Central Bank of Kosovo
The Central Bank of Kosovo (Albanian: "Banka Qendrore e Republikës së Kosovës," ) is the central bank of Kosovo. It was founded in June 2008, the same year Kosovo declared its independence from Serbia, with the approval of "Law No. 03/L-074" on the "Central Bank of the Republic of Kosovo" by the Kosovo Assembly. Before being established as the Central Bank of Kosovo, it operated as the Central Banking Authority of Kosovo (Albanian: "Autoriteti Qendror Bankar i Kosovës"). The official currency in Kosovo is the euro, which has been adopted unilaterally in 2002; however, Kosovo is  not a member of the Eurozone. The headquarters of the CBK are located in the capital of Kosovo, Pristina. Functions and objectives. The following are the objectives of the Central Bank of Kosovo, as listed in "Objectives," Article 7, Chapter III of the "Law No. 03/L-209" Legal framework. Law on the Central Bank of the Republic of Kosovo. The "Law No. 03/L-074" on the Central Bank of the Republic of Kosovo says that the CBK is a fully authorized legal organization, which has the capacity to "enter into contracts, institute legal proceedings and be subject to such proceedings ; and acquire, administer, hold and dispose movable and immovable property." Its capital consists of an authorized budget of €30 million euro, which is controlled by the state and can be used only for its legal purposes. It is an administrative body which functions independently and under the full autonomy of its leading decision-making entities. The Central Bank of the Republic of Kosovo reports only to the Assembly of the Republic of Kosovo. Tasks. The main tasks of the Central Bank, as in Article 8 of the same chapter, include maintaining a stable financial system; regulating the financial institutions  as specified by law; promoting a safe payment system; maintain an appropriate supply of banknotes and coins within the country; holding and managing the international reserves; collecting and producing statistics; working on achieving price stability; informing the Government about its activities, and acting as an economic and financial adviser/banker for the Government, etc. International reserve management. According to Article 15 of the LAW no. 03/L-209 of Central Bank of the Republic of Kosovo, one of the functions of CBK is to conduct transactions in international reserves and manage such reserves consistent with international best practices and subject to  its objectives set forth in Article 7 of LAW no. 03/L-209, respecting security, liquidity and yield, in that order of priority. The Central Bank may hold in its portfolio of international reserves any or all of the following assets: Currency. The currency, or the unit of account, that is used by the Central Bank and the national markets as a medium of exchange is the euro. The currency applied in the general as well as financial market is determined by the Constitutional authority, and the Central Bank single-handedly controls the issuance of banknotes and coins, with no other  institution having that right. Furthermore, it manages the exchange of euro banknotes and coins, and the replacement of banknotes or coins that are visibly damaged by more than forty percent (40%) of their surface area. It also validates the process of reproducing banknotes and coins, and "the creation of any objects that by their design imitate any such banknote or coin" requires the approval from the Central Bank officials. Licensing of banks. The CBK is also responsible for the licensing of banks in Kosovo. The following banks can be found under the current list. Payment systems. The Banking and Payment  Authorities of Kosovo (BPK) planned to establish an Interbank Payment System since November 2000. This idea was initially supported by the International Monetary Fond (IMF) through their professional payment consultants. The recommendations given were based on three development phases, which helped in creating the existing work plan. With the establishment of the Interbank Payments Advisory Committee (IPAC) under the patronage of the Central Bank of Kosovo with the participation of all the other commerce banks, the work continued on framing all the other operational policies on this subject. Interbank Payment System has gone through three main phases. First phase. Interbank  Clearing System started to function on May 7, 2001. This phase was characterized with the manual exchange of payments, with settlements based on NET balance between debit and credit. In this way, the receiving bank account was credited and the debiting account was debited. At the start, since the number of payment was low, the registrations in account were done manually or on individual bases. This was reached with an agreement between the Interbank Clearing System (ICS) and other participating banks. Another interesting fact regarding the first phase was the activity of the Interbank Payments Advisory Committee (IPAC). This committee  was first composed of several banks like ProCredit Bank, NLB Prishtina, Bank for Business. Moreover, Economic Bank joined in June and, towards the end of 2001, Raiffeissen Bank, BKP, and KSB joined also. The committee's obligation was to set the operating rules, the procedure, and standards for Interbank Clearing System. After a year, this committee worked toward Electronic Interbank Clearing System (EICS) which would make possible electronic exchange. Second phase. The change into manual and semi-manual exchange led to other developments and transformations of the Electronic Interbank Clearing System (EICS). In 2002, the full transition to the electronic  system was done. This was achieved in adherence to the necessary IT system and the consultations with KPMG-USAID. The second phase was also categorized with another success, which was the transition to the Standard Numbering System of the Kosovo Banking Accounts. With the assistance of other member banks, this standard reached to be applied to all bank payment accounts that resulted into the increment of the efficiency of the payment system, and more possibilities for new reforms. Another important event was the one on 7 September 2004 when the chief of the American office also the director of USAID  acknowledged the Central Bank of Kosovo as the owner of the Electronic Interbank Clearing System present in Kosovo. Third phase. With the establishment of the EICS system in 2007, the payments delivery system between central and local institutions was highly improved. This eventually progressed into an interconnected framework of all banks in Kosovo. Direct Debit, as the Center's newest instrument of payments was first introduced in January 2009, after the approval of the Central Bank's Rule nr XXXI. The release for the general public has been made possible only in November, after the debit system was tested as  a separate component in the Electronic Interbank Clearing System (EICS). The system was widely recognized by many banks, including ProCredit Bank, Raiffeissen Bank, NLB Prishtina, Bank for Business, Economic Bank, TEB and National Commercial Bank. The system's efficiency has been increased, which indirectly added to the standards and capacity of the interbank system. "Now every day the participants of the interbank payment system send more safely and efficiently about 15 thousand payments worth over 15 million Euros." Development strategy. In 2009, the Central Bank of the Republic of Kosovo initiated many discussions on creating a long term strategy. The  discussions were finalized and approved by the Governing Board of the Central Bank on September 11, 2009, which in collaboration with the commercial banks and World Bank has created an Interbank Payment Systems Directorate (IPSD) within its body, which has the aim to ensure that the development strategies for the financial sector in Kosovo will be met. The 9 pillars in this development strategy for the National Payments System (NPS) are: Real time gross settlement system (RTGS) remains the most important singular project which is being developed under the NPS. Strategic plan (2010–2015). The Central Bank has set five strategic  goals for five years of its operations, with the purpose of aligning the Bank's duties towards the citizens and the economy in general. These goals are: Issuance of bonds. After signing a regulation for primary and secondary government bonds with the Ministry of Finance in December 2011, the Central Bank of Kosovo issued bonds for the first time on January 17, 2012. During its first auction, the CBK was able to collect a sum of €10 million worth of monetary assets. Another €64 million could be raised during the rest of 2012, bringing the total value of  bonds issued during 2012 to €74 million, just as was declared by an adviser to the Minister of Finance on January 9, 2012. It is expected that during the course of 2013, the CBK will be able to raise a sum equal to €80 million. Controversies. On 23 July 2010, Hashim Rexhepi, then the governor of the Central Bank of the Republic of Kosovo, was arrested based on grounds of "corruption and money laundering".