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Montenegro, deposits are growing, as is the gross social product

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Over five billion EUR were deposited in banks, or 890 million more than a year earlier. That data, as analyst Predrag Drecun comments for Radio Montenegro, means nothing. He points out that it is about frozen capital, the inert attitude of banks towards investors and projects that would not contribute to development. He suggests that the monetary authorities analyze the situation and adopt adequate measures in order to provide the economy with the necessary money.

Deposits are growing, as is the gross social product. Officially, both will exceed EUR 5 billion at the end of the previous year, according to current data. It would be a good circumstance, says Drecun for Radio Montenegro, if that balance was in the long run. However, as he states, such phenomena are becoming in our country that the monetary authority does not explain.

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– Instead of loans to the economy growing, loans to the population and non-residents are growing. Bank girls behave as they are allowed to do. In the end, these are private capital companies and a social function cannot be imposed on them, but that’s why there is a regulator who would have to use his policy, the reservation policy, for banks to give as many loans as possible to projects that are healthy – said Drecun.

The bottom line, he notes, Is that the banks to which the clients have entrusted money for safekeeping, place it.

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– We therefore, conditionally speaking, have a lot of “dead money”, because it is money that is not marketed. We have over a billion in Cash position, which is about 25% of the bank’s total cash flow, and when compared with the growth of deposits, this is a very worrying figure – the analyst stated.

It also indicates that the ratio of deposits and approved loans is bad. As much as 80% of deposits, he explains, are made up of loans. He reminds that fifteen years ago the situation was, as prescribed by economic theory, 1.1 euro of loans per euro of deposits.

– Back then, we had ten percent more loans than deposits. And that is a proper relationship, because in that case there is an expansion of investments, that is something to strive for. This is how banks become numb, they raise interest rates on given loans, because they do not invest the capital, the collected money – said Drecun.

That the banks are very cautious in approving debt is perhaps best shown by the fact that at the end of last year, the state provided 55 million of the planned 350 million, of which 16 million with interest of six to seven and a half percent in banks, the rest through the issuance of government bills, local media reported.

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