Kosovo police closed six branches of a Serbia-licensed bank on Monday, in compliance with the decision to ban the use of the Serbian dinar currency in the country. The branches belonged to the Postal Savings Bank and were shut down following a request from financial institutions citing their illegitimacy. The closure was authorized by the prosecutor's office.
Effective February 1, the Kosovo government mandated that areas predominantly inhabited by the ethnic Serb minority switch to using the euro currency, which is the official currency in the rest of the country. This move eliminated the use of the Serbian dinar within Kosovo.
Initially scheduled to take effect sooner, the decision was postponed for approximately three months due to pressure from the European Union and the United States. Concerns were raised about the potential negative impact on the ethnic Serb minority residing in northern Kosovo.
While the majority of Kosovo uses the euro despite not being an EU member, parts of the northern region, primarily populated by ethnic Serbs, have continued to rely on the dinar. Many Serbs in these areas depend on financial support from the Serbian government, often provided in dinars in cash.
Efforts to normalize relations between Serbia and Kosovo have faced challenges, particularly following a violent incident last September involving masked Serb gunmen and Kosovo police, resulting in four fatalities and escalating tensions.
Both countries have expressed a desire to join the EU, but the bloc's foreign policy chief has cautioned that their unwillingness to compromise is jeopardizing their prospects. The history between Serbia and Kosovo dates back to the 1998-99 war between Serbian forces and ethnic Albanian separatists in the then-province of Kosovo. The conflict led to thousands of casualties, predominantly ethnic Albanians, until a NATO intervention forced Serbian forces to retreat. Kosovo declared independence in 2008, a move that Belgrade has yet to recognize.
