It is headquartered in Tirana, with five branches in Shkodër, Elbasan, Gjirokastër, Korçë and Lushnjë, and a Research and Training Center in Berat.

In the first few years following Albania's declaration of independence on 28 December 1912, the fledgling country lacked a central bank, and several attempts to create one were unsuccessful.

The backlash against that foreign domination triggered a revolt in mid-May 1914 against the regime nominally led by Wilhelm von Wied and practically by strongman Essad Toptani.

With involvement of British and especially Italian diplomats, a convention was signed on 15 March 1925 between the Albanian authorities represented by Foreign Minister Mufid Libohova and the Italian bank Credito Italiano led by Mario Alberti [it], setting the framework for the creation of the National Bank of Albania, with seat in Rome and operations in Albania.

The text was then ratified by the Albanian legislature on 22 June 1925, allowing the National Bank of Albania to be formally established in Rome on 2 September 1925.

[7]: 1 The convention of March 1925 had established that the National Bank's initial share capital would be held by a mix of Italian, Albanian, Yugoslav, Swiss and Belgian partners.

The stated intent was that Albanian interests would control half of the capital of 12.5 million gold francs, but they turned out to not have the capacity or willingness for that.

This setup was inspired by the precedent of the State Bank of Morocco, whose central functions were split between Paris and Tangier.

[5]: 150 Under the German occupation of Albania from September 1943, the National Bank kept operating but under increasingly difficult conditions, and was forced by the occupiers to transfer its gold reserves from Rome to Berlin.

[9]: 5  The State Bank initially operated under a strict monobank system, with an internal department handling retail savings created in 1949.

[6]: 61 Shortly after the fall of communism in Albania in December 1990, the country started a profound reform of its financial sector.

As acting currency manager, the Bank of Albania pursues to reach equilibrium between two extremes, which is to promote economic growth by maintaining price stability.

[15] The Bank of Albania is committed to achieving and maintaining annual inflation at 3.0%, with a tolerance band of +/- 1 percentage point.

The minimum reserve requirements serve as a tool targeting at regulating the banking system liquidity and stabilizing the money market interest rates.

On 10 February 2010, the Bank of Albania inaugurated its training and research center in Berat, in a building originally erected in the 1970s and remodeled in the late 2000s to better fit with the historic city's environment.

[23] In June 2010, the bank also purchased the former Hotel Dajti, a prominent building in the center of Tirana not very far from its own head office, to host functions open to stakeholders and the public.

[24] In the early 2010s, the Tirana head office building itself was renovated and expanded on a design by the Italian firm Petreschi Architects.