Although Serbs were Gutić's main targets, the Ustaše in Banja Luka also persecuted the city's Bosnian Muslims. This created a power struggle between Gutić's dominant Ustaše faction and the city's Muslim Ustaše. In October 1941, Gutić's men murdered a local Muslim hodža, causing 500 people to take to the streets in protest. On 8 November, Gutić banned the wearing of veils by Muslim women, prompting local Muslim leaders to issue the Banja Luka Muslim Resolution of 22 November 1941. In January and February 1942, Gutić brought a battalion of Ustaše from Herzegovina to Banja Luka and had them carry out atrocities in surrounding Serb villages. These massacres were so brutal that they reportedly disgusted even local Ustaše officials. At one point, local prison guards and members of the Croatian Home Guard intervened to prevent Gutić's men from massacring a group of political prisoners in Banja Luka's "Black House" prison. In March 1942, Banja Luka mayor Hakija Bešlagić resigned in protest against Gutić's actions.
