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17/06/2025

Irena Radović, CBCG Governor for NIN: The Reforms We Are Implementing Are Not Merely Technical Adjustments

In the modern context of accelerated digitalisation, geopolitical fragmentation, and strategic redefining of the European financial space, Montenegro has opted for a proactive and reform-oriented approach. Instead of passive adaptation, our institutions have recognised the need for strategic positioning within the European payment system, through deep regulatory, technical, and infrastructural reforms that ensure interoperability, efficiency, and confidence, says Irena Radović, Governor of the Central Bank of Montenegro, in a contributed article for NIN Magazine.

Payment system modernisation has been established as a key pillar of economic resilience and accelerated integration into the EU Single Market. The reforms we are implementing are not mere technical adjustments, but a structural expression of the state's strategic orientation towards a more stable, inclusive, and digitally enabled economic model, fully aligned with European standards.

Montenegro is now on the verge of full-fledged operational participation in the Single Euro Payments Area (SEPA), having become a full member on 21 November 2024. All key regulatory and technical criteria have been met, and all 11 licensed banks in Montenegro will be connected to the SEPA market on 6 October 2025. Thus, Montenegro is no longer on the periphery, but is becoming part of the European financial space with equal rules and opportunities.

SEPA enables citizens and businesses to send and receive euro payments across Europe under the same conditions as domestic transfers – quickly, securely, and at significantly lower costs. Previous fees that reached up to 73 euros per transaction will be replaced with market standards amounting to just a few euros. Estimated annual savings exceed 10 million euros, with total economic effects reaching 38 million euros per year. Even more importantly – SEPA serves as a bridge toward deeper integration into infrastructures such as TARGET and TIPS, and thus toward full EU membership.

Parallel to the SEPA reform, the CBCG is developing its own instant payment platform, TIPS Clone. This regional initiative, in cooperation with the Banca d’Italia and supported by the World Bank, enables interbank payments to be executed in just a few seconds, 24/7. The launch is planned for 20 July 2026, with expected effects including accelerated financial flows in the economy, digitisation of public payments, and support for inclusive growth.

In May 2025, the new national payment system RTS/X was launched, incorporating online clearing and the implementation of the ISO 20022 standard. This modernisation enables messages of up to 1,000 euros to be immediately and irrevocably announced to the payment recipient, significantly improving liquidity in smaller transactions. For citizens, this means faster access to funds, while for businesses, it allows more efficient management of liabilities and working capital.

ISO 20022 also brings additional benefits through more structured data exchange, increased automation, and easier integration with accounting systems, further aligning domestic processes with key European payment infrastructures.

The combined effects of these reforms – SEPA, TIPS Clone, and RTS/X – reach up to 160 million euros annually, or 2.3% of GDP. In the long term, projections show these changes could lead to an increase in per capita income of over 2,500 euros in the next ten years and raise convergence with the EU from the current 50% to over 61% of the average European income.

All these reforms – SEPA, TIPS Clone, and RTS/X – have a broader dimension: they are key instruments for accelerating negotiations with the EU, particularly within Chapters 4 (Free Movement of Capital), 9 (Financial Services), and 17 (Economic and Monetary Policy). In this regard, the CBCG coordinated the preparation and submission of 16 laws necessary for closing these chapters, including new provisions in payment services, bank resolution, and alignment with capital market directives.

In doing so, the CBCG is not only strengthening institutional capacity but also embedding European infrastructure within Montenegro. As the first country in the region to join SEPA, with an advanced instant payment project and full regulatory alignment with the EU framework, Montenegro affirms its status as a leader in European integration in the financial sector.

At a time when Europe is striving for stronger strategic autonomy and deeper fiscal and market integration, Montenegro is not standing on the sidelines. On the contrary, through reforms, it demonstrates readiness, capability, and the will to be part of European solutions, fully equally and responsibly.

The CBCG does not see digital transformation of the payment system as a technical obligation, but as a strategic tool for improving the economic environment, enhancing competitiveness, and strengthening institutional credibility. These reforms testify to our readiness to be part of European solutions – not challenges – in the fields of finance, transparency, and digitisation.

In this way, the CBCG is not waiting for the European future of Montenegro – it is actively building it.