Methods of Payment
The following financial instruments are used in BiH to make payments abroad: documentary collections, checks, and letters of credit. The safest method of receiving payment for a U.S. export sale is cash-in-advance and/or irrevocable letter of credit. However, most importers prefer to avoid this costly instrument. Many claim to do business on open account terms with their European suppliers. Nevertheless, a confirmed letter of credit should be a minimum term. Companies that acquire capital goods expect the vendor to provide financing, preferably in the form of a loan.
For more information about the methods of payment or other trade finance options, please read the Trade Finance Guide.
Banking System
The country’s banking sector is dominated by foreign private banks, which own 75 percent of the total capital. Currently, 21 commercial banks operate in BiH, including 13 in the Federation and 8 in the RS. The sector is generally sound, well capitalized, liquid, and profitable, with non-performing loans at their lowest level in a decade. However, banks do not contribute sufficiently to meet the financing needs of the private sector due to higher risk aversion, conservative policies from their parent companies, and the fact that a large share of lending currently goes to consumer credit and government-owned enterprises. Dominant foreign ownership of banks also means that the country is more susceptible to negative spillovers.
The BiH Central Bank (CBBiH) is the country’s monetary authority. It operates under a currency board arrangement and has for years served as an anchor for macro-financial stability, predictability, and low inflation. The local currency (BAM) is tied to the euro at a fixed exchange rate of 1 BAM = 0.51129 euro. In addition, the CBBiH supports and maintains appropriate payment and settlement systems and coordinates the activities related to supervision of commercial banks. The Central Bank also coordinates the activities of the entity level banking regulatory agencies, which are in charge of bank licensing and supervision.
Foreign Exchange Controls
In accordance with the BiH Law on the Central Bank, neither the Central Bank nor any other relevant institution may impose payment restrictions on international transactions, except when the Central Bank deems it indispensable to meet BiH’s obligations under international treaties or law.
Commercial banks and financial institutions in BiH may publicly trade in domestic and foreign currency without restrictions according to the law. The foreign exchange and payment system has no restrictions (no administrative management nor limits) on payments and transfers related to international current and capital transactions. In commercial banks, there are no restrictions for individuals or businesses (domestic and foreign) on opening accounts in domestic or any foreign currency, on exchanging KM for any foreign currency, or in payments to foreign partners.
In both the Federation and the RS, the Law on Foreign Exchange Operations regulates foreign exchange operations. These laws extend identical treatment to domestic and foreign physical and legal entities.
U.S. Banks & Local Correspondent Banks
The following are the largest banks in BiH that maintain U.S. correspondent banking arrangements:
Raiffeisen Bank dd Bosna i Hercegovina (Austrian)
Phone: (+387) 33 755 010
Zmaja od Bosne bb
71000 Sarajevo
UniCredit Bank dd (Italian)
Phone: (+387) 36 312 112
Kardinala Stepinca bb
88000 Mostar
Sparkasse Bank dd (Austrian)
Phone: +387 33 280 300
Zmaja od Bosne 7,
71000 Sarajevo
Addiko Bank (Austrian/American)
Phone: (+387) 33 755 755
Trg Solidarnosti 12
71 000 Sarajevo
Intesa Sanpaolo Banka Bosna i Hercegovina (Italian)
Phone: (+387) 33 497 500
Obala Kulina Bana 9a
71000 Sarajevo
ASA Banka (Bosnian)
Phone: (+387) 33 586 870
Trg Medjunarodnog Prijateljstva 25
NLB Razvojna Banka (Slovenian)
Phone: (+387) 51 221 620
Milana Tepica 4, 78000 Banja Luka
For additional information, visit the U.S. Department of State Investment Climate Statements.