The government held a telephone session today during which it approved the opinion of the Ministry of Finance regarding the draft Law on the Development Bank. The parliamentary debate on this law is expected to begin today.
In its official statement, the Ministry of Finance expressed its support for the proposed law, which was introduced into parliamentary procedure by members of the Europe Now Movement (PES).
The draft Law on the Development Bank of Montenegro outlines the establishment, activities, operations, organization and oversight of the Development Bank of Montenegro (hereinafter referred to as the Development Bank).
According to the draft law, the Development Bank will serve as a financial development institution for the state of Montenegro. It will be established as a legal entity in the form of a joint-stock company, with the primary goal of promoting and supporting the development of Montenegro’s economy. The Development Bank is expected to provide financial backing for accelerated economic growth, the expansion of micro, small, medium, and large enterprises, more balanced regional development, enhanced competitiveness and liquidity of businesses, export-oriented production and services, import substitution, infrastructure projects, water supply initiatives, wastewater treatment projects, environmental protection efforts and other projects of local, regional and national importance.
The state of Montenegro will unconditionally and irrevocably guarantee the obligations of the Development Bank on first demand, without the need for a separate guarantee, except in the case of deposits made with the Development Bank.
Additionally, the draft law stipulates that the Development Bank will be founded by the state of Montenegro, with the Government of Montenegro exercising the rights and duties of the founder. The establishment of the Development Bank will be achieved by transforming the Investment and Development Fund of Montenegro, with the founding capital of the Development Bank set at a minimum of 90 million euros, comprising capital transferred from the Investment and Development Fund of Montenegro A.D.
Article 9 of the draft law specifies the activities of the Development Bank, which include approving loans, performing factoring and other forms of receivables purchases, issuing guarantees, insuring the export of goods and services from Montenegro against non-market risks, accepting deposits, providing payment services in accordance with special regulations, and offering loans to support social entrepreneurship, self-employment, new investment cycles, and the development and strengthening of start-up businesses, among other activities.
The draft law also sets forth requirements for risk management, the establishment of management and internal control systems, capital requirements, operational limitations, client protection, accounting and auditing of financial statements, as well as the governance structure, financing, transparency of operations and reporting and oversight of the Development Bank’s activities by the Central Bank of Montenegro. These provisions are similar to those outlined in the Law on Credit Institutions.
