The Law Amending the Central Bank of Montenegro Law Adopted
29/12/2023
The Law Amending the Central Bank of Montenegro Law, which the Parliament of Montenegro adopted today, fully aligns the current Central Bank of Montenegro Law with the acquis communautaire and the recommendations of the International Monetary Fund (IMF) to strengthen the CBCG’s institutional, functional, personal and financial independence.
The CBCG Governor, Irena Radović, PhD, expressed institutional and personal readiness for additional improvement and intensification of cooperation with Montenegro’s Government and Parliament and the other Montenegrin institutions to create new values and a better business environment in the country. She underlined that the Law adopted today shows significant progress in Montenegro’s obligations in the negotiation process with the EU and will ensure additional CBCG’s independence, which is the standard on which the IMF, the World Bank and the ECB insist.
“The CBCG’s independence is a condition for a better credit rating, better borrowing conditions for Montenegro, and better and more prosperous life for Montenegrin citizens, and its whole economy,” Governor Radović noted.
One of the most significant novelties is harmonising with the Law on Credit Institutions and the Law on Resolution of Credit Institutions. The new Law provides that the CBCG may grant loans only to solvent credit institutions at interest rates higher than the prevailing market rates and with appropriate collaterals.
Very significant novelties also include more apparent legal distinction and preventing the overlapping of the competencies of the Council of the Central Bank as a management function and the CBCG Governor as a management function. On the other hand, it proposes to establish a new body – the Advisory Board, which will provide recommendations to external members and other Council members and support their work to strengthen further the CBCG’s independence and professionalise the management structure.
The new Law provides a different treatment of unrealised revaluation losses, which will create the conditions to pay the appropriate amount of funds into the Budget of Montenegro based on the CBCG’s profit for 2022 and the profit from the current year.
The amendments to the Law provide different conditions for appointing Council members. Inter alia, they will also need at least ten years of work experience in economics, banking, finance, or Law. The new Law provides that the Council will have an unchanged number of members after joining the EU and the European Monetary Union – the Governor, three Vice-Governors and four members who are not CBCG employees.