Euro transfers – A system that will lower costs will begin within this year
Within this year, the terms of reference for setting up a national payment system in euros will be drafted.
Meanwhile, the establishment of the respective infrastructure will be realized during 2020. The Bank of Albania has included this objective in the mid-term development strategy 2019-2021. Settlement of Euro banknotes to customers of commercial banks in Albanian territory is a project proposed by the Albanian Association of Banks and approved in principle by the Bank of Albania since last year.
Currently, Albania has no payment systems in foreign currencies and foreign currency transfers are carried out through correspondent banks outside Albania. This brings much higher commissions compared to ALL transfers, which are processed through national payment systems. Under the project, the euro payment system will be managed by the central bank. Banks are obliged to hold a mandatory reserve at the Bank of Albania.
In the required reserve account, banks will set a surplus that will be used to make transfers from one bank to another. Thus, if a customer performs a transfer from bank A to bank B, both within Albania, then the transfer of funds will be made between the accounts each bank holds in the central bank. Subsequently, the receiving bank will transfer this money from its mandatory reserve account to the beneficiary’s account. This scheme will avoid the involvement of foreign correspondent banks and will drastically reduce the cost of the transfer.