General Secretary of the Banking Association of Montenegro (UBCG), Bratislav Pejaković, has stated that there is no fear among bankers regarding the establishment of a development bank.
“There is no fear; on the contrary, we will gain a specialized institution such as a development bank. The government has recognized that it can better articulate certain demands and direct funds through a development bank rather than through the existing fund. Legally, we expect it to be shaped in accordance with international standards, and its operations must certainly follow best practices,” Pejaković said in a statement to the media.
He added that the development bank will also serve as an export credit agency, which, he said, is currently missing from our economic system.
“Every bank, including this one, must follow market operations. Where it places funds below market prices, the government will compensate a portion of the interest rate to the bank through subsidies, which is often overlooked in comments,” Pejaković said.
Positive and negative examples
According to Pejaković, the region has positive examples of development bank operations, as well as a negative example with the Development Bank of Vojvodina.
“We need to learn from both positive and negative experiences to avoid repeating mistakes, which should not occur with adequate supervision. Good cooperation with international financial institutions, the European Commission, and the Central Bank will ensure the bank is established on a solid foundation. The Banking Association, after reviewing the draft through the Committee on Legal Issues, highlighted the operational standards of such banks in the EU, with examples from Croatia and Slovenia, which correspond to the views of the Central Bank of Montenegro (CBCG) and forwarded them to all parliamentary clubs on August 12, as there was no public debate to inform the profession in a timely manner,” Pejaković stated.
Montenegrin President Jakov Milatović returned the law on the Development Bank of Montenegro to the parliament for reconsideration on August 23, which was adopted by the Assembly on August 17.
Parliament Speaker Andrija Mandić has scheduled an extraordinary parliamentary session for September 12, during which lawmakers will decide again on this legislative proposal.
Consumer Credit Law
On Monday, it was announced that Minister of Economic Development Nik Đeljošaj has forwarded the proposed Consumer Credit Law to the government, which, he announced, will be adopted this week and sent to the parliamentary procedure.
Đeljošaj said that the new Consumer Credit Law brings significant benefits for consumers in the context of the growing financial market and the offer of new credit instruments, in line with EU legal standards.
Key benefits for consumers will include, among other things, the abolition of fees for processing and early repayment of housing loans, interest rate limits, creditworthiness assessment, protection in case of difficulties, and better information.
“The abolition of fees for processing and early repayment of housing loans will directly improve the financial position of consumers. Removing these costs is an important step toward enhancing the standard of living for consumers, as it reduces unnecessary financial burdens that were previously associated with borrowing and were deemed unfair to consumers,” Đeljošaj said.
One of the most important benefits for consumers arises from introducing a maximum allowed effective interest rate on consumer loans, at the initiative of the Central Bank (CBCG).
This law, according to Đeljošaj, implements Directive 2014/17 on housing loans, which provides greater protection in many areas. The proposer decided, to the extent possible, to apply the solutions provided by this directive to all consumer credit agreements, not just housing consumer loans, thus offering consumers in Montenegro a significantly higher level of protection than previously.
