Montenegro’s financial system remains stable, with moderate risk levels, and both geopolitical and external risks are declining. The focus should now shift to monitoring cyclical trends, as concluded during a meeting of the Financial Stability Council.
The session, chaired by Central Bank Governor Irena Radović, who also heads the Council, reviewed the Financial Stability Report for the third quarter. It was noted that inflation has decreased to desired levels and the country’s finances remain stable, including a budget surplus and a slight improvement in Montenegro’s credit rating to B+.
The banking sector is stable, solvent, and liquid, with continued growth in deposits, which banks are increasingly redirecting into loans.
The meeting was attended by Council members, including Finance Minister Novica Vuković, Chairman of the Securities and Exchange Commission Željko Drinčić, and Chairman of the Insurance Supervision Agency Marko Ivanović. Also present, upon invitation from Radović, was the Director of the Deposit Protection Fund, Vojin Vlahović.
The Council emphasized the importance of Montenegro’s recent membership in the Single Euro Payments Area (SEPA) and discussed the upcoming tasks related to integrating Montenegrin banks into SEPA’s payment systems. Radović highlighted that the Central Bank (CBCG) is fully committed to coordinating this process.
A special team within CBCG has been formed to actively monitor the implementation of SEPA activities, providing full support to banks that have started technical preparations, including the establishment of new software solutions and procedures for processing transactions, as well as setting up adequate security protocols to ensure efficient and secure data exchange.
The CBCG has also secured technical assistance for banks, involving external experts specializing in SEPA payment schemes.
It was concluded that the key priorities for the successful implementation of SEPA in Montenegro are the urgent adoption of several laws and the establishment of a National Payment Committee. Efficient coordination among all involved parties was deemed crucial.
The meeting also discussed CBCG’s plans for the development of the domestic instant payments system. In cooperation with the Bank of Italy and the European Central Bank (ECB), activities have begun to implement a TIPS (Target Instant Payment Settlement) clone, based on the EU’s TIPS payment system.
For the realization of this project and other activities to modernize the payment system, the Ministry of Finance has approved borrowing of up to eight million EUR within Montenegro’s budget, which will be secured through a loan agreement with the World Bank (WB). This amount will be repaid by CBCG in predetermined tranches.
