Pursuant to the National SEPA Migration Plan, the Croatian National Bank (CNB) has carried out all preparatory activities for the establishment and connection of the Croatian TARGET2-HR component to the TARGET2 payment system, with the foreseen start of operation on 1 February 2016. The European Central Bank has confirmed (Press Release of 18th January 2016) the connection of the TARGET2-HR component, which becomes the twenty-fifth component of the TARGET2 payment system. The participants in the TARGET2-HR component are the CNB and credit institutions that have signed the agreement on participation.
TARGET2 is a real-time gross settlement payment system in euro. The system consists of national components operated by the central banks of the EU member states. In technological terms, it is a centralised system with a single technological platform that offers the same level of service to all of its participants.
TARGET2-HR is the Croatian component of the TARGET2 system enabling the settlement of national and cross-border euro payment transactions on accounts of credit institutions – system participants.
The establishment of the TARGET2-HR component is one of the main steps in the implementation of the SEPA project in the Republic of Croatia launched in May 2014. The objectives of the project, among other things, include ensuring all prerequisites required for the alignment with Regulation (EU) No 260/2012 (SEPA regulation) and achieving a high degree of standardisation in the execution of national and cross-border payment transactions in euro in the Republic of Croatia. The above includes the setting up of an appropriate infrastructure, which in addition to TARGET2-HR also implies the future setting up of the Euro National Clearing System (EuroNCS) as the national payment system for the execution of retail payments in euro.
As part of the payment system infrastructure supporting the implementation of the SEPA project in the Republic of Croatia, the establishment of TARGET2-HR:
- ensures a single technological platform for the settlement of cleared euro payment transactions in compliance with Regulation (EU) No 260/2012 for all future participants in the EuroNCS,
- provides preconditions for the further development of payment services in the Republic of Croatia in compliance with European standards, and
- reduces the costs of processing of interbank euro payment transactions since banks, in addition to the current manner of payment transactions settlement via correspondent banking, will have the possibility of a faster and, in terms of price, a more acceptable manner of carrying out interbank euro payment transactions.
The CNB started the project for the establishment of TARGET2-HR in 2014. The project has covered the adjustment of the technological infrastructure of the CNB as the operator and the participants, the performance of all necessary testing and other preparatory activities for production operations, as well as the adoption of the regulatory framework, i.e. the Operating rules and the accompanying documents.