76th Meeting of the Central Bank Council


29/10/2020

The Council of the Central Bank of Montenegro held its 76th meeting, chaired by the Governor, Mr Radoje Žugić.


At today’s meeting, the Council discussed and adopted the Report on Business Operations and Policy Implementation of the Central Bank of Montenegro for August 2020. The Report stated that the CBCG conducted all its activities in accordance with the planned obligations.


The Council adopted the Decision amending the Decision on Macroprudential Measures related to Retail Banking Loans. The amendments include the introduction of a loan insurance policy, as additional collateral for loan security, in addition to collateral recognised under the applicable Decision from 2019. The condition is that the policy is issued by insurance companies with a registered office in Montenegro. At the same time, the CBCG will assess the individual policies’ acceptability bearing in mind risk coverage to which banks are exposed.


At today’s meeting, the Council adopted the Decision amending the Decision on Payment System Reporting to the Central Bank of Montenegro. To monitor payment statistics in more details, the amendments oblige payment service providers and/or electronic money issuers to submit additional data in the reports submitted to the CBCG.


Today, the Council also discussed Quarterly reports on the financial service providers’ operations as of 30 June 2020 that include the Investment and Development Fund, microcredit financial institutions, leasing, and factoring companies. The report pointed out that these markets were characterised by a slight liquid assets and loans growth in Q2 2020, and the main negative trend was related to the increase in past due loans.


The Council was presented with the latest CBCG projections, which indicate that the GDP decline rate this year could be around 17%. It was emphasised that the high uncertainty caused by the COVID-19 virus pandemic, the unavailability of significant data, and the absence of previous experience of this kind resulted in a relatively high uncertainty concerning the projection. The projection will be subject to continuous updating with new data.


The Council members discussed the Report on the bankruptcy proceedings in IBM Bank for the period from 1 January to 31 August 2020. The Bankruptcy Administrator of IBM Bank presented the activities so far, which were mainly related to the liquidation of assets and the payment of obligations to creditors. He announced that, in the period from instigating the bankruptcy in this bank (4 January 2019) to 31 August 2020, the payment to the Deposit Protection Fund amounted to 17.5 million euros or 80% of the total liability to the Fund.


At today’s meeting, the Council also discussed other issues within its competence.