open accounts. Compared to other European countries, these are quite low percentages, because as many as 95 % of the population in the euro area countries have open bank accounts, in Croatia that percentage is 86 %, and in Serbia 83%. On the occasion of the International Savings Day, the use of financial services should be promoted again, which can encourage general development, because they help finance health, education and entrepreneurship, and alleviate financial shocks to the population. Globally, there is a large gap, with those with higher incomes using financial services much more than the poorer ones.
A stable domestic banking sector, along with a reliable deposit insurance system, provides a guarantee to the population to keep their financial resources in bank accounts, to use financial services more widely and to manage their finances more reliably. Based on this trust and the entrusted funds of the population, banks are able to finance and contribute to the more efficient functioning and growth of the economy, and to help reduce informal transactions.
“Savings are also the rational attitude towards resources, towards the consumption of water and electricity … Today, savings are reflected through self-sustainable projects, as in every used fruit from nature, cultivated piece of uncultivated land to be planted, and piece of paper to be recycled. In that way, it becomes income for future consumption. Our citizens are aware of the importance of savings. Today, it no longer means just taking care on money spending, but also the different attitude towards existing resources,” said the Governor of the CBBH, Senad Softić Ph.D. on the occasion of the International Savings Day.