Meeting with a view to reviewing the effects of financial restructuring of loans held with banks
07/09/2017
The meeting of the Governor of the Central Bank of Montenegro, Mr Radoje Žugić, PhD, and his associates with the representatives of banks operating in Montenegro was held today, initiated by the CBCG in order to review the effects of loan restructuring in accordance with the recently adopted Law on Amendments to the Law on Voluntary Financial Restructuring of Debts towards Financial Institutions.
Once the meeting was opened, Governor Žugić reminded that the amendments to the Law were prepared with the intention to further improve the process of financial restructuring, and that additional incentives for creditors and debtors were introduced. "Although the share of non-performing loans in total loans has recorded a continuous decline in the past few years and currently stands at 8.2%, there is scope for further improvement of this process, which would free up the potential for growth in credit activity and decrease in interest rates, thus providing even stronger support to the real sector", said Governor Žugić.
As the meeting continued, the representatives of banks presented information on the results of the activities undertaken for the loan restructuring plan as of the entry into force of the Law on 22 June 2017. The commitment to resolving the NPLs was highlighted and banks indicated that in the forthcoming period they can expect stronger effects of the implementation of the Law.
After the representatives of the banks made their presentations, the Governor pointed out that this issue, given the limited validity of the Law (until May next year), will be in the CBCG focus in the forthcoming period, with the announcement that the CBCG will contribute, through the public campaign, to raising the borrower's awareness of the benefits of restructuring of loans according to this model. In addition, it was emphasized that the CBCG will continue to strengthen the supervision over the implementation of the commitments of banks arising from the Law, thus, in the event that a justified need arises, it will introduce an increased provisions instrument.