Successful Cooperation – Safe Deposits in Kosovo


Today, the Deposit Insurance Fund of Kosovo (DIFK), KfW, the German Government Development Bank, and the Central Bank celebrate a milestone in their ongoing cooperation with the aim to assure safe deposits of the Kosovar citizens and to contribute to financial stability: The first anniversary of the Deposit Insurance Fund Kosovo (DIFK).

Already since 2007 KfW and the Central Bank had worked together on the creation of the Deposit Insurance Fund which protects the Kosovar depositors, and which started to exist one year ago. While the Kosovo Government has committed itself to provide 11 million EUR for the Deposit Insurance Fund, the German Government through KfW provided additional 4.5 million EUR grant funds and continues to support DIFK through the provision of consultancy services.

“The Deposit Insurance Fund protects up to EUR 2.000 per each depositor and already now, only one year after its coming into force, insures the deposits in more than 99 % of all bank accounts”, said Mrs. Violeta Arifi-Krasniqi, Managing Director of DIFK, on the occasion of presenting the first annual report of the Fund. “We will pay special intention to informing the Kosovar public and the depositors about the benefits of the new insurance scheme. We will also strive to meet European Union standards as far as possible”, she added.

“Adverse effects of the financial crisis in the region and worldwide point to the importance of sound and stable deposit guarantee schemes. German contribution and technical assistance come at the right time to help us enhance the effectiveness of our deposit insurance system and improve the regulatory framework”, stressed Ramadan Avdiu, d/minister of Finance of the Republic of Kosovo.

“Although the banking system in Kosovo is sound and stable the creation of a well-funded and state-of-the-art deposit insurance scheme is vital for our economy and will help preserve financial stability in Kosovo”, stated Gani Gërguri, Governor of the Central Bank.

“Kosovo has made impressive progress over the last years”, added Ulrike Lassmann, KfW Head of Division of South East Europe and Turkey, “the growing savings of Kosovar people in the banks are a very positive sign for this." Not only do they benefit the savers, she said, but they are also an important source for the financing of Kosovar companies by Kosovar banks. "Making the deposits safe is an absolute necessity for the people, the economy and the country as a whole and therefore an important project for KfW.”

Deposit Insurance Fund of Kosovo (DIFK)

The Deposit Insurance Fund of Kosovo (DIFK) operates the new Kosovar deposit insurance system that protects depositors against losses of their deposits in the case of a bank failure. The main objective of DIFK is to support the stability of the financial system by maintaining depositors’ confidence in the banking sector. The Fund insures deposits of natural and legal persons up to the maximum coverage level of 2,000 Euros and compensates each insured depositor within 60 days in case of a bank failure. DIFK operates on the basis of the “Law on the Establishment of a Deposit Insurance System for Financial Institutions in Kosovo” which had been adopted by the Assembly in October 2010. From 2012 until 2014 the Fund receives technical advice through the German consulting firm GBDS Global Banking Development Solutions fully financed by the German Government (through KfW).

Central Bank of the Republic of Kosovo (CBK)

The Central Bank of the Republic of Kosovo (CBK) has the primary objective to foster and to maintain a stable financial system in Kosovo, including a safe, sound and efficient payment system. In licensing, supervising and regulating the Kosovar banks the Central Bank pays special attention to the protection of depositors’ interests. As part of its legal tasks the Central Bank also oversees the Deposit Insurance Fund. The Governor of the Central Bank is the President of the Management Board of the Fund. The Cooperation between the Central Bank and the Fund with regard to the exchange of information and other issues of mutual interest is regulated by a Memorandum of Understanding. The Central Bank has provided intensive human and technical resources to help establishing the Deposit Insurance Fund.

KfW Entwicklungsbank (The German Development Bank)

KfW Entwicklungsbank is Germany’s leading development bank. Its mission is to help the Federal Government implement its goals in international cooperation with developing and emerging countries. KfW aims to implement projects to their needs and those of their populations.
In Kosovo, KfW is supporting projects in a various sectors. Over the past 12 years funds from the German Financial Cooperation (implemented through KfW) amount to more than 230 million EUR.
One of the most important projects was to help founding the Micro Enterprise Bank after the end of the conflicts in 2000 when the financial sector in Kosovo needed to be rebuilt almost completely. The bank is now successfully operating as ProCredit Bank Kosovo. Another measure of support in this time aimed at the rehabilitation of damaged residential buildings – urgently needed since many buildings suffered from damages during the conflict. The German Government, through KfW, supported the restoration of more than 40.000 houses over 10 years. These and many other projects demonstrate Germany’s and KfW’s long lasting commitment to support Kosovo’s economy and people.