The Montenegrin banking system has the capacity to absorb shocks, lend to the economy and protect citizens' deposits in times of global uncertainty, announced the Governor of the Central Bank of Montenegro (CBCG), Irena Radović, adding that the institution remains committed to providing strong institutional and regulatory support for the stability of the financial system.
At the annual press conference of the Central Bank of Montenegro, where key results achieved this year were presented, with a review of priorities and plans for the coming period, she said that only stable, capitalized and liquid banks can support the population and the economy and contribute to the resilience of the Montenegrin economy.
"At the end of November, the banking sector has very strong indicators. Bank assets reached 7,7 billion euros, bank capital is at the level of one billion euros, and we also have strong growth in credit activity," said Radović.
Non-performing loans are at a historic low of 2,78 percent.
She pointed out that, thanks to consistent supervision and the implementation of adequate supervisory and macroprudential measures, stability, high liquidity and strong capitalization have been improved, and that the confidence of citizens and the economy is reflected in the growth of key balance sheet positions - assets, loans, capital and deposits.
According to Radović, the average weighted effective interest rate on newly approved loans to citizens has decreased compared to the moment she took over as governor, from 8,79 to 6,79 percent.
"When it comes to interest rates for the economy, when we look at the last three years, we see a downward trend from 5,7 percent to 5,2 percent. That is still high, but taking into account the current circumstances and uncertainties, it is comparable to a significant number of EU countries," Radović believes.
As she said, the Central Bank of Montenegro carried out 40 direct inspections and imposed 24 punitive measures in the areas of banking operations, prevention of money laundering and terrorist financing, and consumer protection this year.
Radović pointed out that this year saw the most significant improvement in payment transactions since the establishment of the domestic payment system in 2005.
The CBCG payment system is fully compliant with the ISO 20022 international payments standard, which, along with the introduction of online clearing and new functionalities, has brought faster, safer and more precise transaction processing.
Since October 7 this year, Montenegro has been operationally part of the SEPA zone, which has made a major step towards bringing our country closer to the EU, and citizens and businesses have been enabled to make safer, faster and cheaper payments with 40 European countries.
Before the introduction of the SEPA system, the average fee for a SWIFT transaction was 73,4 euros.
"Data for the first two months of SEPA implementation show that the average fee for SEPA transactions carried out electronically is 2,24 euros for citizens, or 6,4 euros for businesses," said Radović.
The working hours of payment systems have been extended to 20 hours, including weekends and holidays, which means 118 additional working days per year.
Fees in the national payment system have been halved, with the abolition of previously applicable higher fees for afternoon transactions and the obligation for banks to pass on the effects of reduced costs to their customers.
Radović said that they noticed that citizens and business people have not yet fully oriented themselves towards digital channels.
"So there is still a significant number of business people and citizens who use over-the-counter channels that are twice as expensive, and what we will do in the coming period is to provide support to citizens and businesses with the aim of additional financial education so that they can use their mobile phones and computers as much as possible and make electronic payments, so that the SEPA effect is even more significant," emphasized Radović.
In cooperation with the Bank of Italy, the European Central Bank (ECB) and central banks in the region, the Central Bank of Montenegro continues the implementation of the TIPS Clone project, which establishes a national instant payment system.
The system will be launched in July next year and will enable transactions to be executed in real time, 24 hours a day, seven days a week, throughout the year.
The total economic effects of the payments reforms, which relate to both SEPA and TIPS Clone, are estimated at 160 million euros per year.
This year, intensive activities were carried out to fully harmonize the domestic regulatory framework with the EU acquis. Eight laws and dozens of by-laws regulating banking operations were finalized, which are fully aligned with the relevant EU directives, some of which will be implemented in the member states only next year.
"With this, the Central Bank of Montenegro has fulfilled all its obligations for the temporary closure of negotiation chapters 4 - Free Movement of Capital and 9 - Financial Services, while the consistent application of the new rules will further strengthen the resilience and stability of the banking system," said Radović.
The Central Bank of Montenegro continued to improve the protection of financial service users this year.
The new Consumer Credit Law, which has been in effect since November this year, sets the highest permitted effective interest rate on consumer loans and abolishes fees for processing housing loans and their early repayment.
A comprehensive survey on customer satisfaction with banking services is also underway, with the aim of further improving the quality, accessibility and transparency of services in the banking sector.
It was emphasized that the Central Bank of Montenegro is a financially independent institution that is not financed from the state budget but covers all its costs from its own revenues, which it predominantly generates by managing international reserves and providing services to the banking and financial sector.
The Central Bank of Montenegro paid 4,9 million euros into the state budget last year, and this year it will pay over seven million.
At the same time, the CBCG remains strongly committed to the digitalization and modernization of its internal processes, and is actively working on the implementation of solutions based on artificial intelligence in order to increase the efficiency, quality and resilience of the institution's work.
"With a clear vision of an independent, modern, innovative and transparent central bank that acts in the interest of citizens and the economy, we continue to build an environment in which the financial system is the pillar of Montenegro's sustainable development," concluded Radović.
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