A political and territorial organization of the Republic of Srpska, which comprises municipalities and cities, recognizes the City of Banja Luka (earlier a municipality) as the biggest political and territorial unit occupying 1 239 km2. As the university, economic, finance, political and administrative center of the Republic of Srpska and one of the two entities in Bosnia and Herzegovina, Banja Luka is the second biggest city in Bosnia and Herzegovina with the population of 250 000.
Situated in a basin 164 m above sea level, where the Dinaric Alps from the south descend into the Pannonian Basin in the north, Banja Luka has temperate continental climate with the prevailing influences from the Pannonian plain. It belongs to the Central European Time zone (GMT +1) and. The average annual temperature reaches 10,7°C, the average January 0,8ºC, whereas the average temperature in July reaches 21,3ºC.
Due to many of its green surfaces – parks and tree-lined roads, Banja Luka is also known as the city of greenery. It is also called a city of young people, sport and culture. Banja Luka used to be a strong economic center with a developed industry structure – the machinery-, electrical-, textile-, food- and cellulose industry in particular. The past war calamities that struck the city in the 1992-1995 period and the post-war society transition resulted in the collapse of a majority of the industrial capacities and markets. The post-war Banja Luka started opening up more extensively to market economy countries, directing its development prospects towards the progress of trade, tourism, agriculture and food industry.