Serbian dinar banned in regulations, accepted in market

Now one year, Kosovo banned the Serbian dinar, but north of the country, money finds its way. While banks refuse it, shops and vendors still admit some more openly, others in the shade. For many citizens, the stop didn't stop transactions, it just made them more complicated.

Miki, an ambulance vendor of trees and vegetables, has set up his stands in the centre of northern Mitrovica -- one of four Serb-run municipalities in northern Kosovo.

Selling his products says he does it in every possible currency.

Whatever they give me... all goes to dollars, francs, euros, but the dinar. No problem. The market is not banned. I don't know. Nobody's stopped him yet. Maybe, at the bank at 11x1>, Mickey says about Radio Free Europe.

Banks in Kosovo, including the country's north, do not make financial transactions with Serbia's dinars.

The regulation of Kosovo's Central Bank, which prohibits payments with other currency but the euro, went into effect on February 1st, 2024, while the transitional period for its implementation ended on May 13th of that year.

Serbia's financial institutions in the north, meanwhile, closed as Kosovo banks opened branches.

This ended the nearly 25-year practice of using the dinar in that area.

Miki says the dinars she collects from the sale, collects them, and with them goes to the border city of Serbia to convert to euros.

Until 10,000 euros, it can carry across the [legal] border without problems. But I can't make 10,000 euros in circulation either for two months”, he says.

In the workshops of several stores in northern Mitrovica, which the team visited REL's first week of March still figures out prices of dinars.

However, in a store of daily consumer products, near “Square King Lazarus”, the owner says dinars payments are prohibited.

The prices in that business were for euros.

Many of his clients, but also other residents of the area, are unable to receive salaries, pensions or other benefits from Serbia's budget, in Kosovo's banks, go to Rashi.

In that city, Serbian authorities have placed ATMs and opened postage points, where Serbian citizens can withdraw their benefits in dinars.

Besides financial institutions, Kosovo authorities have closed down others that have worked within Serbia's system in Kosovo, but some like those in health and education continue to work.

Free Radio Europe asked the Kosovo Tax Administration whether it has done and continues to do inspections at stores in northern Kosovo, about the use of the Serbian dinar, and what are the results of those inspections. But after more than a week of waiting, this institution did not respond.

Kosovo customs, meanwhile, has announced several times that it has banned the entry of dinars from Serbia into Kosovo, with the argument that it does not have the CEC's approval.

“Who gives the dinar, we turn it [at the euro price] and then buy the euro”, says the owner, without wanting to be identified.

He adds that “has acknowledged the risk of having the payments accepted even with dinars, because it does not want customers to be removed”.

With two Serbian and Kosovo bank cards

Rada, from North Mitrovica, tells Radio Free Europe that every day it goes out to buy needed products sometimes at stores, sometimes from ambulance vendors in the vicinity of “King Lazarus”.

She says she receives two pensiones -- one from Serbia to dinars and the other from Kosovo to the euro.

There are two bank cards ) one of a bank in Serbia to withdraw dinars and the other of a bank in Kosovo for the withdrawal of euros.

She says the purchases are made with both euros and dinars.

Whatever's in my wallet it's not important if they're dinars or euros. Just give them the money and everything in order”, says 77-year-old.

And as for other services, Rada says the payment stands out.

We pay the phone with dinars. Electricity is paid for by euros. We pay it off with dinars...”, Rada says.

Two bank cards -- of Kosovo and Serbia -- also have Misko Bojic.

He gets the pension of old age from Kosovo to euros and the pension from Serbia to dinars.

The latter says that going to the Rashka every month has become difficult.

“Sometimes we wait two to three hours at the” border, Bojic says.

He also shows that much of the dinars should convert to the euro, since the services he receives from Kosovo institutions must pay in this currency.

The situation that the Government of Kosovo created, not to use the dinar, is political and is not in order”, according to him.

What does the BQK say?

The Kosovo Central Bank “does not have an available analysis regarding open accounts and services at licensed banks in the country's north”.

So this institution responded to Radio Free Europe's interest in the number of bank accounts, opened by citizens in northern Kosovo, and their requests for bank services.

The CEC stresses only that financial services -- now one year, “are provided by licensed and supervised financial institutions from the BQC”.

Full control of the domestic monetary flow, which has contributed to the rise that the integrity of the financial sector, reduced risk of illegal financing, as well as access to safe services for all citizens”, is said to be in written response.

It also notes that by the end of 2023, the number of financial institutions that have been licensed to exercise their activity in the country's four northern municipalities -- “ -- ready to triple”.

By August 2023, the total number of financial institutions in the north of the country was 17 . ) of which four were banking offices, two at the border points. With current data, this total number has reached 46, out of which 12 are bank offices”, the CEC suggests.

According to the CEC, banking presence in northern Kosovo includes local and international banks.

Radio Free Europe addressed some of them, including Raiffeisen Bank, to ask whether the citizens' banking activities in the north were added, but no response was received.

Malformed “ ”

From the nongovernmental organisation Centre for Social Afirmation Action (CASA), operating in Northern Mitrovica, say that since the Kosovo authorities' decision to ban the Serbian dinar, access to the money of Serbian citizens living in northern Kosovo has been difficult.

This is about the fact that, as they say, most of the income that citizens in this area receive comes from Serbia's budget, which they pay with dinars.

CASA leader Boban Simi speaks more of reasons:

For example, for children in my nest, I have to pay in the Serbian system. I can't do it with euros. But, this payment I can't do here”, says Sinheri, adding that for him and other similar payments goes to the Race.

According to him, this also means shifting monetary flow from one country to another, which, as it says, makes the Kosovo authorities' goal of stopping the Serbian dinar meaningless.

“We are witnesses that Pristina, even further, cannot handle monetary flows. There is no such possibility because they have moved. They're no longer here”, says enemies of Radio Free Europe.

He adds that the only way out of this situation would be an agreement between the Kosovo authorities and Serbia, at the technical level, that would enable the registration of any Serbian financial institution in the Kosovo system.

This idea, mentioned earlier, Kosovo authorities have rejected it, saying the goal is to extend their authority to any part of Kosovo.

The removal of the dinar, however, has prompted numerous reactions from Serbia and the international community, for the fact that the Serb community in Kosovo has for years accepted various payments in dinars from Serbia.

The issue has shaken Kosovo's reports with some Western allies who have urged the suspension of the BEC regulation until citizens affected adjust to the new practice.

But the authorities in Kosovo have not issued a detail, while several meetings between Kosovo and Serbia delegations in an effort to reach any agreement on the issue have ended without success.