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Euro Foreign Exchange Reference Rates as at: 17.12.2014.
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Reserve requirement

According to the Article 18 of the Central Bank of Montenegro Law (“Official Gazette of Montenegro“ no. 40/10, 46/10 and 06/13) and based on the provisions of the Decision on Bank Reserve Requirement to be held with the Central Bank of Montenegro (“Official Gazette of Montenegro“ no. 35/11, 61/12 and 57/13), the Central Bank of Montenegro prescribed the obligation for the banks to calculate, allocate and maintain reserve requirement by applying the ratio of 9.5% on the portion of base comprising of sight deposits and deposits with maturity up to one year, while ratio of 8.5% shall be applied on the portion of base comprising of deposits with maturity over one year. The ratio of 9.5% shall be applied on deposits with maturity over one year which have clause on possibility of taking off the deposit in the period shorter than one year.

The banks shall calculate and submit to the Central Bank the reports in the prescribed forms ObR, ObR-p, ObR-d1 and ObR-d2 on a weekly basis. Depositing into or withdrawing from the reserve requirement account in the country or the CBM accounts abroad shall be performed on Wednesdays, and in the form of Government Treasury bills issued by Montenegro. As of 1 January 2014, and in accordance with the Decision on the Amendments to the Decision on Bank Reserve Requirement to be held with the Central Bank of Montenegro (“Official Gazette of Montenegro“ no. 57/13), the Bank may allocate up to 30% of reserve requirement and maintain in form of Treasury bills issued by Montenegro, with maturity of up to 182 days, and up to 13% of reserve requirement with maturity of up to 91 days.

The Central Bank shall pay interest to the banks on 7% of the total allocated bank reserve requirement on a monthly basis, until the eighth day in a month for the previous month, at EONIA (Euro OverNight Index Average) rate minus 10 basis points annually, provided that the rate could not be less than zero.

The banks may use up to 50% of their reserve requirement deposits interest-free to maintain their daily liquidity, provided that they return the used amount on the same day.

If the bank fails to return the used amount of reserve requirement on the same day and on the amount of the difference between the prescribed and less allocated reserve requirement stemming from the wrong calculation or it fails to allocate reserve requirement by the defined deadline, it shall pay remuneration as per rate established in the special Central Bank regulation.

Calculated and allocated reserve requirement funds of the banks with the Central Bank as at 30 November 2014 amounted to EUR 210,8 million, out of which 39,6% was deposited in the reserve requirement account in the country, 49,9% in the CBM accounts abroad and 20,5% in the form of Government T-bills.

The average amount of total deposits by banks amounted to EUR 2.258,6 million at end-November 2014, which was EUR 13,1 million more than the average amount of deposits at end-October 2014. Of overall deposits, sight deposits make 45,2% while time deposits make 54,8%.

 

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Created by Božo Cvetkovski