On the official websites of ten commercial banks operating in Kosovo, the minimum commissions for international transfers range from 15 to over 500 euros, depending on the amount, currency and type of client – individual or business.
For every bank transfer of up to 10 euros that it makes abroad from commercial banks in Kosovo, or that it receives from abroad, the Kosovo beverage producer “Frutex” pays a minimum of 100 euros. The company’s owner, Shaqir Palushi, says that this amount is usually divided equally: 50 euros is paid by his company when it receives the funds and 50 euros by the sending party. But, according to him, the problem is not only financial, as delays in receiving funds are significant. “The arrival of funds can take up to five working days. This is a burden for any business that imports and exports goods,” Palushi tells Radio Free Europe.
According to him, the main reason is the fact that Kosovo is not a member of the Single Euro Payments Area – SEPA, therefore the commissions are much higher than in countries that are part of this system.
HIGH RATES ALSO AFFECT CITIZENS
Kosovo citizens living abroad also face similar problems. Blerim Ramadani, who works in Germany, says he sends money to his family in Kosovo only through money transfer companies, not through banks. “I only sent 7 euros through a bank once and my father in Kosovo received 60 euros less. Now I only use financial services companies,” he says.
On the official websites of the ten commercial banks operating in Kosovo, the minimum commissions for international transfers range from 15 to over 500 euros, depending on the amount, currency and type of client – individual or business. Transferring money through financial services companies, in most cases, is cheaper and faster and with a more favorable exchange rate.
CBK TOWARDS SEPA MEMBERSHIP
In order to reduce banking costs, the Central Bank of Kosovo (CBK) completed the pre-application phase for SEPA membership with the competent body of the European Commission at the end of last year. According to the CBK, Kosovo’s inclusion in SEPA is expected to bring annual savings of around 55 million euros for citizens and businesses. A prerequisite for membership in this mechanism is the harmonization of the local legal framework with that of the EU.
The pre-application phase, according to the CBK, was completed on October 14, 2024 and was updated on December 20 of the same year, following the adoption by the Assembly of the relevant laws and 20 new regulations approved by the CBK Board. “The European Commission has accepted the documentation, but the final application can only be submitted after the laws enter into force,” the CBK’s response to Radio Free Europe/Radio Liberty states.
The final application has not yet been submitted, as three important laws – the Law on Banks, the Law on Payment Services and the Law on the Prevention of Money Laundering and Financing of Terrorism – are being reviewed by the Constitutional Court of Kosovo, following a complaint by the Democratic Party of Kosovo for procedural violations during the approval. “The CBK is prepared to proceed with the submission of the final application for SEPA membership and, within the specified deadline after the technical and infrastructural adjustments of the banking system, to implement the interconnection with this area, also addressing the suggestions of a technical nature, received from the informal comments of the EU from the previous phase,” the CBK response states.
The Constitutional Court of Kosovo confirms to REL that the issue of the laws in question is still under review.
“The decision will be made after reviewing all constitutional aspects of the claims made in the request by the submitting party, in accordance with the Constitution, the Law on the Constitutional Court and the Rules of Procedure of the Court,” the response states.
EXPERTS: BIG SAVINGS FOR CITIZENS AND BUSINESSES
According to financial expert Nexhat Miftari, former chief of staff of the CBK governor, SEPA membership will have a direct positive impact on everyone. “Citizens who receive remittances or other transfers will be subject to much cheaper fees. Incoming and outgoing transfers will be faster, safer and easier to carry out,” Miftari tells Radio Free Europe.
He adds that banks in Kosovo are already technically prepared to adapt to SEPA standards, as most of them come from European Union member states.
According to Miftari, the benefits will also be visible to foreign investors, although “current political and economic developments do not guarantee an immediate increase in foreign direct investment.”
EXAMPLES FROM THE REGION
In the Region, Albania and Montenegro joined SEPA on 7 October this year. Albanian Prime Minister Edi Rama has stated that bank transfer fees have now been reduced to 1 to 3 euros for amounts between 100 and 500 euros. Before joining, for 100 euros, the recipient in Albania received 88-90 euros, as banks kept up to 10% of the amount. Serbia and North Macedonia also joined the SEPA system in the first half of this year, facilitating cross-border payments in euros in most of the Region.