of systems ; advance the regulatory and supervisory framework for the prevention of money laundering and terrorist financing related to payment and compliance services ; empower the national payments council at the country level ; and advocate for enabling access to international payment platforms ( paypal, apple pay, google pay, samsung pay, etc. ) to support e - commerce. therefore, the central bank of the republic of kosovo, according to the legal mandate and through its strategy, is in the process of advancing the regulatory and supervisory framework and infrastructure in the area of payment services, toward harmonization with the legislation of the european union, [ the directive of payment services 2, electronic money directive and payment account directive ], pfmi and other international standards in view of membership in sepa and eu payment systems. in this regard, membership in tips and the sepa scheme remains our strategic objective, which would facilitate trade in our country and beyond, supporting economic growth and strengthening the stability of the financial system, and in this way would significantly contribute to an innovative, efficient and integrated payment system. for this purpose, cbk will develop important projects in order to improve services to citizens, where investments will be made in building infrastructure capacities and human resources. by investing in this direction, we will ensure that systems, equipment, knowledge, skills and personnel tools enable transformation and are relevant and effective in overseeing the risks of new technologies and innovative business models. this is also related to the cbk's plan for the creation of a special function for the supervision of information systems or cyber risk for financial institutions, the function of supervision of the practices of providing services by financial institutions, as well as the strengthening of financial education, as a mean to have a correct and fair treatment of requests arising from such services. in addition to the opportunities and facilities presented by the use of information technology, the cbk will carefully deal with the risks that are going to appear, such as strategic, reputational, operational, cyber risk and compliance risk, and will work closely with academic institutions in carrying out research and scientific research related to the area of access to finance and financial inclusion. cbk, within the regulatory and supervisory scope, expects that the financial industry which also includes non - banking financial institutions : to have adequate risk management practices and processes in cases of outsourced services, which include due diligence, operational risk management, continuous monitoring and proper execution of contracts with providers of outsourced services from external parties defining each party's responsibilities ; and 2

2016. the combination of a steady downward growth trend with upside risks to inflation compounded the dilemma facing monetary policy. at the last two mpc meetings, in may and july, moderate improvements in the inflation outlook and a moderation of the upside risks to the inflation bis central bankers ’ speeches outlook gave the mpc room to pause in the interest rate cycle. the mpc emphasised the continued data - dependence of future moves, as the factors that gave rise to the moderation of these risks could reverse very quickly. although the mpc remains ready to respond to renewed inflation pressures, it remains mindful of the weak state of the economy and will continue to support the economy to the extent possible within its flexible inflation targeting remit. the expanded mandate of the bank gives it responsibility for financial stability and this has been a key focus area during the past year. the financial sector regulation bill has been tabled in parliament, and it is expected to be promulgated during this year. the bill assigns responsibility to the bank to protect and enhance financial stability. the proposed prudential authority is taking shape, but pending finalisation of the legislative framework. this process has already had significant resource implications for the bank. at the microprudential level there has been the successful resolution of the african bank curatorship, and the creation of the “ good bank ” which commenced operations in april 2016. the domestic banking system remains sound and well capitalised. whilst the bank is an institution not driven by profit, the strength of the financial position of the bank is important for its independence. i am pleased to report that the group continued to be profitable in this past financial year. the group recorded an after - tax profit of r1, 58 billion compared with a profit of r0, 63 billion in the previous financial year. the bulk of the profit is attributable to the bank with an after tax profit of r1, 51 billion, up from r0. 34 billion in the previous year. this improvement in the financial position of the bank was attributable mainly to the increase in accommodation to banks and unrealised profits due to declining global bond yields and the depreciation of the rand against major currencies. the depreciation increased the rand value of the interest earned from investing the country ’ s foreign - exchange reserves. operating costs declined due to a reduction in the banknote order which lowered the cost of new currency. this decline was partly offset by higher staff costs.