PRESS RELEASE
The speech held by the Bank of Albania Governor, Mr. Shkelqim Cani in the ceremony inaugurating Albanian Interbank Payment System

Honored participants !

Thanking you for your participation, I have the pleasure to inform you officially on the implementation and inauguration of the real time interbank payment system. I say officially because the Albanian Interbank Payment Sysstem is fully operative since January 30, 2004, after having successfully passed through all necessary tests.

I don't think I exaggerate saying that the Bank of Albania has made one of the most important steps in the reforming process of the banking system towards international standards over the recent years to develop and perfect the country's banking system infrastructure.

When we launched the project, I didn't fully believe in the implementation of the project within the term set forth, given the non-positive experiences in the countries that have implemented the same project.

The process faced difficulties, among which, the most important, I think, are: the coordination of a large number of actors in the project, the overall country's infrastructure, which, we should accept, has remained unfavorable to the extended information system implementation, and the limited experience in implementing important payment systems, which are complex and aim at a high degree of technical and legal issues.

However, the system implementation within 8 months generally, was a very positive result if compared to same experiences of similar countries. I think this was an outcome of a joint work of the Bank of Albania and the banks using the system.

Albanian Interbank Payment System - AIPS, may currently be regarded as the main linking infrastructure of the whole banking system. It establishes optimal and equal conditions, either for carrying out exchanges between banks or for safe interbank market development.

It is installed at the Bank of Albania and is extended in all participant banks through safe communication networks. The system holds banks' accounts and enables immediate and real time settlement of all payment instructions, which are set in motion through electronic massages. The settlement and finalization of these instructions is performed through immediate movement of funds between accounts that the banks hold in with the system. Then the system takes care of immediately advising the beneficiary of funds and of allowing their usage.

Turning to some of the benefits that the system will bring about, I would briefly highlight that, it is expected to:
1) Reduce the degree of banking system operational risk;
2) Enhance the overall banking system stability;
3) Increase efficiency in managing financial funds and in exchanging values between the banking system;
4) Further encourage developments in payment area and in the overall financial sector; and
5) Directly impact on increasing reliability and reputation of Albanian banking system in the eyes of foreign and domestic public.

It would also be beneficial to:

- Albanian business, which may settle intraday payments or fund transfers to any bank branch.
- Public at large, which may settle intraday "fast payments - AIPS" at any time.

Given the experience of similar countries, I believe that the benefits of the new system will be comprehended and felt soon enough by all its users.

How is the system functioning?
The so far performance and behavior of the system is positive. Since the first day of operation the processing of 94 payments at a value of about 40 million dollars was carried out, while during the first month of operation, the system has finalized on average 100 payments daily, with a value of 48 million dollars. The maximum loading recorded is to about 130 payments per day, at a value exceeding 100 million dollars. The full instruction processing time is on average less than 2 seconds.

We deem that the system itself will promote on the one hand banks, to be more active in managing their funds, and on the other hand Albanian business and public, to use the fast payment system more and more.

I take advantage of the opportunity to greet banks that are members of the system, expressing my belief and that of the institution I govern that this cooperation will be further enhanced in the future, especially in two major Bank of Albania projects: that of small value payment clearing and that of cash reduction in economy.

After the implementation of this project the Bank of Albania has planned to further continue the country's financial infrastructure improvement, being committed to another project at national extent, that of small value payment crossing. Given my belief that even in this case the inter-institutional cooperation and understanding would be the same, I express my assessment that a successful implementation of this new project would note an important step in terms of meeting our major objectives.

I would consider the new project so much important also in the function of the latest initiative undertaken by the Bank of Albania to public opinion, that of cash reduction in economy. Regardless of the complexity and inter-institutional dependence existing in accomplishing this incentive successfully, I am convinced that the payment crossing system, along with the modern system that is being inaugurated today, will be two determinant steps in ensuring success.

Naturally, a number of actors participated in implementing the project, to which I would like to express:

• My sincere thanks to the World Bank and its staff in being committed to the project, as initiators, co-financiers, and main supporters of the Bank of Albania for this project. Simultaneously, I take advantage of the opportunity to express my confidence in the successful cooperation for the project on establishing the automated small value payment clearing.
• Special compliments to Montran company, Mr. Charls Walch, Vice President - and staff, who managed the timely and qualitative implementation of the project through cooperating continuously with the Bank of Albania.
• Special thanks to the International Monetary Fund and to the Project Implementation Unit at the Ministry of Finances.
• Finally, sincere thanks to the Bank of Albania staff who made possible the successful implementation of this project with their professionalism.

Successes to all users of the system and thank you !