Representatives: Kemal Durakovic, Dalibor Mrša and Predrag Baroš.
Consumers Association: Ukk Svicarac BiH. Facebook

FX LOANS IN BOSNIA-HERZEGOVINA

For several years now borrowers of loans with foreign currency clause in Bosnia and Herzegovina, as well as other borrowers of these loans in the region or in countries where such loans apply, have been experiencing great difficulties in their repayment.

At the time of entering into such contracts, borrowers could not nearly imagine the damaging consequences which can be caused by entering into a contractual relationship with the bank which has placed such loan product. Even more so, as in almost all of these contractual relationships there are clients who lack knowledge of economics or law. Practice shows that even clients with higher education, including Masters of Economics, were not aware what sort of risk they are engaging in by concluding contracts with a currency clause.

This is primarily because clients, who are being examined during civil proceedings as claimants, state that the bank officials, before making a decision on accepting the terms of the contract, advised them to enter into such exact contracts,  explaining that in the particular case, it is a currency clause which is tied to a stable currency- CHF, and that the value of the currency during the contractual relationship will not change, or will not significantly change.

In addition to all the above, these contracts at the time of conclusion had the lowest interest rates and borrowers are in most cases handled existential issues – purchased apartments.

In Bosnia and Herzegovina is almost 100% of these loan products placed Hypo Alpe Adria Bank. Its headquarters is in Klagenfurt, Austria, and Bosnia and Herzegovina have two banks that founded the Bank of Klagenfurt, in the cities of Banja Luka and Mostar.

However, most of the loans in our country is placed in the local currency is tied to the Euro currency.

What is very important for Bosnia and Herzegovina is its specificity which reflects in the fact that it protects its domestic currency in a manner that is tightly tied to Euro. Thus, Convertible mark is the official currency tightly tied to Euro so that BAM 1 is equal to EUR 0,51129, and one of the duties of Central Bank of B&H is to protect BAM in relation to EUR. Convertible mark in relation to Euro did not suffer a decline in the period of last ten years and more, that is, there was no devaluation as an act of monetary authority, while inflation did not occur or it was insignificant in comparison to how much rate of CHF increased compared to BAM.

Therefore, in B&H fixed exchange rate is applied, so it is completely unclear what is bank protecting itself from, since the domestic currency is entirely stable and so is Euro which is the basis of domestic currency, in period where domestic currency has not decreased more than ten years back, nor is the decrease expected in the future.

The current situation in B&H: We have final verdict. It adopted the part of the claim regarding the illegally calculated interest rate, but the part of the claim regarding the currency clause was rejected.

The reasoning of the rejection of this part of the claim given by the second instance court is the fact that the contract was made so that it is understandable for an average consumer and that the claimant, loan beneficiary, knew what kind of contractual relationship he was entering into. Furthermore, the court concludes that the claimant did not provide evidence to the court which show that he had not understood what kind of contractual relationship it was and had not been informed about the potential risks that contracts with currency clause can create.

On the other hand, the court states that this particular case complied with the Principle of monetary nominalism, because the claimant had allegedly received an exact number of monetary units in CHF, and that he returns that number to the bank, but in local currency in accordance with the exchange rate valid on the day of payment each individual installment

This is a complete failure of the court.

First of all, the loan beneficiary did not receive CHF at all, nor the bank offers any proof that CHF was made available to the loan beneficiary, and the money was then converted into local currency. Hence, CHF is a virtual element, and this had been proven during first instance proceedings, because expert’s opinion clearly indicates that the beneficiary was given a loan in local currency, and there is no evidence of converting from CHF to the national currency.Especially since it has been proven that loan beneficiary returns twice more than the amount he received in local currency, so there is no place for the argument that the Principle of monetary nominalism was complied with.

What sort of evidence can a claimant offer to show that he did not know what kind of contractual relationship he was entering into? It is logical that the bank proves it warned the claimant of the possible risks of the contractual relationship and that the loan beneficiary agreed to those risks?

Now, the bank is glorifying this decision and publicly declares that attorneys deceive people and that there are no chances of winning this dispute.

We have invested a revision to the Supreme Court, awaiting a decision by this court.We continue to struggle in all other cases. The number of lawsuits is increasing daily.