SRPSKA BANKING AGENCY RECEIVED NO PROPOSAL TO RAISE CONSUMER LOAN LIMIT

BANJA LUKA, AUGUST 23 /SRNA/ - The Republika Srpska Banking Agency has not received any letter, proposal or initiative concerning an increase in the consumer loan limit from BAM 50,000 to KM 70,000.

The Agency told SRNA that it respects all views and opinions coming from the banking community aimed at improving competitiveness and developing the banking market in Republika Srpska and BiH.

The Agency said that consumer lending has been growing for several years.

"This type of lending can boost consumption in the short term, but on its own it is not a generator of sustainable economic growth. At the same time, rapid growth in consumer lending can create additional long-term risks, both for citizens and for the banking sector," the Republika Srpska Banking Agency said.

It stressed that it is extremely important for banks, when approving loans, to take into account clients' actual creditworthiness and the sustainability of their debt, in accordance with the Republika Srpska Banking Law and the Agency's regulations.

The Banking Association of BiH said the essence of the initiative was not to encourage greater borrowing, but to align the rules with changed economic circumstances and place greater emphasis on a client's actual ability to repay debt regularly.