The RMNDH was only a small part of the armed forces of the NDH, largely due to restrictions imposed by Italy under the Treaties of Rome.

All of the significant assets had been lost by December 1944 when the remaining personnel were assigned to duties ashore to circumvent their defection to the Yugoslav Partisans.

On 10 April 1941, four days after the invasion of the Kingdom of Yugoslavia by the Axis powers commenced, an extreme Croat nationalist and fascist Ustaše-led puppet state was created.

The Germans gradually increased their domination over the NDH as time passed, while the Italians were unpopular among the Croat population because they annexed large parts of Croatian territory, including much of the Adriatic coastline.

As the weaker Axis partner, Italy was unable to challenge Germany's grip on the NDH, and the Ustaše-led Croats had to accept whatever conditions were imposed on them.

[2] By long-standing agreement between the Ustaše leadership and Italy that preceded the outbreak of World War II, if the Croats ceded the Croatian coast to them, the Italians would provide for its protection.

[3] The Royal Yugoslav Navy, targeted heavily by air attacks, conducted few combat operations during the invasion,[4][5] and the Italians captured most of its ships in port,[5] losing one destroyer scuttled by its crew.

The flotilla had a flagship, the river tugboat Vrbas, and two patrol groups, each consisting of one monitor, one gunboat, one minelayer and three motor boats.

[14][15] Two more former Yugoslav vessels were captured from the Italians and handed over to the RMNDH by the Germans; the light cruiser Dalmacija (renamed Zniam), and the Malinska-class mining tender Mosor.

[17] The river monitor Bosna struck a mine and sank in the same month,[18] and Sava was scuttled on 8 September 1944 when her crew deserted to the Partisans.

[22] It managed to scrounge up 47 damaged or abandoned fishing vessels, mostly sailing ships, and hired local Russian and Ukrainian sailors to help man them.

They patrolled a coastal sector of the Sea of Azov,[24] and the Legion eventually reached a strength of 1,000 officers and men as the 23rd Minesweeping Flotilla.

[12] On 24 September 1942, the Poglavnik (leader) of the NDH, Ante Pavelić, visited Legion headquarters, where he reached an agreement with the Germans to train and equip a flotilla that would undertake anti-submarine patrols.