President of Montenegro, Jakov Milatović, has signed the Law on the Development Bank, which the Assembly adopted after being sent back for reconsideration. However, he reiterated numerous legal and institutional inconsistencies in this legislative act.
Despite the reasons presented and the European Union Delegation’s stance that the law’s reconsideration was an opportunity for the Assembly to ensure its full compliance with European legal frameworks and best international standards, the Montenegrin Parliament has again adopted the act in unchanged form.
As the public is already aware, the president returned the Law to the Montenegrin Parliament for reconsideration on August 23, 2024, explaining that it was yet another act proposed to the Assembly without prior public consultation.
This way, experts and the interested public, as well as important actors in the financial system such as the Central Bank of Montenegro, the Association of Banks, and international financial institutions, were excluded from the preparation process.
President Milatović emphasized that the lack of transparency in the law’s preparation, along with significant legal and institutional shortcomings, poses a considerable problem.
He pointed out that, in addition to the lack of transparency, there are key elements within the law that require further attention and revision.
He noted the identification of the Development Bank with commercial banks, which allows the bank to accept deposits and conduct payment transactions while simultaneously being excluded from the framework of the law regulating the establishment, operation and oversight of credit institutions. This represents a serious deviation from European legal standards that ensure financial system stability.
Moreover, the President warned that the law insufficiently defines other important issues, such as the public nature of the Development Bank’s operations, the role of the Central Bank in monitoring its activities and reporting, as well as the appointment of members of the governing bodies of this institution. The inadequate level of oversight by the Central Bank of Montenegro as a regulator over the Development Bank does not contribute to transparency or compliance with domestic and European regulations.
The President believes that establishing a Development Bank in Montenegro is necessary but should be done in accordance with international standards, rather than through a non-transparent process and a legislative solution that is not aligned with the best European practices.
Given all of the above, this defined legal framework could jeopardize the financial stability and functionality of the bank, potentially leading to serious consequences for the economy and citizens.
