FOREIGN BANKS OPERATION IN KOSOVO

Abstract

One of the most prominent events in the history of the Central Bank of Kosovo-CBK was the conversion to EURO (shifting from the Deutch marks DM to the EUR-euro currency). Although Kosovo is not member of the European Union, it has enjoyed the right to use the EUR currency. By doing so, Kosovo has benefited a monetary policy lead and monitored by the European Central Bank -ECB. This makes the financial system very secure and stable. Based on Law no. 03/L-209 on Central Bank of the Republic of Kosovo (CBK), its primary objective is to foster and to maintain a safe and sound financial system. CBK as a supervising and licensing mechanism of financial institutions supervises the following financial institutions: Banks, insurance companies, microfinance institutions, pension funds and non-bank financial institutions.
The banking system in Kosovo accounts for 85.5% of the financial system assets. In September 2017, the total assets of the banking system amounted to 3,811 million, whereas, loan share accounts for 2.4 million, respectively an increase of 10.2%. Deposits marked an increase to 9.2% of total amount of 3,046 Million. Current number of banks operating in Kosovo is 10, of which 8 are with foreign capital, while the number of employees in this sector amounts to 3,298.
Today, the sector is in the phase of evolving technology development with the tendency to shift from a traditional service to digital or electronic services such as e-banking, POS terminals, ATMs, online application for consumer loans and other electronic services. This strategy helps reduce overall business costs, contributes to the removal of physical money and promotes contemporary banking services that do not differ from the banking system of developed countries.