On 05 January 2021, it was 20 years since the establishment of the payment systems of the Central Bank of Bosnia and Herzegovina (CBBH). The establishment of the payment systems was carried out within the payment system reform, which is considered one of the most successful reforms in Bosnia and Herzegovina.
The process of the CBBH payment system establishment included the complete transformation of performance of internal payment transactions in Bosnia and Herzegovina, i.e. the transfer of payment system from payment bureaus to commercial banks, which meant that payment bureaus ceased to exist. By the agreement of all the relevant institutions in Bosnia and Herzegovina, it was decided that payment system reform should be carried out with purpose of increasing its competitiveness, efficiency, speed of transactions and decrease of costs. The reform meant that instead of payment bureaus, those in charge of the payment system would be commercial banks licenced to perform payment system operations and the CBBH, the obligation of which was to set up payment and settlement systems which would enable the performance of transactions.
The reform achieved its objective and made possible the accelerated development of banking market and expansion of the offer of banking services for end users, many of which would not have been possible without the reform. The new payment system has introduced a number of advantages.
Speed – each transaction between any two commercial banks in the territory of Bosnia and Herzegovina is completed in real time or within the same business day.
Reliability – since 05 January 2001, when the then ABS banka performed the first transaction, up to date, more than 622.9 million transactions have been carried out in the total value exceeding KM 1,362 billion. Even in the periods of natural disasters, such as the 2014 floods or the ongoing COVID-19 pandemic, the payment systems have been functioning without any delays or problems.
Strengthening financial discipline. Within the payment system development during the years, additional functionalities have been introduced, such as platform for interbank money market, settlement system for international payments with the Republic of Serbia, Central Registry of Credits of Legal and Natural Persons and Single Registry of Accounts of Legal Persons. The existence of the Registries made possible the strengthening of financial discipline, decreasing the possibilities of frauds and contributed significantly to the fulfilment of Bosnia and Herzegovina obligations related to prevention of money laundering and terrorism financing.
Since the first business day, the real time gross settlement system (RTGS) – for payments over KM 10,000 and giro clearing system for transactions in the amounts equal or lower than KM 10,000 have been functioning within the payment systems in a successful and stable way. During the years, the system has been upgraded continuously in order to meet all the necessary technological and safety standards, the largest step was made in 2019 when the giro clearing system was adjusted with the operating way of the European Union (EU), thus creating the conditions for a faster integration of the payment systems of the CBBH and participants in the EU developments.
On this occasion, the CBBH would like to particularly thank the United States Agency for International Development (USAID), which has been the key partner in establishing the payment systems, and has helped the establishment of the Registries in the CBBH.