Based on Article 53 of the Republika Srpska Law on Micro Credit Organisations (“Official Gazette of
Republika Srpska” number 64/06); Article 10, Paragraph 2, Item b of the Law on Banking Agency of
Republika Srpska (“Official Gazette of Republika Srpska” number: 10/98, 16/00, 18/01, 17/02, 18/03,
39/03 and 123/06) and Article 15, Paragraph 1, Item 11 of the Statutes of the Banking Agency of
Republika Srpska (“Official Gazette of Republika Srpska” number: 67/04), Managing Board of the
Banking Agency of Republika Srpska, on a session held on Dec 29th 2006, made a:
DECISION
ON UNIFIED WAY OF CALCULATING AND
EXPRESSING EFFECTIVE INTEREST RATE TO LOANS
Article 1
This Decision describes unified way of calculating and expressing active effective interest rate to
disbursed loans.
Article 2
In the sense of this Decision, by an effective interest rate considered is the end of period interest rate
calculated on a yearly level and by applying complicated interest calculation in a way that discounted
cash inflow is being equalised with discounted cash outflow of approved loans.
In calculation of the effective interest rate to approved loans with placed deposits included are, also,
financial means of this deposit (cash flow of the deposit).
Article 3
During discounting, i.e. reconciling to present value of all future cash inflows and outflows based on a
loan contract, applied is the calendar number of days in a month and 365/366 days in a year.
Article 4
Effective interest rate is expressed in percentages with two decimals, with rounding of a second
decimal, and is effective from the day of calculation.
Effective interest rate is expressed with term “effective interest rate” and abbreviation “EIR”.
Article 5
Loan information that micro credit organisation (hereinafter: MCO) offers are following:
a) Information included in calculation of effective interest rate:
- Amount of nominal interest rate to loans
- Amount of fees and commissions calculated to the client by MCO during process of loan
approval
- Amount of fees and commissions known on the day of calculation, which are calculated to
the client by the MCO during realisation of loan contract
b) Information not included in calculation of effective interest rate:
- Criteria for revalorisation and indexing loans, information on foreign currency by which the
loan is indexed or other criteria for revalorisation and indexing loans,
- Costs unknown on the day of calculation and which can occur during realisation of loan
contract.
Article 6
MCO is obliged to calculate effective interest rate and make it available for public and clients.
Article 7
Effective interest rate is clearly and visibly displayed by MCOs in their premises, advertisements and
in the means of public informing, and in the same way displayed is the foreign currency by which
loans are indexed or other criteria for revalorisation and indexing loans.
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Article 8
Effective interest rate cannot be less visible than other information and in displaying MCOs should
use term “effective interest rate” and abbreviation “EIR”.
Article 9
MCO is obliged to introduce clients to effective interest rate prior to receiving of loan application, as
well as before signing of loan contract.
Article 10
Loan contract must contain appropriate provision where it will state clearly that client is familiar with
loan terms and effective interest rate, and that he/she was given a loan repayment plan.
Article 11
During establishing of loan relationship with client, MCO is obliged to provide client with repayment
plan with clearly expressed effective interest rate. Also, MCO is obliged to file such repayment plan
in the loan file.
Article 12
If effective interest rate is changed due to change of elements based on which it is calculated, MCO
will, prior to starting of applying changed effective interest rate, notify the client in written, and
grounds for change of terms must be specified in the loan contract.
Article 13
Methodology for calculation of effective interest rate to loans and the minimum content of repayment
plan are described in Instruction for applying Decision on unified way of calculating and expressing
effective interest rate to loans.
Article 14
This Decision is also applied to organisational units of foreign MCOs operating in the territory of
Republika Srpska and to organisational units of MCOs with their seat in Federation of Bosnia and
Herzegovina or Brcko District that are operating in Republika Srpska.
Article 15
For loan contracts concluded prior to application of this Decision, MCO is obliged to, upon client’s
request, make a repayment plan for the remaining loan period.
Article 16
MCOs are obliged to deliver Banking Agency of Republika Srpska monthly reports on weighted
nominal and effective interest rates on prescribed forms and within 15 days after a month is over.
Article 17
This Decision is coming into force on the eight day from publishing in the “Official Gazette of
Republika Srpska” and is being applied from July 1st 2007.
MB number: 303/06
Dec 29th 2006
Banja Luka
CHAIRMAN OF THE
MANAGING BOARD
Professor Novo Plakalović, PhD
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