New BoA payment system expected to reduce transfer costs

The Bank of Albania has given the green light to the establishment of a national payment system in euro.

The project submitted by the Albanian Association of Banks has been approved and is expected to enable significant reductions of bank commissions for domestic transfers made in the European currency.

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 systems managed by the Bank of Albania.

According to the approved 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, at the rate of 10% of the deposits they own in each currency.

The project foresees that banks use the euro account at the Bank of Albania as a bridge for conducting internal transfers in euros.

In the required reserve account, banks will place a surplus, which will be used to make transfers from one bank to another.

Thus, if a customer makes 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.

SCAN

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