BANKING SECTOR OF THE REPUBLIC OF SERBIAN IN TERMS OF TRANSITION

Abstract

Privatisation of the banking sector is an inseparable
part of development strategies used by the
countries in transition. The process of transition
and building a financial and market-oriented system
is a complex and long-term task which, in addition
to a variety of legal arrangements, involves
also several institutional options, such as the
Central Bank of Bosnia and Herzegovina, Banking
Agency of the Republic of Srpska and Banja
Luka Stock Exchange of Securities. The transition
process of the banking sector in the Republic of
Srpska was not implemented by rehabilitation of
existing domestic banks, but by opening the banking
system for the entry of foreign, more efficient
banks. The level of trust in the banking sector grew
in parallel with the process of bank privatisation
and the arrival of foreign banks. Throughout the
previous period, all the banks in the Republic
of Srpska recorded a significant increase in the
amount of deposits and loans placed, which implies
the growth of investment and economic activities,
therefore indicating the increase of the
Republic of Srpska’s GDP in general. These are
positive trends that demonstrate a decrease in the
current lagging behind the European Union.