Fehmi Mehmeti: The international arbitration recognized the fair
decision of the Central Bank of the Republic of Kosovo
Speech by Mr Fehmi Mehmeti, Governor of the Central Bank of the Republic of Kosovo,
at a press conference, Pristina, 19 November 2022.
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Honourable representatives of the media
Dear citizens,
Thank you for your participation in this press conference. I am pleased to share with
you today very good news for the Republic of Kosovo and in particular for the Central
Bank of the Republic of Kosovo. As you are aware, the Republic of Kosovo has won the
case of international arbitration against the financial institution Iute Credit.
Iute Credit Microfinance Institution was registered on 27 October 2017, with which
registration it is authorized to carry out financial activities of granting loans.
Through its licensing policy, the CBK continuously aims to provide the best possible
conditions for access to finance in Kosovo, enabling the operation in our financial
market only of institutions that contribute to the stability and development of the
financial system and, consequently, the sustainable economic development of the
country.
During the period of operation of Iute Credit in Kosovo, this institution has continuously
deviated from the business plan, based on which it had received the license to operate,
thus bringing to our market something different from what it had promised.
In accordance with the duties and responsibilities related to the supervision of financial
institutions, the CBK has conducted two examinations focused on this institution on its
compliance with the operation in addition to the business plan approved at the time of
registration by the CBK.
CBK's examinations had identified a series of major violations, and that the interest
rates applied by this institution are beyond any standard, be it even if we compare them
with the projections of this institution, or in relation to the loan interest rates that are
applied from other financial institutions in the country.
This deviation was contrary to the legislation in force, and with its activity, it had
endangered the solvency of the borrowers and thus presented a risk to the financial
stability of the country.
Based on the violations identified by successive examinations, the Executive Board of
the CBK, on 6 December 2019, based on the powers guaranteed by Article 36
paragraph 1, sub-paragraphs 1.11 and 1.12, as well as article 67 paragraphs 1 and 2 of
the Law on the Central Bank of the Republic of Kosovo, as well as in accordance with
Article 105, paragraph 1, sub-paragraph 1.10 of the Law on Banks, Financial
Institutions and Non-Banking Financial Institutions, decided to revoke the registration
and initiate liquidation procedures for the microfinance institution "Iute Credit Kosovo" J.
S.C.
CBK has been and remains confident in the legality and proportionality of the decisions,
in relation to this institution and all the decisions issued by its executive bodies.
The institution in question, in accordance with their legal right, had initiated a claim
before the International Arbitration, to dispute the legality of the decision of the
Executive Board of the CBK.
CBK thanks the Government of the Republic of Kosovo for initiating the allocation of
funds for the defence of the Republic of Kosovo during the arbitration. The CBK also
thanks the Ministry of Justice and the State Bar for establishing direct contact between
the CBK and the defence firm for the Republic of Kosovo.
From the beginning, I appointed the former deputy governor Sokol Havolli as the bearer
of this process, who, in cooperation with his subordinates, successfully carried out
every phase in defence of the Republic of Kosovo, being also the key witness at the
arbitration.
Also, I seize the opportunity to congratulate all the other employees at CBK who have
been on top of their duties throughout the entire work and defence process. Our faith in
the professionalism of the employees at CBK has never wavered.
As a result of all this commitment and a professional process by the Central Bank of the
Republic of Kosovo, we have managed to have an epilogue 100% in favour of the
country. As the bearer of all responsibilities within the institution I lead, I feel happy with
this result and with all the results achieved over the years. As important as the result is
the fact that the costs associated with this process will be borne by the claimant. I feel
special pride that I have managed to protect the state, the citizens, the institution, and
financial stability throughout this time, in cooperation with all my colleagues at the CBK.
At different times, we have faced challenges and orchestrated attacks from both inside
and outside, which were intended to damage the processes of CBK but also my
reputation, the reputation of CBK and that of the Republic of Kosovo. In some cases,
they have made me feel bad. But I have never felt that I am not following the law.
Finally, let me inform you that the Central Bank of the Republic of Kosovo is committed
to creating conditions for increasing healthy competition in our financial market,
enabling a fair competition between financial institutions that ensure increased access
to finance and improvement of conditions, but will never allow the operation of those
institutions that do not comply with the regulatory and legal requirements of the country,
and of those that take advantage of the difficult financial conditions in which a part of
our citizens may find themselves, bringing services which impoverish them and make
their lives even more difficult.