A new Law on Default Interest Rate has been published in the "Official Gazette of FBiH" as of 6 March 2020. The most important provision introduced by the Law is a decrease of the default interest rate while the amount of calculated default interest cannot exceed the amount of principal debt. Existing interest at the rate of 12 percent per annum shall be paid on due pecuniary obligations until the entry into force of the new Law.
Official Gazette of FBiH, 18/20
dated 06.03.2020
LAW ON
DEFAULT INTEREST RATE
Article 1
Subject of the Law
This Law shall determine the height of the interest rate and the method of calculation of the default interest for the debtor-creditor relationships where the debtor has been late with fulfilment of his financial obligation.
Article 2
Application of the Law
The provisions of the Law shall apply in all cases in which the default interest has not been prescribed by a special law.
Article 3
Height of default interest rate
(1) The debtor defaulting on his servicing of debt liabilities, in addition to the principal amount shall owe the default interests on the amount of the debt of 10% per annum up to the time of payment.
(2) For calculation of the default interest for the periods shorter than one year the compound method will be applied.
(3) The default interest calculation will be done be according to the legally binding court decisions by a debtor’s commercial bank where he/she has the transaction accounts including a charge of commission for the collected amount of the default interest.
Article 4
Amount of default interest
The amount of the calculated default interest cannot be higher than the amount of principal debt.
Article 5
Application of Provisions of the Law
(1) The default interest shall be calculated according to the method prescribed by the Law on Default Interest Rate (Official Gazette of the Federation of BiH, 27/98, 51/01, 101/16 and 89/18-O.U.S) on all debts originated before entry into force of this Law.
(2) The default interest shall be calculated according to this Law on debts becoming due for payment after its entry into force.
(3) The default interest on unsettled debts according to the Law on Amount of Default Interest for Unsettled Debts (Official Gazette of the Federation of BiH, 56/04, 68/04 – corrected, 29/05 and 48/11 and BiH Official Gazette, 73/19-O.U.S) before entry into force of this Law will be calculated on unsettled debts according to the Law on Amount of Default Interest for Unsettled Debts (Official Gazette of the Federation of BiH, 56/04, 68/04 – corrected, 29/05 and 48/11 and BiH Official Gazette, 73/19-O.U.S) and after entry into force of this Law the default interest will be calculated according to it.
Article 6
Cessation of Application
The Law on Default Interest Rate (Official Gazette of the Federation of BiH, 27/98, 51/01, 101/16 and 89/18-O.U.S) and the Law on Amount of Default Interest for Unsettled Debts (Official Gazette of the Federation of BiH, 56/04, 68/04 – corrected, 29/05 and 48/11 and BiH Official Gazette, 73/19-O.U.S) shall cease to have effect after entry into force of this Law.
Article 7
Entry into force
This Law shall enter into force on the eight day after being published in the ‘Official Gazette of the Federation of BiH’.
