The Fund Management Company of the Repubika Srpska (RS) – this is how the Investment Development Bank of this BiH entity, which should become a commercial bank, was registered.
Minister Zora Vidovic explained that the transformation of the bank is not related to “protection from the United States (U.S.) sanctions,” though the opposition disagrees.
IRB has not commented on the transformation of this fund management company into a commercial bank owned by the entity.
In a previous public statement, IRB mentioned that its “strategic goals remain the same – to encourage investment and support development in RS.”
Political or economic motives?
The RS government previously announced that this was an “expansion of activities” so that IRB could also engage in “receiving monetary deposits and conducting payment transactions.” They also claimed that IRB would open branches in areas where other banks have no commercial interest.
“Minister Vidovic stated that IRB would only handle domestic payment transactions, not international ones, raising questions about the bank’s purpose,” stated Diana Cekic, an economist and representative of the opposition Party of Democratic Progress in the RS assembly.
Azra Hadziahmetovic, a professor at the Faculty of Economics in Sarajevo, emphasized that the transformation of IRB RS from a fund to a commercial bank is “primarily a political issue.”
“I think the attempt to transform IRB RS into a commercial bank is primarily to resolve issues related to individuals and companies on the ‘blacklist.’ This could jeopardize the operations of IRB RS and the entire financial system of Bosnia and Herzegovina (BiH), not just RS,” Hadziahmetovic believes.
In response to the RS government’s decision to commercialize IRB, Transparency International BiH (TI BiH) issued a public statement.
“It can be concluded that this favors the narrow particular interests of the ruling regime in RS and its close crony business structures that have previously enjoyed privileged status,” stated TI BiH.
