September 29 (SeeNews) - The banking agencies of the two entities that form Bosnia and Herzegovina - the Federation and the Serb Republic, decided to introduce temporary measures aimed at mitigating the risk of significant interest rate hikes.
Under the new regulations, banks in both entities have to take measures to lower credit risk for clients and offer borrowers the option to modify their credit exposure if the default status occurs as a direct consequence of a significant increase in interest rates, the two banking agencies said in separate statements on Wednesday.
Banks will also be required to establish a controlling process in order to plan, analyse and monitor the factors that could lead to interest rates increases.
The measures aim to stimulate banks to find ways to maintain interest rates at reasonable levels, in order to avoid negative effects on the economy and borrowers, the banking agencies said.
The Federation's banking agency added it will implement enhanced supervisory measures, especially in the first quarter of 2023, in order to monitor the implementation and effects of the decision.