Frequently asked questions and answers

Can the Ombudsman release me from the contractual obligations?
In an extra-judicial procedure being conducted as a result of the complaint or request of the client/guarantor, the Ombudsman cannot release the client/guarantor from the legally based obligations of the contract with the creditor, service provider.

How can the Ombudsman protect me in relation to the filed request/complaint?
Based on findings and information collected in the proceedure resulting from the filed complaint or request and the statement of the financial institution, the Ombudsman can:
Suggest a peaceful resolution of the dispute (mediation) between the client and the financial institution;
Recommend that the financial institution take on actions or eliminate the shortcomings that led to the dispute in the interest of resolve the dispute;
Advise the client regarding the end of the dispute.

Can I contact the Ombudsman if the subject of my complaint/request is already in procedure before the court or some other competent authority?
The procedure before a court or some other competent authority does not prevent you from or limit you in exercising your rights by contacting the Ombudsman with a complaint or request.

Amount of costs and fees that banks collect for their services to natural persons
Bearing in mind that the Office of the Ombudsman for the Banking System has received a large number of inquiries from citizens regarding the costs and fees that Banks collect, we hereby inform the users of services – citizens that Banks collect a fee for the service performed in accordance with their Fee Rates, which is an internal act of each Bank.
Before choosing to use any of the Bank's services, we advise users to inform themselves in detail about all types of fees and costs related to that service, and to do so in a number of banks, and then select the service and product at the Bank whose services meet their needs.
Detailed information on the costs and fees for each product and service offered by Banks can be found on the websites of each Bank, and it is necessary to directly contact the Bank or another financial institution for exact information.

Right to close an account – inactive accounts
In accordance with the Law on Protection of Users of Financial Services, the user is entitled to close the account free of charge, wherein it is necessary to beforehand settle liabilities that resulted from using that account and to submit a request to the Bank in written form.
According to the Banking Law, an inactive account is an account which saw no activity from the account owner, including the deposit and withdrawal of funds from the account by the owner, for a period of one year from the date of the last activity of the account owner.
Each Bank is required to prescribe procedures for dealing with inactive accounts and to inform the account owner of these procedures.

Payment of interest and fees in early loan repayment
The user is entitled to repay the loan at any time, fully or partially execute their obligations under the loan agreement and, in that case, they are entitled to the total loan costs being reduced by the amount of interest and costs for the remaining period of that agreement (early repayment).
The user is required to notify the Bank in advance and within the agreed time frame of the intention to repay the loan early, and the Bank has the right to an objectively justified and contracted compensation of costs relating to early loan repayment, up to 1% of the amount of the loan that was repaid early if the period between early loan repayment and the time frame for meeting the contractual obligation is longer than one year, and 0.5% if this period is shorter than one year.
If early repayment is made during the period for which a variable nominal interest rate has been contracted, if the repayment is made on the basis of an insurance contract or in the case of a permitted overdraft on an account, the Bank may not claim an early repayment fee. The Bank may collect accrued interest and interest due only up to the moment of early loan repayment.

Default interest rate amount in case of late payment of liabilities
A compulsory element of the loan agreement is also the default interest rate that is applied in case of late payment of liabilities.
Banks contractually determine the default interest rate amount, in the manner prescribed by the Law on Obligations, the default interest rate, which is determined by a special law, or the contracted interest if it is higher than the default interest rate that is applicable even after the debtor's lateness.
Therefore, in accordance with regulations, in terms of the default interest amount, the Bank can only calculate and collect the legal default interest on all receivables due (12%) or apply the regular contracted interest rate as the default interest rate (if it is higher than the statutory default interest).

Transfer of bank's receivables from the loan agreement to a company or agency
In accordance with the Law on Protection of Users of Financial Services, which has been in effect since 01.11.2014, the Bank can transfer its claim from the agreement concluded with a natural person as a user of financial services only to another Bank or financial institution that has an operating licence issued by the Banking Agency.
The other financial institution cannot put the user into a less favourable position relative to the position they would have if the claim had not been transferred, nor can it require additional costs from them.

Records of data and debts in the Central Registry of Credits (CRC)
The Central Registry of Credits (CRC), which represents the records of all loans of legal entities and natural persons indebted with financial institutions under the supervision of the Banking Agency, is regulated by the Decision on the Central Registry of Credits of Legal Entities and Natural Persons in Bosnia and Herzegovina of the Central Bank of BiH („Official Gazette of BIH“, No. 92/11, 103/11 and 22/12).
Depending on the regularity of loan repayment from the date of contractual indebtedness between the financial institutions and the client, according to the regulations of the Banking Agency, a classification is made according to the letters A, B, C, D and E.
Financial institutions are required to submit data to the Central Registry of Credits on a daily basis and they are responsible for the accuracy of the submitted data and for keeping it up-to-date.
Records of all loans are available through two reports:
- Report on total outstanding debts of a natural person (BF1)
- Report on total expired/repaid debts of a natural person for the last five years from the moment of expiry/repayment (BF2)

What is the Information sheet?
In the pre-contracting phase for product or service, the financial institution shall submit to the user a personalized, standard Information sheet. It is important to know that the Information sheet contains all important elements of the product or service (type, amount, duration, interest rate type, fees, etc.) so as to enable a user to compare a same type of product or service with different financial institutions. In case of lack of clarity in information sheet contents, i.e. conditions for products or services offered, you always have a right to request further explanation from the employee of a financial institution. It is very important as a user to seize all the opportunities to get required information in order to make a responsible financial decision.

Do I have a right on draft contract?
Prior to the conclusion of the contract offered, a user has a right to request from a financial institution and obtain a free copy of a draft contract, in order to review the content, in the reasonable time, outside of the premises of a financial institution. This way a user may review the content of the contract in details, request an additional explanation, communicate any unclear issues about contracted provisions or request to change provisions that are not acceptable. It is noteworthy that this negotiation phase, provides adequate protection of users whereby placed on an equal footing as financial institutions.

Fixed and variable interest rate
One of the important elements of the loan arrangement is the interest rate. The characteristic of the fixed interest rate is that it remains unchanged in its nominal amount during the contracted period, unlike a variable interest rate which is changed in a nominal amount depending on the contracted variable elements that are officially published (e.g. EURIBOR, LIBOR, Consumer Price Index). The financial institution shall always lay down a clear condition for interest rate variability which shall have a two-way character.

Notification on variable interest rate
Where a variable nominal interest rate is contracted, a financial institution shall inform the user in written or in electronic form, on any changes of an interest rate before the application date of a changed rate, i.e. periodically in accordance with the contract, wherein the date from which changed rate is applicable shall be indicated. In this case, along to notification, a financial institution must also submit to a user a free installments schedule and make it available at any time for the contract duration.

What is a currency risk?
Financial institutions may provide a loans indexed in a foreign currency or so-called loans with a currency clause, i.e. to define exchange rate type which is applicable in loan approval and loan repayment, as well as accounting dates. For loans granted with a foreign currency clause, the amount of the loan granted is linked to the value of the foreign exchange rate, but the payment is made in the domestic currency (convertible mark). By changing the exchange rate (currency risk) in which a loan is contracted, an increase in the installment or annuity may occur, which must be taken into account by the users before conclusion of the contract.

Amendments to the mandatory elements of the loan contract
Where a financial institution has intention to change some of the key elements of the contract, it shall obtain a written consent from all actors involved in loan arrangement (user, co-debtor, guarantors and others) prior to the application of any change, except in case of variable interest rate changes. Provided that a user does not agree with a changes of key contract elements, financial institution cannot unilaterally change the conditions of the contract, either unilaterally terminate the contract, i.e. cancel it, except in specific cases which are prescribed by the law.

Since when the Law on Protection of Users of Financial Services is applicable?
The Law on Protection of Users of Financial Services in the Federation of BiH was published in the Official Gazette of the Federation of BiH on 23 April 2014 and entered into force on the eighth day following its publication. The financial institutions operating at the territory of the Federation of BiH were obliged to apply the provisions of the Law six months following its entrance into force. In that context all arrangements contracted with the users after November 01st, 2014 are subject to protection and provision of the Law on Protection of Users of Financial Services.

When the Law on Protection of Users of Financial Services is not applicable?
The provisions of the Law on Protection of Users of Financial Services in the Federation of BiH do not apply to loans amounting to less than BAM 400 and higher than BAM 150 000, what users should bear in mind in contracting phase.

Whether the Law on Protection of Users of Financial Services is applicable to legal entities?
Legal entities are not subject of protection within provisions of the Law on Protection of Users of Financial Services. The Law applies exclusively to natural entities, and only to those who use, want to use or had used a financial services and products for the purposes not intended for their business or other commercial activity.

In case of final court decision, can I address to the Ombudsman for the banking system of the Federation of BiH for the same issues?
In case the competent court has made a final decision (res judicata) regarding a particular right or obligation of the user of a financial service or product against a financial institution, the Ombudsman for the banking system of the Federation of BiH cannot act upon yours complain or conduct a mediation procedure on the same legal matter.