Clearing of Payments in Foreign Exchange

The CBCG and the National Bank of Serbia (NBS) concluded the Agreement on Clearing of Payments in Foreign Exchange in September 2007, aiming to establish a more efficient system enabling direct payment operations between individuals and legal entities from Montenegro and the Republic of Serbia. The CBCG and the Central Bank of Bosnia and Herzegovina (CBBH) signed the Bilateral Agreement the same year. 

The Agreement on Clearing of Payments in Foreign Exchange includes international payments, transfers and collections for current and capital transactions on behalf of bank clients in Montenegro and is carried out solely in euros. Under the agreements, the NBS is the operator of the clearing of payments in foreign exchange.

Central banks that signed the Agreement and commercial banks that conclude an agreement with the respective country's central bank on participating in the clearing of payments in foreign exchange will participate in the international payments clearing. The central bank informs the clearing operator about the limits - the amount of funds available to execute orders in the clearing on a specific clearing day.

Under the signed agreements, the NBS performs clearing as a multilateral net settlement and informs the central banks of the aggregate net positions from the clearing and the net positions of the banks from their country. After that, according to the Agreement provisions, central banks inform the clearing operator of their consent to settle the net positions.

The central bank's aggregate net position is the difference between the received and executed payments of all participants who have concluded agreements with the domiciled central bank on participation in the clearing.

The net position of the participant - bank in the clearing at a specific moment is the difference between received and executed payments for that participant, counting from the clearing cycle' beginning until that moment.

Under the Agreement, aggregate net positions are paid between central banks through a specific (dedicated) account with first-class international banks. The parties to the Agreement agree that the payment between the central banks based on aggregate net positions is made through an account with Deutsche Bank AG.

This system's main advantage to its participants is the ability to make transactions for their clients - households and the corporate sector - on the same day for orders sent by 2 p.m.