CBCG Council Adopts Several Bylaws
The Central Bank of Montenegro (CBCG) adopted several bylaws at today's meeting.
The Council adopted the Decision on Interim Measures to Mitigate Negative Impact of the Communicable Disease COVID-19 Epidemic on the Financial System, which will apply from 1 January 2022. Following the current epidemiological situation and economic trends, the Decision will revise the current CBCG measures to reduce the negative pandemic consequences.
The measure enabling the restructuring of loans under this Decision to loan beneficiaries - individuals who lost their employment, had reduced wages by more than 10%, or their net wages were not paid more than three months before applying the Decision, as a result of the adverse COVID 19 impact, shall remain in force. Until further notice, the measure prohibiting the payment of dividends to bank shareholders (except in the form of shares) shall also remain in force.
The previously adopted macroprudential measure on the targeted restriction on the unsecured cash loans to individuals growth expires on 31 December 2021. Therefore, the Council adopted the Decision on Macroprudential Measures Related to Retail Loans Granted by Credit Institutions today. The Decision extends the application of the mentioned macroprudential measure for another year. Previously, a trend analysis of unsecured cash loans was made. The analysis determined the need to extend its application with some corrections. Besides the existing criteria, the Decision also introduces a qualitative criterion. The criterion allows banks that implement good practices of granting unsecured cash loans to individuals, i.e. have a low share of non-performing loans in this segment of loans (3.5%), to approve unsecured cash loans or contract the repayment period extension from the primary contract with deadlines longer by two years compared to the deadlines determined by the Decision (eight years for loans with an initially determined repayment period of six years, or ten years for loans with an initially determined repayment period of eight years).
To meet the obligations arising from the Law on Credit Institutions, which application starts on 1 January 2022, the Council adopted the Decision on Calculating and Disclosing the Effective Interest Rate on Loans and Deposits and the Decision on the Content and Manner of Keeping the Register of Financial Providers.