The Croatian National Bank, as stipulated by the Constitution of the Republic of Croatia, is the central bank of the Republic of Croatia. The status, tasks, objectives and capital ownership of the central bank, its powers, organisation and relations with the bodies of the Republic of Croatia, banks and international institutions and organisations are regulated by the Act on the Croatian National Bank (Official Gazette 75 of 1 July 2008).

Article 53 of the Constitution of the Republic of Croatia, adopted on 21 December 1990, determines the Croatian National Bank as the central bank of the Republic of Croatia with the following responsibilities: “The National Bank of Croatia shall be the central bank of the Republic of Croatia. The National Bank of Croatia shall, within the framework of its rights and duties, be responsible for the stability of the currency and for general payment liquidity at home and abroad. The National Bank of Croatia shall be independent in its work and shall be responsible to the Croatian Parliament. Profits made through the operations of the National Bank of Croatia shall accrue to the state budget. The status of the National Bank of Croatia shall be regulated by law.”

A Regulation on the National Bank of Croatia of 8 October 1991 and a Decision on the Replacement of Yugoslav Dinars by Croatian Dinars (entered in effect on 23 December 1991) stipulated in more detail the central bank’s duties and responsibilities.

The Act on the National Bank of Croatia of 4 November 1992 replaced the quoted Regulation and set out the legal framework for the operation of the central bank of the Republic of Croatia. The Croatian National Bank was given its present name in the Constitutional Act on Revisions and Amendments of the Constitution of the Republic of Croatia of 15 December 1997.

In the consolidated text of the Constitution of the Republic of Croatia (Official Gazette 41/2001) the quoted Article 53 is changed as follows: “The Croatian National Bank shall be the central bank of the Republic of Croatia. The status, rights and obligations of the Croatian National Bank shall be regulated by law. The Croatian National Bank shall be independent in its work and shall be responsible to the Croatian Parliament.”

The Croatian National Bank Act adopted on 5 April 2001 determines, among other things, the status, operations, ownership status, powers and organisation of the Croatian National Bank. This act promotes institutional, financial, and personal independence of the Croatian central bank, and offers a legal framework for its operations which is more in line with that found in the European Union. It determines the primary objective of the Croatian National Bank which is to achieve and maintain price stability.

The Act on Amendments to the Croatian National Bank Act, adopted in December 2006, reinforces the independence of the central bank and establishes the legal conditions for the CNB to become, as of the date of accession of the Republic of Croatia to the European Union, an integral part of the European System of Central Banks (ESCB) and to start carrying out its tasks in accordance with the Statute of the ESCB and the European Central Bank (ECB).

A new Act on the Croatian National Bank, in force since July 2008, further aligns the legal framework for the operation of the Croatian central bank with legal standards of the EU, especially with regard to the degree of independence of the central bank (institutional, functional, personal and financial independence) and the objective of the Croatian National Bank, and sets forth the conditions for the smooth functioning of the CNB within the ESCB and the ECB and for the introduction of the euro as the official currency of the Republic of Croatia. The CNB Act, which incorporates the remarks of the European Central Bank and the European Commission, also takes into account the anticipated changes in other national legislation, for example by introducing the terms "credit institution", "payment transaction settlement system", etc., within the scope required for its purposes, and contains other necessary adjustments pursuant to the Statute of the ESCB and the ECB and secondary legislation of the EU (regulations, recommendations, guidelines, etc.).

The Croatian dinar, introduced on 23 December 1991 as a transitional, interim currency of the independent Croatian state became the sole legal tender in the Republic of Croatia on 1 January 1992. It was replaced by the kuna on 30 May 1994, when this currency was introduced as the permanent official legal tender in the Republic of Croatia.


Status of the Croatian National Bank

The Croatian National Bank is the central bank of the Republic of Croatia. It is autonomous and independent in achieving its objective and carrying out its tasks. The Croatian National Bank has legal personality, but it is not entered in the register of companies. The Croatian National Bank has its seat in Zagreb. The seal of the Croatian National Bank consists of an image of the coat of arms of the Republic of Croatia and the name of the Croatian National Bank. The Croatian National Bank is represented by the Governor of the Croatian National Bank. The Croatian National Bank is in the exclusive ownership of the Republic of Croatia.

The Croatian National Bank is independent in adopting and enforcing its decisions which are based on the Act on the Croatian National Bank and neither seeks nor takes instructions from the bodies of the Republic of Croatia, the bodies of the European Union or other persons. The bodies of the Republic of Croatia or other persons may not influence the adoption and enforcement of the decisions of the Croatian National Bank, nor may they approve, revoke, postpone, cancel, or influence in any other form any decision taken by the Croatian National Bank, or its decision-making bodies, within its competence.

The objective of the Croatian National Bank is to maintain price stability. Without prejudice to the achievement of its objective, the Croatian National Bank supports the economic policy of the Republic of Croatia, while acting in accordance with the principle of an open market economy with free competition.
The Croatian National Bank has the following tasks:

• to define and implement the monetary and foreign exchange policies
  
• to hold and manage the foreign reserves of the Republic of Croatia;
  
• to issue banknotes and coins;
  
• to issue and withdraw authorisations and approvals in accordance with the laws governing the operations of credit institutions, credit unions, payment institutions, payment transaction settlement systems, foreign exchange operations and the operation of authorised foreign exchange offices;
  
• to exercise supervision and oversight in accordance with the laws governing the operation of credit institutions, credit unions, payment institutions and payment transaction settlement systems;
  
• to keep credit institutions accounts and execute payment transactions across these accounts, grant loans to credit institutions and accept deposits from credit institutions;
  
• to regulate and improve the payment system;
  
• to perform operations on behalf of the Republic of Croatia, as provided by law;
  
• to adopt subordinate legislation on the operations within its competence;
  
• to perform other activities, as provided by law.

Capital, Financial and other Statements of the Croatian National Bank

The capital of the Croatian National Bank shall amount to HRK 2,500,000,000.00. The capital of the Croatian National Bank may not be transferred or pledged. The surplus of income over expenditures of the Croatian National Bank is allocated to general reserves and to the state budget.

The Croatian National Bank prepares financial statements for each financial year in accordance with accounting regulations and the International Accounting Standards. The prepared financial statements and the overall operation of the Croatian National Bank shall be audited by independent external auditors in accordance with audit regulations and the International Auditing Standards. The decision on the auditor to audit the financial statements of the Croatian National Bank shall be made by the Finance and Central Budget Committee of the Croatian Parliament on the proposal of the Council of the Croatian National Bank.

The Croatian National Bank, on a semi-annual basis, informs the Croatian Parliament about its financial condition, the level of price stability achieved and monetary policy implementation. On a monthly basis, and at the latest within ten working days from the end of the previous month, the Croatian National Bank prepares, draws up and submits to the Ministry of Finance its summary balance sheet as at the last day of the month concerned. The Croatian National Bank may publish the said financial and other statements, and it may also publish such other reports and studies on financial and economic issues as it deems appropriate.

The Croatian National Bank provides regular and timely information to the public on its analyses of the macroeconomic situation, financial and monetary system conditions, monetary and lending developments, balance of payments, exchange rates and price stability, and publishes statistical information within its competence.


Relations with Government Bodies of the Republic of Croatia

In achieving its legally prescribed objective and carrying out its tasks the Croatian National Bank may, without prejudice to the achievement of its objective, cooperate with the Government of the Republic of Croatia and other government bodies and take actions, within its competence, to promote such cooperation. The Croatian National Bank keeps the accounts of the Republic of Croatia and executes payment transactions across these accounts. The Croatian National Bank may authorise another legal person to execute payment transactions across the accounts of the Republic of Croatia, in accordance with the terms and conditions laid down by the Croatian National Bank, subject to approval of the Ministry of Finance.

The Croatian National Bank may, on such terms and conditions as it agrees with the Ministry of Finance, act as fiscal agent for the Republic of Croatia, in regard to the issuance of debt securities of the Republic of Croatia, acting as registrar or transfer agent therefore; the payment of the principal of, interest on and other charges related to such securities and other matters relating to these transactions, provided they are consistent with the objective of the Croatian National Bank.

At least once in a semi-annual period, the Ministry of Finance consults with the Croatian National Bank on its plans for domestic and foreign borrowing of the Republic of Croatia during the next semi-annual period, including the amounts to be contracted and disbursed under such borrowing, as well as the expected effects of such borrowing. The Ministry of Finance reports to the Croatian National Bank on all domestic and foreign borrowing transactions of the Republic of Croatia, in such detail as mutually agreed upon by the Croatian National Bank and Ministry of Finance.

The Croatian National Bank may require from the Government of the Republic of Croatia to propose to the Croatian Parliament the enactment of laws concerning the achievement of the objective and carrying out of the tasks of the Croatian National Bank, or otherwise relating to its field of activity, including monetary policy and operations, extension of credits, balance of payments, payment operations, foreign exchange policy and banking matters.

The Croatian National Bank may not extend credit to the Republic of Croatia, extra-budgetary funds of the Republic of Croatia, units of local and regional self-government and other public authorities in the Republic of Croatia, as well as public undertakings over which the Republic of Croatia and units of local and regional self-government exercise a dominant influence, nor may it purchase their debt instruments directly from them.

No legal arrangement concluded by the Croatian National Bank with the Republic of Croatia, extra-budgetary funds of the Republic of Croatia, units of local and regional self-government and other public authorities in the Republic of Croatia, as well as public undertakings over which the Republic of Croatia and units of local and regional self-government exercise a dominant influence, may have credit features or be used for extending credit to the Republic of Croatia, extra-budgetary funds of the Republic of Croatia, units of local and regional self-government and other public authorities in the Republic of Croatia, as well as public undertakings over which the Republic of Croatia and units of local and regional self-government exercise a dominant influence, or to third parties acting as intermediaries through which the Republic of Croatia would become the final beneficiary of such credit.

The purchase by the Croatian National Bank of debt securities issued by the Republic of Croatia, extra-budgetary funds of the Republic of Croatia, units of local and regional self-government or other public authorities in the Republic of Croatia, as well as by public undertakings over which the Republic of Croatia and units of local and regional self-government exercise a dominant influence, are not be considered as credit referred to in Article 40 of the Act on the Croatian National Bank, if such purchase has been made in the secondary market in accordance with the monetary policy objectives of the Croatian National Bank.


International Cooperation

The Croatian National Bank may be a member of international institutions and organisations competent for monetary policy, foreign exchange policy, payment operations, the supervision of credit institutions and other areas within its competence, and may participate in their work. The Croatian National Bank may also represent the Republic of Croatia in these international institutions and organisations.

The Croatian National Bank is a member of the Bank for International Settlements.

Useful links

Currency of Republic of Croatia:

Croatian kuna

List of Central Banks:

Central Banks

Official website of Croatian National Bank:

www.hnb.hr

The Low on the National Bank of Croatia:

www.hnb.hr

Former Governors of the National Bank of Croatia:

www.hnb.hr

Financial Statements of National Bank of Croatia:

www.hnb.hr