BANK OF ALBANIA
Decisions by the Supervisory Council, 3 July 2019
Publication date: 03.07.2019
On 3 July 2019, in addition to the decision to keep the policy rate at 1.0%, and the overnight deposit and the overnight lending rates, at 0.1% and 1.9%, respectively, the Supervisory Council of the Bank of Albania reviewed and decided to:
- Approve the regulatory package for the implementation of the recommendations of MONEYVAL Experts Report on Anti-Money Laundering Measures and the Financing of Terrorism
The package consists in amendments to: the regulations on licensing and activity of banks and branches of foreign banks operating in Albania, non-bank financial institutions, savings and loan associations and their unions, foreign exchange bureaus; and, the regulation on “ Risk management in the activity of non-bank financial institutions”, related with anti-money laundering and terrorism financing. The purpose of this package is to ensure the implementation of the recommendations left by the MONEYVAL - Committee of Experts in the framework of the fifth evaluation round for Albania.
The approved amendments consist in strengthening the Bank of Albania‘s requirements for institutions applying for a license or for shareholders/partners and the institutions licensed by the Bank of Albania when changing the qualifying holding and undergoing legal re-organisation.
Also, these amendments place additional emphasis on the continuous monitoring process by the Bank of Albania of the shareholders or partners of banks and non-bank financial institutions and the managing bodies of non-financial institutions and of the savings and loan associations.
- Approve regulatory acts in the framework of the Inter-Institutional action plan for reducing non-performing loans
One of the main approved acts was the Regulation “On addressing out-of-court settlement for non-performing borrowers that are exposed to more than one bank”, also known as the “Tirana Approach”, compiled in the framework of Bank of Albania’s commitments in the Inter-Institutional action plan for reducing non-performing loans. This regulation was compiled in collaboration with experts from the World Bank (FinSAC project) completes the package of measures of the Bank of Albania for addressing non-performing loans in Albania.
This Regulation focuses on facilitating financial recuperation for large past-due borrowers that are exposed to more than one bank, and envisages the establishment of a common platform among the banks to find an adequate solution for the borrower.
Another amendment to the Regulation on “Credit risk management” is the reduction of the term for banks to write off lost loans and the strengthening of criteria for loan restructuring by banks, taking into account practices implemented in EU countries.
- Grant the preliminary approval for the merger by absorption between Union Bank sh.a. and the International Commercial Bank sh.a.
Based on this decision, the Bank of Albania gives the preliminary approval for the merger by abortion between Union Bank sh.a. (the absorbing company) and International commercial Bank sh.a. (the absorbed company). After the completion of the merger by absorption, Union Bank sh.a. will fully own the activity of the International Commercial Bank sh.a.
- Select the London School of Economics, Institute of Global Affairs as an external collaborator of the Bank of Albania
Pursuant to this decision, the Supervisory Council approved the cooperation agreement between the Bank of Albania and the London School of Economics (LSE)’s, Institute of Global Affairs. The LSE is in the top list of best universities worldwide in the field of social, economic, political and international studies.
The cooperation is aimed at enhancing the analyses and research capacities at the Bank of Albania, deepening the knowledge on economic, financial, political and institutional developments and on challenges facing Albania and the SEE region in relation to these aspects.
The Supervisory Council reviewed additional information related to the daily operational and functional activity of the Bank of Albania.