Commercial banks in Montenegro have contributed a total of €7.51 million to the Resolution Fund since its establishment, according to the Central Bank of Montenegro (CBCG). The banking system remains well-capitalized and liquid, with no current need to use funds from the Resolution Fund.
The Resolution Fund is designed to support banks facing financial difficulties. Its creation is mandated by the Law on Resolution of Credit Institutions, which came into effect on January 1, 2022, after a delay due to pandemic-related challenges and asset quality reviews.
By law, the fund must accumulate an amount equivalent to at least 1% of guaranteed deposits over ten years, until July 31, 2031, with annual contributions from banks. For 2025, the CBCG calculated a contribution amounting to €2.26 million, which banks must pay by June 30.
The target fund size is linked to the total guaranteed deposits, which stood at €2.26 billion at the end of last year. Accordingly, the Resolution Fund should reach approximately €22.6 million by July 2031, although this amount may change if the total guaranteed deposits fluctuate.
The fund can only be used if a bank is assessed to be failing or likely to fail, and standard resolution procedures such as bankruptcy would threaten financial stability or public interest. It acts as a secondary safeguard within a broader framework that includes strong supervision and preventive measures, such as resolution plans prepared for each bank.
Currently, Montenegro’s banking system is financially strong and highly liquid, so there is no immediate need to activate the Resolution Fund. However, if the financial condition of one or more banks worsens, the CBCG will consider using the fund to maintain stability and protect the public interest.
Any use of the fund depends on legal criteria, including demonstrating that resolution is in the public interest, no alternative measures are available, and that the fund’s resources can support appropriate resolution tools such as debt reduction, conversion, asset sales, or transfer to temporary institutions.
