(Published in Monitorul Oficial al României, Part I, No.582/30 June 2004)

The National Bank of Romania (NBR) is the country's central bank, having legal personality. It is an independent public institution headquartered in Bucharest and may have branches and agencies in Bucharest and within the territory of Romania.

The primary objective of the NBR is to ensure and maintain price stability. The main tasks of the NBR are the following:

1. to define and implement the monetary policy and the exchange rate policy;
2. to conduct the authorisation, regulation and prudential supervision of credit institutions and to promote and oversee the smooth operation of payment systems with a view to ensuring financial stability;
3. to issue notes and coins to be used as legal tender on the territory of Romania;
4. to set the exchange rate regime and to supervise its observance;
5. to manage the official reserves of Romania.

Without prejudice to its primary objective of ensuring and maintaining price stability, the NBR supports the general economic policy of the Government.

In carrying out their tasks, the NBR staff and the members of its decision-making bodies must not seek or take instructions from public authorities or from any other institution or authority.

In conducting the monetary policy, the NBR staff members make use of procedures and instruments specific to open market operations and lending to credit institutions, as well as of the required reserve mechanism. The purchase by the NBR of debt securities issued by the Government, national and local public authorities, régies autonomes, national corporations, national companies and other majority state-owned companies in the primary market is prohibited. The NBR may perform, in the secondary market, reverse operations, outright purchases/sales or may grant loans collateralised by the pledge of claims against or securities of the Government, national and local public authorities, régies autonomes, national corporations, national companies and other majority state-owned companies, credit institutions or other legal entities, may conduct foreign exchange swaps, issue certificates of deposit and collect deposits from credit institutions, under the terms and conditions it deems appropriate for achieving its monetary policy objectives.

Overdraft facilities or any other type of credit facility with the NBR in favour of the Government, national and local public authorities, régies autonomes, national corporations, national companies and other majority state-owned companies are prohibited as well.

The NBR is the sole institution authorised to issue currency in the form of notes and coins as legal tender in Romania. The domestic currency is the 'Leu', with its fractional unit, the 'Ban'.

In accordance with its monetary and exchange rate policies, the NBR may grant loans with maturities no longer than 90 days to credit institutions, against collateral consisting of, but not limited to:

1. government securities from public issues, by their remittance into the NBR portfolio, or
2. deposits with the NBR or with other legal entities agreed by the NBR.

The NBR sets the terms and conditions, as well as the costs of lending, opens and runs accounts of credit institutions, State Treasury, clearing houses and other resident or non-resident entities, as provided by the regulations issued by the NBR.

The NBR is managed by a Board of Directors consisting of nine members, and the executive management is exerted by the Governor, the Senior Deputy Governor, and two Deputy Governors. Board members are appointed by Parliament, which also nominates the executive management, for a five-year tenure that may be renewed. In case the Board becomes incomplete, the vacancies must be filled for the respective office, for the entire period of the tenure. A member of the Board may be recalled from office by Parliament, if s/he no longer fulfils the conditions required for the performance of her/his duties or if s/he has been found guilty of serious misconduct.

The NBR's financial statements are prepared in accordance with the accounting principles and rules established by the international accounting standards, applicable to central banks, acknowledged by the European Central Bank, and must include the following: balance sheet, profit and loss account and the notes on the accounts. They must be audited by financial auditors, legal entities authorised by the Financial Auditors Chamber in Romania, selected by the NBR Board on an auction basis.

On 31 December 2004, the current capital of the NBR (ROL 100 billion) was raised to ROL 300 billion, being fully owned by Government.

The NBR is authorised to collect raw statistical data and information needed to carry out its statutory tasks by ensuring protection of data referring to individual subjects - either legal entities or individuals - obtained directly or indirectly, from administrative or other sources.

The Board members and the NBR staff members are bound to observe professional secrecy regarding any information not intended for disclosure, which they acquired in the performance of their duties, and may not use this information for their personal benefit, any infringement being punished by law. They are bound by professional secrecy requirements even after their duties have ceased, any infringement being punished by law.

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