Codes of Ethics

Members of the Banks Association of Bosnia and Herzegovina (hereinafter: the Association) have adopted the Codes of Ethics in order to:

• Establish standards of good conduct and open communication towards customers and banks;
• Increase banking reputation in the society;
• Enhance the idea of responsibility, transparency and professionalism in its business operation
• Maintain relationship with customers
• Maintain banking information and marketing rules
• Maintain relations between banks
• Solve disputes and ensure measures for breaching the Code

I BASIC PRINCIPLES

• The Code of Ethics (hereinafter: the Code) is a voluntary framework under which banks arrange their business operations with customers (legal entities and private individuals) and other banks. In addition to obligations imposed by laws and regulations, as well as supervisory guidelines, banks have traditionally accepted business conduct rules as generally accepted standards with the aim of their implementation.
• By accepting the Code, banks have set a standard of sound banking practice which they comply with as a minimum in in their business operations.
• The Code contains basic elements that every bank is to include in its internal rules.
• Business culture resting on this Code should be accepted by all employees and should be incorporated in their work method. Encouraging ethical behavior in a bank can be achieved by defining principles and rules of business conduct, by a positive example from a manager, by identifying and solving potential ethical issues in an early stage and by sanctioning unethical behavior.
• Ethical behavior in business operations of banks is based on adherence to laws, other applicable regulations and agreements between partners. Business operations in general have to be aligned with effective laws in Bosnia and Herzegovina and cannot encourage, permit or conceal breaches of law.
• Whenever possible, banks will try to solve mutual disputes arising from business relations on their own and in good faith. If this is not possible, the disputes shall be solved through arbitrage or court.

II SPECIAL RULES

• Customer Relations

1. A bank will ensure its employees possess relevant knowledge of products and services from its offer and will encourage them to propose products or services best fitting the specific needs of individual customers.
2. Banks need to apply a unique terminology with generally accepted meaning in order to enable customers to compare similar products or services offered by different banks.
3. A bank will provide its customers with accurate and useful information related to features of products or services from its offer, as well as with conditions, tariffs and decisions it applies. Within the scope of the requested service, a bank will ask for information on particular customer situation, his/her needs and limitations. Banks may not enter unclear provisions in the business policy documents, forms and agreements, i.e. provisions which impose unspecific obligations for service users and bring the other party into an uncertain position with respect to carrying out mutual rights and obligations.
4. In carrying out its obligations towards customers, banks will act efficiently and diligently. Also, they will train their employees to strictly comply with the banking secrecy rules and generally, to apply full discretion in their relations with customers.
5. A bank will try to avoid conflicts of interests, and where such conflicts could not be avoided, ensure equal treatment of customers.
6. A bank will refrain from giving advices to customers that could possibly make them misuse such information in certain offences or enter into transactions with funds assumed to originate from unlawful activities.
7. In line with its responsibilities and valid regulations which relate to discouraging and preventing legalisation of revenues from criminal activities (money laundering), banks must inspect each transaction carefully and try to avoid harming the customer's reputation.
8. All data on customers and business partners are considered to be a business secret, even when the customer status is terminated. No personal data on customers' accounts can be revealed, except in cases clearly defined by the law, direct request by the customer or with his/her explicit consent.
9. To ensure customer protection in this context, unambiguous customer identification is necessary in relation to individual transactions (to include disclosure of personal data and data on accounts).
10. Customer and account data may be used by banks only for purpose of efficient account management and service rendering. A customer has a right to access his/her data to verify and possibly make some corrections.
11. Bank information systems have to be specially protected from unauthorised access to data bases, all for purpose of protecting interests of banks and customers, as well as protecting own data.
12. If a customer identifies an error in bank operations and informs the bank accordingly, such bank shall invest reasonable time to check such customer statement and make prompt corrections.
13. In case of customer's financial difficulties, a bank will take care of its interests, but will also act as a partner and be open to conversation. Accordingly, customers are expected to promptly notify the bank on the existing and potential future difficulties.

• Bank Information and Promotional Marketing

1. A good business relationship rests on openness and mutual confidence, which means that information exchanged between the bank and the customer should be accurate and timely.
2. A bank will clearly identify itself on the market. This implies customer communication in person and via public media (including Internet). Service offer should be precise and truthful with respect to its basic characteristics.
3. Information on bank fees, interest rates and other information must be available in all branches. A bank undertakes to provide basic data and any changes thereof to the Association, in order to make them publicly available in a uniform manner.
4. Bank communication, advertising and other marketing activities must be clear, truthful and unambiguous. They shall not mislead the public, violate good business practices or adversely affect others. Open market game allows use of all marketing means and forms of communication, as long as the provided information emphasises the bank’s characteristics, and advantages of its services, products or technology, all for the purposes of fair market expansion.
5. In their public advertising, banks shall act in a fair manner, without an intention to impair the position of other banks by promoting themselves and their work, which particularly applies to the use of attributes such as ‘the safest’, ‘the best’ etc., which may imply that other banks are less safe - thus misinforming the public. In a bank’s market promotion (this applies to the promotion of an individual product or a product group), these expressions may be used only if there are objective criteria to be applied in determining whether a specific bank is really the best bank according to some of the criteria applied by distinguished domestic or international organisation or publishing company or independent public opinion surveys that proclaimed the bank to be the best, the largest etc., or that proclaimed its CEO as the most successful bank executive. In that case, the organisation that awarded the prize/reward should be mentioned, as well as the time period covered by the said price/reward. 

• Interbank Relations

1. In interbank relations and in dealings with other entities, banks shall abide by all existing legislation and rules, with the special emphasis on protection of interests of the banking profession and on correct relations and fair market game, while at the same time considering preservation of good reputation of other banks.
2. Forms of unfair competition are not allowed. These include, but are not limited to: unreasonably low prices of banking services, unethical acquisition of information about a competitive bank and dissemination of any information about the competitor, especially false information.
3. Forms of unfair cooperation with competitors are not allowed. These include, but are not limited to: any special arrangements regarding prices of banking products, market division or forming any similar closed associations aimed at obtaining privileged position on the marketplace.  

• Dispute Resolution and Sanctioning the Code Violations

1. Should any problems or disagreements arise between the banks that accepted the Code, banks undertake to try and find a solution through a mutual dialogue, based on principles of good banking practice. If a direct dialogue between two (or more) parties fails to produce a solution, the banks shall try to resolve the dispute through mediation by the Association.
2. Violations of this Code and disputes between banks - Code signatories arising from their mutual relations shall be resolved in accordance with rules of the Association’s Court of Honour.
3. Each party in a proceeding before the Court of Honour shall fully accept decisions of this Court.
4. When there is a grounded suspicion that a bank has violated the Code or the law, any interested party, including the media and the public, shall be entitled to request explanation from the bank and to receive its response within 10 days.
5. If the bank fails to reply or provide appropriate evidence demonstrating that it operates in accordance with the Code and relevant legislation, the interested party shall be entitled to report the bank to the Association’s Court of Honour.
6. The Court of Honour shall consider the grounds for the report within the timeframe laid down in its procedures, establish the facts impartially, and announce its decision.
7. Once it has implemented the procedure to determine legal liability, the Court of Honour shall impose the following measures:
   • A warning published in the Association’s newsletter;
   • A public warning published in the media;
   • Exclusion of the bank from the membership in the Association;
   • Other measures laid down in the Association’s documents.
8. Once it has implemented the procedure to determine legal liability, the Court of Honour shall exclude from membership a bank which:
   • repeats the Code violation for which it was already publicly warned;
   • substantially harms the reputation of the banking system, its institutions or individual members of the Association.

III TRANSITIONAL AND FINAL PROVISIONS

1. This Code shall enter into force on the date of adoption and shall apply upon expiry of 90 days following the adoption date. The Association members shall bring their operations in compliance with the provisions of the Code by 31.12.2006.
2. Any Association member can initiate amendments to the Code. Amendments shall be adopted applying the same procedure which was applied when the Code was initially adopted.
3. Wording of the Code is publicly available at the Association’s website: www.ubbih.ba

Sarajevo, 13.12.2005

Number: I-265/05

PRESIDENT
MIRSAD LETIĆ