New Law on default interest

A new Law on default interest has been passed in Republic of Srpska, according to which the default interest rate amounts to 0.03% and is multiplied by number of days in default. The adopted default interest is lower than the previous one, and amounts to approximately 11% on annual basis, which is consistent with the amount of default interest in the countries in the region. The adopted legal solution will eliminate dilemmas that existed in court proceedings regarding the calculation of default interest, because financial experts interpreted the term “consumer price growth” in various ways, which was an integral part of the calculation of the statutory default interest rate through the previous legal solution, hence the results of the expert evaluation were often different. The adopted, simplified legal solution, where the number of days in default is multiplied by a rate of 0.03%, should always lead to the same result.

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