Albania: Financial Institution Compliance Requirements Tightened by Bank of Albania
Strengthening Compliance Requirements for Financial Institutions
The Bank of Albania has approved several key regulations aimed at strengthening compliance requirements for financial institutions in the country. The measures were announced following the Supervisory Council’s meeting on November 24, 2021.
Objective: Promoting Effective Risk Management and Public Transparency
One of the main objectives of the new regulations is to promote effective risk management and mitigate potential risks associated with changes to reference rates. To achieve this, amendments have been made to the Regulation “On Transparency of Banking and Financial Products and Services,” which will ensure a smoother transition to new reference rates.
Key Amendments
- Licensing Process for Payment Institutions and Electronic Money Institutions: The Bank of Albania has adopted several by-laws and amendments aimed at enhancing the licensing process. These changes set out clear conditions, requirements, and procedures for obtaining licenses, as well as notification obligations for entities exercising these activities.
- Granting of Licenses to Non-Bank Financial Institutions: Amendments have been made to existing regulations governing the granting of licenses to non-bank financial institutions, savings and loan associations, and their unions. These changes aim to ensure compliance with new legal and regulatory requirements, particularly in regards to payment services and money transfers.
- Minimum Security Requirements for Premises and Transportation of Monetary Values: Payment institutions and electronic money institutions will now be subject to minimum security requirements for premises where banking and financial activities are conducted, as well as the transportation of monetary values. Banks will be responsible for verifying compliance from their agents when providing payment services through third parties.
Supporting the Bank of Albania’s Medium-term Development Strategy
The new regulations are designed to support the Bank of Albania’s Medium-term Development Strategy, which aims to enhance cooperation within the institution, promote effective use of resources, and increase public transparency and accountability. The strategy will serve as a guide for preparing the planned medium-term budget, which has been approved for 2022 and the period 2023-2024.
Positive Step towards Promoting Financial Stability and Protecting Consumers
The Bank of Albania’s efforts to strengthen compliance requirements are seen as a positive step towards promoting financial stability and protecting consumers in Albania. As part of its ongoing commitment to transparency, the institution will regularly provide updates on the implementation of these measures through its annual reports.
Conclusion
In conclusion, the Bank of Albania’s decision to tighten financial institution compliance requirements is a crucial step towards ensuring financial stability and public transparency in Albania. The new regulations aim to promote effective risk management, enhance licensing processes, and ensure minimum security requirements for premises and transportation of monetary values. These measures will support the Bank of Albania’s Medium-term Development Strategy and contribute to protecting consumers in Albania.