Central Bank of Albania

Central Bank of Albania

About Central Bank of Albania

The Bank of Albania is the central bank of the Republic of Albania. The Constitution of Albania (Article 161) defines the status of the Bank of Albania and the Law No. 8269, dated 27.12.1997 “On the Bank of Albania” lays down its objectives, duties, relationships with the banking system and state institutions in Albania, organization and management, financial statements, capital, and profit allocation.

The primary objective of the Bank of Albania is to achieve and maintain price stability. The Bank of Albania is autonomous and independent from any other authority in the pursuit of its objectives and the performance of its duties.

The Bank of Albania is accountable to the Assembly of the Republic of Albania and its paid-up capital is owned exclusively by the State of Albania. The Bank of Albania is governed by the Supervisory Council, which is chaired by the Governor. The Governor also serves as the General Executive Director of the Bank.


The vision of the Bank of Albania is to promote good governance through fostering independence, increasing accountability and enhancing transparency, with a view to boosting public confidence in the Bank of Albania.


The principal objective of the Bank of Albania is to achieve and maintain price stability, which is the best contribution of monetary policy for sustainable and long-term economic growth, employment and welfare. In light of this objective, the Bank of Albania preserves the value of savings and contributes to the stability and development of the financial system. The objective of price stability is achieved through the independent formulation and implementation of the monetary policy.


The activity of the Bank of Albania to enhance public confidence in the institution shall be guided by these principles:

>> integrity and ethics
>> competence and professionalism
>> effectiveness and efficiency
>> teamwork and innovation

Functions of the Bank of Albania:

As the monetary and supervisory authority in Albania, the Bank of Albania, in order to achieve its principle objective, may also conduct a series of other functions:
Currency issue. The Bank of Albania has the exclusive right to issue national banknotes and coins with legal tender and to supply the economy with currency in the territory of the Republic of Albania.

Monetary policy of Bank of Albania:

The Bank of Albania formulates, adopts, and implements the monetary policy of the country. To achieve monetary policy objectives it uses appropriate monetary instruments.

Financial stability. The Bank of Albania has the responsibility to ensure that the banking system in particular and the financial system, in general, are stable and efficient.

Foreign exchange. The Bank of Albania is responsible for formulating, adopting, and implementing the foreign exchange regime, as well as the exchange rate policy in the Republic of Albania.

Supervision :

The Bank of Albania has the exclusive right to grant or revoke the license and regulates and supervises the activity for commercial banks and non-bank financial institutions that operate in Albania.

Foreign reserves. The Bank of Albania holds and manages the foreign reserves of the Republic of Albania.
Agent for the Government. The Bank of Albania acts as banker, advisor, and fiscal agent for the Government of the Republic of Albania.

Payment systems. The Bank of Albania promotes and ensures the smooth functioning of the national payment systems.

A brief history of the Bank of Albania:

The history of the Bank of Albania and the credit and monetary system in Albania is a history of attempts preceding the foundation of the National Bank of Albania (1925-1944), transformation to the State Bank of Albania (1944-1992), and establishment in 1992 of the Bank of Albania, which enjoys the attributes of a modern central bank.

Albania had its first central bank institution in 1913. It was founded under the agreement concluded between Ismail Qemali’s Government and Mr. Karol Pitner and Mr. Oskar Pollak, representatives of the Wienner Bank Verein, acting on behalf of the Austrian-Hungarian banking group, and Mr. Pietro Fenolio and Mr. Guido Ansbaher, representatives of the Banca Commerciale Italiana, acting on behalf of the Italian banking group. The banking institution was short-lived due to the political climate of the era and outbreak of the First World War.
It resumed its activity in 1925 under the name National Bank of Albania, with the administrative headquarters located in Durrës and the Administrative Committee sitting in Rome. The Bank was re-established thanks to the agreement concluded between Mr. Mufid Libohova, acting on behalf of the Albanian Government, and Mr. Mario Alberti, on behalf of an Italian financial group.

The first Albanian currency was put in circulation in February 1926. The gold franc was designated as the official monetary unit. The Albanian currency had its subdivisions (Lek, cents, 1 gold franc equated to 5 Lek and 100 cents) and its manifolds (5, 20 and 100 gold francs).

The National Bank of Albania, throughout this period, implemented the gold standard implying that banknotes were converted into gold and hard currencies, such as dollar, lira, and pound. In addition to the issue function, the Bank carried out crediting functions as well. Over a 10-year period, it acted under monopoly conditions, but in 1938 it found itself in competition with the Bank of Naples and the Italian National Bank of Labour.

In 1945, the Leadership of the Antifascist National-Liberation Council approved the Law on the cancellation of the National Bank of Albania’s concession and of its shares, which paved the way for the nationalisation of the Bank. The organic Law of the State Bank of Albania was approved on 3 January 1945, giving the Bank the attributes of both a central and a commercial bank. During 1945-1990, the State Bank of Albania supported the development programme of the socialist economy characterised by extreme centralisation of this system.
At the end of 1990, the transition of the political system in Albania reflected vital changes, leading to the transformation of the Albanian economy from a state-owned into a free market economy. This changeover gave life to the two-tier banking system in Albania. On 22 April 1992, the Bank of Albania was established upon the approval of the Law No. 7559, “On the Bank of Albania”, which was revised later in accordance with western models and recommendations from international organisations.

The Bank of Albania is the central bank of the Republic of Albania. Its functions have significantly evolved since its establishment, in line with economic, political, and social developments.

Article 161 of the Constitute of Albania ratifies the status of the Bank of Albania and the Law. 8269, dated 27.12.1997 “On the Bank of Albania” sets out the objectives, duties, and relationships with the banking system and the state, organization, and management, ownership equity, financial statements, and profit allocation.
The Bank of Albania is accountable to the Assembly of the Republic of Albania and its paid-up capital is owned exclusively by the State of Albania. The Bank of Albania is governed by the Supervisory Council, composed of 9 members, appointed by the Assembly of the Republic of Albania for a term of seven years, eligible for reappointment.

The Supervisory Council is chaired by the Governor, who also serves as the General Executive Director, in charge of the day-to-day business of the Bank of Albania.

Within the competences defined by the Law, the Bank of Albania is independent of any other power for accomplishing its main objective and exercising the assigned duties. Every entity shall respect the independence of the Bank of Albania, shall not try to have an influence on any member of the Supervisory Council, and shall not interfere in the activities of the Bank of Albania.

The Bank of Albania, with the attribute of the monetary and supervisory authority, performs the following functions:

Formulates, adopts and implements the monetary policy of the country, and employs the appropriate monetary instruments to achieve the monetary policy targets;

Has the exclusive right to issue and circulate the national banknote and currency;

Holds and manages the foreign reserve of the Republic of Albania;

Formulates, adopts and implements the foreign exchange regime and the exchange rate policy;

Grants or revokes a license for exercising banking activity and supervises the banking activity to safeguard the banking system stability;

Acts as a banker, an adviser to, and fiscal agent of the Government of the Republic of Albania; Serves as Bank of banks; Promotes the normal functioning of payment systems.

The Bank of Albania has its headquarters in Tirana. It also has five branches in the districts of Shkodra, Elbasani, Gjirokastra, Korça, and Lushnja.

Organizational Structure:
Supervisory Council:
Mr. Gent Sejko, Chairman Ms. Ela Golemi, Member
Ms. Elisabeta Gjoni, Deputy Chair Ms. Ermelinda Meksi, Member
Ms. Natasha Ahmetaj, Member Mr. Petraq Milo, Member
Mr. Tonin Kola, Member Mr. Dhori Kule, Member
Ms. Denada Prifti, Member

Governor: Mr. Gent Sejko
First Deputy Governor
Ms. Elisabeta Gjoni
Second Deputy Governor
Ms. Natasha Ahmetaj
Inspector General
Ms. Merita Bejtja

Governor’s Office Mr. Donald Duraj, Chief of Cabinet
Secretary of Supervisory Council Mr. Elvis Çibuku
Supervision Mr. Deniz Deralla, Director
Human Resources Mr. Andi Bala, Director
Legal Mr. Altin Naqe, Director
Audit Ms. Merita Bejtja, Inspector General
Monetary Operations Mr. Marian Gjermeni, Director
Monetary Policies Mr. Erald Themeli, Director
Financial Stability Mr. Klodion Shehu, Director
Statistics Ms. Argita Frashëri, Director (Acting)
Research Mr. Altin Tanku, Director
Issue Mr. Virjon Lalollari, Director (Acting)
Payment Systems and Accounting and Finance Ms. Anjeza Beja (Harizaj), Director
Information Technology Mr. Indrit Xhemali, Director
Administration Ms. Jonida Mero, Director
Security and Protection Mr. Ilir Mollaymeri, Director
Bank of Albania Branches
Shkodër Ms. Ermira Istrefi, Director
Elbasan Mr. Thoma Rula, Director
Gjirokastër Ms. Anila Thomaj, Director
Korçë Ms. Liljana Zjarri, Director
Lushnjë Ms. Shpresa Meço, Director
Banking Holidays



Payment and settlement systems play an important role for the stability and efficiency of the financial sector and the economy of the country as a whole. Moreover, the implementation of monetary policy in the country depends on the existence of reliable and effective market infrastructures. Payment systems are the means by which funds are transferred through banks, as well as a major channel by which shocks might be transmitted across domestic and international financial systems and markets. Robust payment systems are, therefore, a key requirement in maintaining and promoting financial stability. Safe and efficient payment systems are critical to the effective functioning of the financial system.

Role of Bank of Albania:

Promoting the smooth operation of payment systems is, therefore, a principal task of the Bank of Albania. For the fulfilment of this task, Bank of Albania applies at least three different approaches:
takes an operational role – BoA provides settlement means for payments; it runs a large value payments system in domestic currency (AIPS – Albanian Interbank Payment Systems), an automated clearing system for the netting and clearing of payments (credit transfers and direct debits) in domestic currency (AECH – Albanian Electronic Clering House);

Conducts oversight activities – BoA sets standards and regulations with a view to ensuring sound and efficient systems for processing transactions in ALL, as well as assesses the systems against these standards; and acts as catalyst – BoA promotes efficiency across payment systems and payments instruments.

The Bank of Albania has a major role and commitment in developing the national payment system, particularly because of its strong interest in financial stability, its concern to ensure the proper functioning of the banking and financial system, and its principal function to implement the country’s monetary policy.

Payment instruments are cashless means of payment, such as credit transfer, direct debit, payment card, cheque and promissory note. These instruments allow the transfer of funds, held in accounts opened with banks, between the payer and the payee, based on the receipt of a payment instruction.

The payment transaction consists on the initiation, validation and transmission of a payment instruction. Based on the payment instrument type, the instruction may be initiated by the debtor (credit transfer, payment card, etc.) or by the beneficiary (direct debit, cheque, etc.).

During the clearing and settlement of transactions, banks exchange among themselves the claims arising through these payment instruments, via the systems (for small value payments or large value payments) and settle the net amount of these reciprocal claims via AIPS.

A payment system is a set of instruments, procedures and rules for the transfer of funds among participants (credit or financial institutions) in the system, relying on an agreement between the participants in the system and the system operator. The funds transfer is performed via an agreed upon technical infrastructure (Source: CPSS report titled Core Principles for SIPS, January 2001).

In Albania there are two inter-bank payment systems owned and operated by BoA: a real time gross settlement system (AIPS) and a retail payment system (AECH). In addition, Bank of Albania owns and operates the central system on settlement and registration of securities – AFISaR, which serves as the cenral depository of the securities issued by the Albanian government.

BoA is providing facilities for net settlement (manually processed) of cheques and cards payments (VISA and MasterCard) in domestic currency, as well as the settlement of cash leg for Governments Securities transactions (bills and bonds denominated in domestic currency).
Albanian Electronic Clearing House System – AECH

The Bank of Albania offers the clearing service since 1997. Through this service, the processing of customer-initiated cheques and interbank payment clearing is effected.

The system AECH as one automated clearing system for small value payments, fully integrated with AIPS, and the net clearing position shall be a settlement in the AIPS , started operating live on July 8, 2005.

This system is based on the service provided by SWIFT-purpose use of the SWIFT Net File Act service, in which file-t AECH exchanged between members of CUG in Store or Forward, and direct participants are 16 banks. This system is scheduled to participate, as indirect participants and the Ministry of Finance where its payment settlement through the technical account of the Bank of Albania.

During the day, in AECH proceeds three sessions in accordance with the operating schedule. The first session started in the 8:35 am finished in the 10:15, the secondary session starts at 10:35 and ends at 12:45, meantime the third session starts at 13:00 and ends at 15:00 . Closing day the AECH system realization after 16.15.
As regards interbank and personal cheques clearing their continues to achieve through physical exchange clearing sessions that proceed every day at 13:00 at the Bank of Albania.

Albanian Financial Instrument Settlement and Registration System – AFISaR

The system of security settlement and registration – AFISaR (Albanian Financial Instrument Settlement and Registration) is the central system of settlement and registration of the securities issued by the Albanian government, for which Bank of Albania organizes the auction based on the Memorandum of understanding signed with Ministry of Finance. Communication with AFISaR is based on swift-type messages realized through access on the Virtual Private Network (VPN) or through SWIFT.

AFISaR is fully compliant with BIS principles to conduct settlement of the securities transaction respecting the Delivery versus Payment principle. The settlement of the primary market transactions is based on DVP Model 2, while the settlement of the secondary market transactions is based on DVP Model 1.

AFISaR’s participants fall into two categories: direct participants and indirect participants. Direct participants have securities accounts directly into the system and they can operate themselves these accounts by sending orders through VPN or Swift. The indirect participants have their accounts opened and operated by direct participants.

AFISaR went live on 19th January 2015. Except Bank of Albania and Ministry of Finance, there are 16 other direct participants.

Bank of Albania and its role in issuing currency notes
The Bank of Albania has the exclusive right to issue banknotes and coins of legal tender in the Republic of Albania. It is the sole issuer of the national banknotes and coins. The monetary unit of the Republic of Albania is “Lek”.
I ssue implies putting in circulation banknotes and coins of legal tender. Every banknote and coin has the issuing year printed on it.

In addition, the Bank of Albania is entitled to define the form, size, model (configuration) and other features of Albanian banknotes and coins that are legal tender, as well as banknotes and coins minted for numismatics purposes.

The term “ Legal tender currency” refers to banknotes and coins, which may be provided for the payment of a debt and that a creditor is compelled by law to accept them.

Banknotes and coins issued by the Bank of Albania that are not withdrawn from circulation shall be legal tender and widely accepted for all payments of public and private charges at their face value.
Therefore, the currency (banknotes and coins) meeting the three following criteria altogether:
issued by the Bank of Albania,
not withdrawn from circulation,
are legal tender,

can be used as a means of payment and shall be accepted for all payment charges that public and private persons or different entities make with each other.

The Bank of Albania, pursuant to the drafting, approval, and independent implementation of the monetary policy of the Republic of Albania as well as to the approved monetary program, formulates the strategy to issue banknotes and coins of legal tender for meeting the current demand of the economy.

The Bank of Albania designs the withdrawal policy of old banknotes and coins from circulation and their exchange with new issues. It sequestrates and confiscates counterfeit banknotes and coins.

Source: https://www.bankofalbania.org/web/BoA_role_in_issuing_currency_notes_2000_2.php

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