Bosnians Pull 256 Mln Euro in Bank Deposits on Global Crisis Fears, Trend Slowing Down - Media

The sum is equal to some five percent of all deposits, daily newspaper Nezavisne Novine quoted Kemal Kozaric as telling a forum in Sarajevo.

“The worst part of the crisis is behind us, and we have walked successfully through the first wave of blows on the financial sector,” Kozaric said.

Last week, the central bank scrapped its mandatory reserves requirement for local banks' credit lines with foreign lenders to stimulate the inflow of capital to the domestic banking sector and provide an additional incentive for the credit activities of commercial banks.

The measure follows a central bank decision earlier in October to reduce the mandatory reserve requirement for commercial banks to 14% from 18%, boosting the banks' liquidity in response to the global financial crisis.

In another move earlier this month, Bosnia’s central government adopted legislative amendments raising bank deposit guarantees for individuals to 20,000 marka from 7,500 marka and sent them to parliament for approval.

Kozaric called on citizens to trust the banks but at the same time suggested that banks do not raise interest rates on loans, Nezavisne reported on Monday.

According to the latest central bank data, the deposit portfolio of commercial banks operating in Bosnia rose 1.1% on the month to 13.008 billion marka at the end of September. Demand deposits rose 1.2% to 6.166 billion marka, whereas savings and term deposits rose 1.1% to 6.842 billion marka.

Bosnia’s 27 commercial banks serve a market of some 3.8 million people.

(1 euro = 1.95583 Bosnian marka)