Association of Banks drafts project aiming to reduce cost of bank transfers in euro currency

One of the problems associated with the high level of the euroisation of the economy is the very high cost of bank transfers in euros. 

Transferring currency from one bank to another within Albania is a transaction associated with a high cost and longer execution time compared with transfers in ALL.

This is primarily because Albania does not have an internal payment system in the European currency and transfers in euro are made through correspondent banks abroad.

Scan Magazine reports that, to solve this problem, the Albanian Association of Banks has proposed to the Central Bank the establishment of an internal payment system in euro, which will be managed by the Bank of Albania itself.

As it is known, banks are required to hold a reserve at the Bank of Albania, a 10% of the deposits that they hold in each currency. 

The project envisages that banks would use the euro account with at the central bank as a “bridge” to perform domestic transfers in euros.

Banks would place a surplus in the reserve account, which will be used to carry out transfers from one bank to another. 

So, if a customer performs a transfer from the bank A to the bank B, both inside Albania, the transfer of funds will be made between accounts that each bank holds at the Central Bank. 

Then, the receiving bank will transfer the money from its account of the mandatory reserve to the account of the beneficiary.

This scheme would avoid the inclusion of foreign correspondent banks and would drastically reduce the cost of the transfer. 

According to the proposal, the Bank of Albania will manage only the payment system, but not the physical money in foreign currency.

Physically, the funds in euros will move as it occurs currently, with the hope that cheaper transfers will lead to a significant reduction in the volume of cash that has moved abroad.

SCAN

*Material i përgatitur nga portali SCAN. Ripublikimi mund të bëhet vetëm kundrejt citimit të autorësisë dhe burimit origjinal.