PRESS RELEASE
Address made by Mr. Fatos Ibrahimi, First Deputy Governor of the Bank of Albania, in the joint press conference in the Ministry of Finance on ''Beyond cash'' Program

Bank of Albania has identified as one of its priorities the reduction of "cash" in the economy, for the concerning level this phenomena reflects for Albania. Currency outside banks against the monetary aggregate M3 presently marks about 26 per cent. Although being the lowest recorded level over the past years, it remains high in respect to the international standards. Pursuant to our surveys, only a small part of households have a banking account, while the level of those using regularly the bank for the every day transactions leaves much to be desired.

Bank of Albania has also identified cash in the economy related not only with the Albanian public education shortage with banks, but also with the economic and financial crime. Cash assists the informal business as well in the economy and particularly the fiscal evasion, and on the other hand is a serious obstacle on the well - functioning of transmission mechanism of the Central Bank monetary policy.

These are some of the main grounds that led Bank of Albania, as banking sector representative, and the Ministry of Finance as Government and public institutions' representative to sign together a concrete plan of operations in the framework of the "Beyond cash" program.

What is done so far?

After some months process of banking system, business, civil society community and media awareness, the Bank of Albania committed the real steps on some directions. The regulative and legal framework adopted from the Bank of Albania is in function of modernizing the interbanking payments system.

Bank of Albania, with the assistance of the World Bank, succeeded in making into work the RTGS system, facilitating and fulfilling in due time and by real cost the gross payments among banks. Bank of Albania and the World Bank, are on the stage of achieving the project AIPS, thus completing the required infrastructure on interbanking payments.

The Bank of Albania, since June, succeeded the pilot project of paying its employees payments through the banking account in a bank of the banking system, being selected based on the competitive offers and of a transparent process. The commercial banks are involved themselves in an intensive marketing process of banking services and of opening new branches, falling of banking commissions, investments for ATM, offering new banking products for the clients, etc.

On the other hand, due to a transparent and supporting process of IMF, World Bank and OSCE , Bank of Albania has worked to perform public awareness, attaining its support in the process of cash replacement with banking transactions

Challenges of the Bank of Albania and of the Banking system.

Payments shifting through banking system is the first step of "Beyond cash" program, that is expected to have a considerable impact on liquidity passing through banks. The major part of the commercial banks offer the payment of public services through banking accounts and the program forecasts that the liquidation of monthly obligations of telephone, electricity, water etc, be completed through banks for those having a banking account .

In a second stage the program previews the improvement of the legal and administrative aspects of e-payments and of banking via internet, etc. The institutions will carefully review the law on banking secret, the law on money laundering prevention and the legal framework concerning banking operations to identify the weak points that lead to the development of the informal activity and to undertake the necessary legal improvements.

Credit Information Bureau is another challenge of the banking system, which it is deemed to give an important contribution on the development of a sound lending activity of banks for the business as crediting is picking up by 30 per cent every year. Bank of Albania is fully committed to perform the necessary arrangements of the regulative framework, financing ways of the project and the commitment of the concrete steps so far to the establishment of this bureau.

Commercial banks are committed in the marketing process of banking services, particularly of credit and debit cards, the broadening of ATM network, POS (point of sale), while Bank of Albania aims public education through a full educating and awareness packet.

All these designed measures established in a two - year plan of concrete operations, are expected to display the desirable impacts on cash reduction in the economy.

Thank you!