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28/12/2010

The sixth meeting of the new Council of the Central Bank of Montenegro (CBM) was held on 27 December 2010. It was chaired by the CBM Governor, Mr. Radoje Žugić, MSc.

The Financial Plan of the Central Bank of Montenegro for 2011 was adopted at the meeting. The Plan envisages 9.744 million € of total revenues, which is 0.4% less than the expected revenues in 2010. Expenditures are planned to the amount of 9.628 million € or 0.1% less than in the current year, whereas 0.146 million € are planned as current reserves which allocation is to be determined by the CBM Council.

The Council also adopted the Governor’s Report. The Report states that bank lending continues trending downward, yet deposits showed an uptrend in November. Total assets of banks are on a decrease, but if observed by individual banks, eight record an increase and three banks a decline in their assets. The Report presents detailed activities of every individual organisation unit, as well as the balance sheet and the profit and loss statement of the CBM in the first eleven months of 2010. In addition, the Report contains the most important conclusions from the meetings of the CBM and the IMF mission that visited Montenegro in November this year.

Pursuant to its powers granted under the Central Bank of Montenegro Law and the Banking Law, the CBM adopted the Decision on Detailed Requirements for Members of the Board of Directors in Banks. A candidate for the Board of Directors must have a recognized personal reputation, professional qualifications, capabilities and experience in managing a bank. The Decision prescribes detailed manners of establishing the fulfilment of the aforementioned requirements.

In addition, the Council adopted the Chief Economist’s 2010 3Q Report. The Report states that the Montenegrin economy exited the recession at the end of the third quarter of the current year. Growth was recorded in industry, forestry, tourism, certain transportation segments and trade, whereas construction is still in the crisis. It is estimated that period-on-period real GDP growth in the first nine months of the current year was some 2%. Inflation remains low, the balance of payments has partially improved (as the result of crisis adjustments, rather than improved competitiveness), while the capital market is still in the crisis. The banking system is stable and highly liquid, and what is also important is that the system was recapitalized to the amount of 73 million € in 2010. 

The Council also adopted the Decision on Labour Rights of the Banking Ombudsman, thus completing the regulatory framework necessary to ensure uninterrupted operations of the banking ombudsman.