The European Commission’s progress report highlighted that BiH has not yet applied for accession to the Single Euro Payments Area, which includes 41 countries.
Such operations would ensure more favorable and faster financial transactions in BiH, which would also reflect in a more favorable business environment through increased foreign investment.
Integration into the European Payments Area, in addition to faster and cheaper transactions, is also important for BiH because it would reduce the gray market, so that payments through bank accounts, instead of sending money by bus from abroad as before, would become more favorable.
“This is known best by everyone who cooperates with the EU as exporters or who are citizens who receive money from family members. It is estimated that savings of 100 million euros are expected at the BiH level,” explains Emir Kurtić, Vice Governor of the Central Bank of BiH.
The Central Bank of BiH, which coordinates the process of integration into the Single European Payments Area, says that in order to submit the application next year, it is necessary to complete the obligation to harmonize the domestic legal framework with the European one.
“These are entity laws on payment services, the drafts are ready, formal steps are underway to have the drafts reach the parliaments and to complete that step,” adds Kurtić.
“However, we are not limited to this legal part here, we also have other segments and laws that need to be revised in order to create the conditions for submitting the application to SEPA,” explains Faris Bogunić, Director of the Specialist Supervision Sector of the Federal Banking Agency.
Last year, the BiH diaspora remitted more than four billion marks to BiH, paying considerable transaction costs. By joining the SEPA area, international transactions would amount to almost the same as those in BiH payment transactions.
“It will result in increased financial literacy and financial inclusion, i.e., as many citizens as possible will open bank accounts, foreign currency accounts through which they will receive money at significantly lower fees,” added Bogunić.
“The Governor of the Central Bank of Bosnia and Herzegovina stated that this would make transfers up to six times cheaper – I transferred some money from Montenegro to Banja Luka and I paid SWIFT 1 percent of that transfer, which is an awful lot of money, otherwise it costs from 0.5 to 1,” says economic analyst Zoran Pavlović.
Lower fees would be an incentive to attract foreign capital, which would improve the investment climate that needs a reset.
“This would certainly mean lower costs for foreign investors who are currently facing complicated procedures when doing banking abroad,” emphasizes Marija Pušić, a lawyer and representative of the Foreign Investors Council.
While the conditions are being met and until BiH becomes part of the European payments area, millions of euros will be lost on transactions instead of being invested in projects.
