The topic of this thesis is the monetary system and its impact on the economy in the Republic of Croatia, with a special focus on the banking sector in the Republic of Croatia. The monetary system includes everything related to the movement of money, and it is in accordance with the provisions of the monetary policy, which is determined and defined depending on market movements by the central bank - the Croatian National Bank. The central monetary system includes the CNB and commercial banks that do business with corporations, small and medium-sized entrepreneurs, and citizens. By doing so, we will distinguish between banks for citizens and investment banks. Banks also accept various types of deposits from citizens, especially from their customers, including savings account deposits, recurring account deposits and term deposits. These deposits are returned when requested by the user or after a certain period of time. Banks also approve loans and advances in various forms, such as cash loans, housing loans, etc. They also provide payday loans and term loans to all types of clients with appropriate insurance. Her jobs can be passive, active, neutral, her own and jobs related to the function of state administration. That is why the balance sheet is the most important source of information because it represents a periodic financial and property document, and in addition to general information about the bank, it also offers real information about the bank's liquidity and solvency. The banking system mainly consists of several financial institutions, including central and commercial banks, savings and other financial institutions. As for the foreign exchange market, domestic demand for foreign currency and foreign demand for domestic currency take place on it, and banks, together with authorized money changers, whose operations are regulated by the CNB and supervised by the Ministry of Finance, mediate these demands.