The Central Bank of Montenegro adopted the new Decision on Reserve Requirement for Banks to be held with the Central Bank of Montenegro (“Official Gazette of the Republic of Montenegro no.14/06), according to which banks calculate reserve requirement from April 2006.

 According to the Decision, the banks calculate reserve requirement on: sight deposits, term deposits with maturity, on the days for calculation of reserve requirement, less than 90 days and term deposits with maturity, on the days of calculation of reserve requirement, more than 90 days but less than one year.

 Exceptionally, the banks do not calculate reserve requirment on sight deposits recorded on Acc. 2300 (Sub accounts 2305-2318) – Sight Deposits from Banks and other Financial Institutions; Acc. 2305 – State-Owned Local Banks – Non Interest bearing; Acc. 2306 – State-Owned Local Banks – Interest bearing; Acc. 2307 – Privately-Owned Local Banks – Non Interest bearing; Acc. 2308 – Privately-Owned Local Banks – Interest bearing as determined in the Chart of Accounts for banks and term deposits with maturity over one year.

 The new decision prescribes different reserve ratios: 19% for sight deposits and term deposits with maturity, on the days for calculation of reserve requirement, less than 90 days; and 5% for term deposits with maturity, on the days for calculation of reserve requirement, more than 90 days but less than one year.

 The banks shall calculate and submit reports to the Central Bank of Montenegro on weekly basis, and depositing into or withdrawal from the reserve requirement accounts in the country or into the CBM accounts abroad is performed on Wednesdays and they may hold up to 10% of its reserve requirment by restricting Treasury bill issued by the Republic of Montenegro.

 The Central Bank shall pay interest to the banks, on 40% of  the bank reserve requirement deposited, at the rate of 1% per annum.

 The banks may use up to 50% of reserve requirement deposits without interest, to maintain their daily liquidity, if they return the used amount on the same day.

 If the bank fails to return the used amount of reserve requirement on the same day, it shall pay 11% p.a. interest rate, and 12% p.a. interest rate on the amount of the difference between the prescribed and deposited reserve requirement.  

The banks in Montenegro deposited and maintained reserve requirement with the Central Bank of Montenegfro on regular basis during 2006 in average amount of EUR 99.4 million. The highest level of reserve requirement deposited in the amount of EUR 172.8 million was recorded in December, which is EUR 111.1 million higher than reserve requirement deposited in December 2005. 

Average amount of deposits to which reserve requirement was calculated until April, when the new Decision came into force, amounted to EUR 263.9. From April until the end of the year, average amount of deposits circulated between EUR 486.9 million and EUR 1.024.5 million. The deposits of the banks to which reserve requirement has not been calculated, circulated between EUR 21.6 million and EUR 238.9 million.

Diagram for deposits and reserve requirement deposited in 2006

May 2007:

  Deposited reserve requirement funds of the banks as at 31 April 2007 amounted to EUR 215.4 million, out of which EUR 17.6 million, i.e. 8.2% has been deposited in the reserve requirement account in the country, EUR 196.0 miilion, i.e. 91.0% in the accounts of the Central Bank abroad and EUR 1.8 million, i.e. 0.8% as Treasury bills.  

The average state of deposits, that make the base for calculation of the reserve requirement appropriated in April amounted to EUR 1,237.5 million, which is EUR 71.4 million higher than the average state of deposits in March 2007. Sight deposits make 59.6%, term deposits with maturity, on the days for calculation of reserve requirement, less than 90 days make 21.9%, and term deposits with maturity, on the days for calculation of reserve requirement, more than 90 days but less than one year make 18.5%.  

For the same period, the average state of deposits which do not make up the base for calculation of the reserve requirement amounted to EUR 123.2 million, out of which 99.1% related to term deposits with maturity, on the days for calculation of reserve requirement more than one year and 0.9% related to sight deposits.

Data for April 2007:

  Deposited reserve requirement funds of the banks as at 30 April 2007 amounted to EUR 202.1 million, out of which EUR 15.1 million, i.e. 7.4% has been deposited in the reserve requirement account in the country, EUR 184.4 million, i.e. 91.3% in the accounts of the Central Bank abroad and EUR 2.6 million, i.e. 1.3% as Treasury bills.

 The average state of deposits, that make the base for calculation of the reserve requirement appropriated in April amounted to EUR 1,237.5 million, which is EUR 71.4 million higher than the average state of deposits in March 2007. Sight deposits make 59.6%, term deposits with maturity, on the days for calculation of reserve requirement, less than 90 days make 21.9%, and term deposits with maturity, on the days for calculation of reserve requirement, more than 90 days but less than one year make 18.5%.

 For the same period, the average state of deposits which do not make up the base for calculation of the reserve requirement amounted to EUR 85.3 million, out of which 99.9% related to term deposits with maturity, on the days for calculation of reserve requirement more than one year and 0.1% related to sight deposits.

Data for March  2007:

 Deposited reserve requirement funds of the banks as at 31^st March 2007 amounted to EUR 195,8 million, out of which EUR 16.8 million, i.e. 8.6% has been deposited in the reserve requirement account in the country, EUR 176.2 miilion, i.e. 90.0% in the accounts of the Central Bank abroad and EUR 2.8 million, i.e. 1.4% as Treasury bills.  

The average state of deposits, that make the base for calculation of the reserve requirement appropriated in March amounted to EUR 1,166.1 million, which is EUR 98.8 million higher than the average state of deposits in February. Sight deposits make 57.1%, term deposits with maturity, on the days for calculation of reserve requirement, less than 90 days make 24.5%, and term deposits with maturity, on the days for calculation of reserve requirement, more than 90 days but less than one year make 18.4%.

For the same period, the average state of deposits which do not make up the base for calculation of the reserve requirement amounted to EUR 45,2 million, out of which 99.2% related to term deposits with maturity, on the days for calculation of reserve requirement more than one year and 0.8% related to sight deposits.

Data for February 2007: 

Deposited reserve requirement funds of the banks as at 28th February 2007 amounted to EUR 184,8 million, out of which EUR 18.9 million, i.e. 10.2% has been deposited in the reserve requirement account in the country, EUR 148.9 miilion, i.e. 88.0% in the accounts of the Central Bank abroad and EUR 3.3 million, i.e. 1.8% as Treasury bills.  

The average state of deposits, that make the base for calculation of the reserve requirement appropriated in February amounted to EUR 1,067.3 million, which is EUR 45.6 million higher than the average state of deposits in January. Sight deposits make 56.2%, term deposits with maturity, on the days for calculation of reserve requirement, less than 90 days make 25.0%, and term deposits with maturity, on the days for calculation of reserve requirement, more than 90 days but less than one year make 18.8%.  

For the same period, the average state of deposits which do not make up the base for calculation of the reserve requirement amounted to EUR 45,2 million, out of which 96.7% related to term deposits with maturity, on the days for calculation of reserve requirement more than one year and 3.3% related to sight deposits.

Data for January 2007:

  Deposited reserve requirement funds of the banks as at 31 January 2006 amounted to EUR 170 million, out of which EUR 17.8 million, i.e. 10.5% has been deposited in the reserve requirement account in the country, EUR 148.9 miilion, i.e. 87.6% in the accounts of the Central Bank abroad and EUR 3.3 million, i.e. 1.9% as Treasury bills.  

The average state of deposits, that make the base for calculation of the reserve requirement appropriated in January amounted to EUR 1,021.6 million, which is EUR 79.9 million higher than the average state of deposits in December. Sight deposits make 57.1%, term deposits with maturity, on the days for calculation of reserve requirement, less than 90 days make 25.0%, and term deposits with maturity, on the days for calculation of reserve requirement, more than 90 days but less than one year make 17.9%.  

For the same period, the average state of deposits which do not make up the base for calculation of the reserve requirement amounted to EUR 42 million, out of which 95.4% related to term deposits with maturity, on the days for calculation of reserve requirement more than one year and 4.6% related to sight deposits.

Data for December  2006:  

Deposited reserve requirement funds of the banks as at 31 December 2006 amounted to EUR 172.8 million, out of which EUR 16.0 million, i.e. 9.3% has been deposited in the reserve requirement account in the country, EUR 153.5 miilion, i.e. 88.8% in the accounts of the Central Bank abroad and EUR 3.3 million, i.e. 1.9% as Treasury bills.

The average state of deposits, that make the base for calculation of the reserve requirement appropriated in December amounted to EUR 941.7 million, which is EUR 97.0 million higher than the average state of deposits in October. The structure of the base for calculation of the reserve requirement consists of sight deposits making 61.1% (EUR 575.6 million), term deposits with maturity, on the days for calculation of reserve requirement, less than 90 days making 22.1% (EUR 207,8 million), and term deposits with maturity, on the days for calculation of reserve requirement, more than 90 days but less than one year making 16.8% (EUR 158.3 million).  

For the same period, the average state of deposits which do not make up the base for calculation of the reserve requirement amounted to EUR 35.0 million, out of which 92.3% (EUR 32.3 million) relates to term deposits with maturity, on the days for calculation of reserve requirement, more than one year and 7.7% (EUR 2.7 million) relates to sight deposits that do not make up the base for calculation.

Data for November  2006:

 Deposited reserve requirement funds of the banks as at 30 November 2006 amounted to EUR 140.4 million, out of which EUR 47.5 million, i.e. 33.9% has been deposited in the reserve requirement account in the country, EUR 89.6 miilion, i.e. 63.8% in the accounts of the Central Bank abroad and EUR 3.3 million, i.e. 2.3% as Treasury bills.

The average state of deposits, that make the base for calculation of the reserve requirement appropriated in November amounted to EUR 844.7 million, which is EUR 42.1 million higher than the average state of deposits in October. The structure of the base for calculation of the reserve requirement consists of sight deposits making 58.3% (EUR 492.6 million), term deposits with maturity, on the days for calculation of reserve requirement, less than 90 days making 23.3% (EUR 197 million), and term deposits with maturity, on the days for calculation of reserve requirement, more than 90 days but less than one year making 18.4% (EUR 152.1 million).

For the same period, the average state of deposits which do not make up the base for calculation of the reserve requirement amounted to EUR 26.1 million, out of which 92.6% (EUR 24.2 million) relates to term deposits with maturity, on the days for calculation of reserve requirement, more than one year and 7.4% (EUR 1.9 million) relates to sight deposits that do not make up the base for calculation.

Data for October  2006: 

Deposited reserve requirement funds of the banks as at 31 October 2006 amounted to EUR 134.3 million, out of which 43.9% has been deposited in the reserve requirement account in the country, 53.5% in the accounts of the Central Bank abroad and 2.6% as Treasury bills.  

The average state of deposits, that make the base for calculation of the reserve requirement appropriated in September amounted to EUR 802.6 million, which is EUR 29.8 million higher than the average state of deposits in September. The structure of the base for calculation of the reserve requirement consists of sight deposits making 57.6% (EUR 462.6 million), term deposits with maturity, on the days for calculation of reserve requirement, less than 90 days making 23.4% (EUR 188 million), and term deposits with maturity, on the days for calculation of reserve requirement, more than 90 days but less than one year making 19% (EUR 152 million).  

For the same period, the average state of deposits which do not make up the base for calculation of the reserve requirement amounted to EUR 26.7 million, out of which 80% (EUR 21.4 million) relates to term deposits with maturity, on the days for calculation of reserve requirement, more than one year and 20% (EUR 5.3 million) relates to sight deposits that do not make up the base for calculation.

Data for September  2006: 

Deposited reserve requirement funds of the banks as at 30 September 2006 amounted to EUR 128.7 million, out of which 52.0% has been deposited in the reserve requirement account in the country, 44.4% in the accounts of the Central Bank abroad and 3.6% as Treasury bills.  

The average state of deposits, that make the base for calculation of the reserve requirement appropriated in September amounted to EUR 772.8 million, which is EUR 61.2 million higher than the average state of deposits in August. The structure of the base for calculation of the reserve requirement consists of sight deposits making 59.3% (EUR 458 million), term deposits with maturity, on the days for calculation of reserve requirement, less than 90 days making 22.1% (EUR 171.4 million), and term deposits with maturity, on the days for calculation of reserve requirement, more than 90 days but less than one year making 18.6% (EUR 143.4 million).

For the same period, the average state of deposits which do not make up the base for calculation of the reserve requirement amounted to EUR 24.6 million, out of which 80.5% (EUR 19.8 million) relates to term deposits with maturity, on the days for calculation of reserve requirement, more than one year and 19.5% (EUR 4.8 million) relates to sight deposits that do not make up the base for calculation.

Data for August  2006: 

Deposited reserve requirement funds of the banks as at 31 August 2006 amounted to EUR 123.2 million, out of which 52.3% has been deposited in the reserve requirement account in the country, 43.6% in the accounts of the Central Bank abroad and 4.1% as Treasury bills.  

The average state of deposits, that make the base for calculation of the reserve requirement appropriated in August amounted to EUR 711.6 million, which is EUR 89.6 million higher than the average state of deposits in July. The structure of the base for calculation of the reserve requirement consists of sight deposits making 59.7% (EUR 425 million), term deposits with maturity, on the days for calculation of reserve requirement, less than 90 days making 21.7% (EUR 154.3 million), and term deposits with maturity, on the days for calculation of reserve requirement, more than 90 days but less than one year making 18.6% (EUR 132.3 million).  

For the same period, the average state of deposits which do not make up the base for calculation of the reserve requirement amounted to EUR 22.6 million, out of which 84.3% (EUR 19 million) relates to term deposits with maturity, on the days for calculation of reserve requirement, more than one year and 15.7% (EUR 3.6 million) relates to sight deposits that do not make up the base for calculation.

Data for July, 2006:

Deposited reserve requirement funds of the banks as at 31 July 2006 amounted to EUR 106.0 million, out of which 51.3% has been deposited in the reserve requirement account in the country, 43.6% in the accounts of the Central Bank abroad and 5.1% as Treasury bills.

The average state of deposits, that make the base for calculation of the reserve requirement appropriated in July amounted to EUR 622 million, and it is for EUR 51 million higher than the average state of deposits in June. The structure of the base for calculation of the reserve requirement consists of sight deposits making 56.9% (EUR 354 million), term deposits with maturity, on the days for calculation of reserve requirement, less than 90 days making 23.2% (EUR 144 million), and term deposits with maturity, on the days for calculation of reserve requirement, more than 90 days but less than one year making 19.9% (EUR 124 million).

For the same period, the average state of deposits which do not make up the base for calculation of the reserve requirement amounted to EUR 29 million, out of which term deposits with maturity, on the days for calculation of reserve requirement, more than one year make 93.6% (EUR 27 million) and sight deposits that do not make up the base for calculation make  6.4% (EUR 2 million).

Data for June, 2006:

  Deposited reserve requirement funds of the banks as at 30 June 2006 amounted to EUR 95,9 million, out of which 47,9% has been deposited in the reserve requirement account in the country, 45,9% in the accounts of the Central Bank abroad and 6,2% as Treasury bills.

 The average state of deposits, that make the base for calculation of the reserve requirement appropriated in June amounted to EUR 571 million, and it is for EUR 48 million higher than the average state of deposits in May. The structure of the base for calculation of the reserve requirement consists of demand deposits making 57,3% (EUR 327 million), term deposits with maturity, on the days for calculation of reserve requirement, less than 90 days making 21,2% (EUR 125 million), and term deposits with maturity, on the days for calculation of reserve requirement, more than 90 days but less than one year making 20,9% (EUR 119 million).

 For the same period, the average state of deposits which do not make up the base for calculation of the reserve requirement amounted to EUR 24 million, out of which term deposits with maturity, on the days for calculation of reserve requirement, more than one year make 92.8% (EUR 22 million) and sight deposits that do not make up the base for calculation make 7.2% (EUR 2 million).

 Data for May, 2006:

  Deposited reserve requirement funds of the banks as at 31 May 2006 amounted to EUR 86,5 million, out of which 48,3% has been deposited in the reserve requirement account in the country, 44,9% in the accounts of the Central Bank abroad and 6,8% as Treasury bills.

 The average state of deposits, that make the base for calculation of the reserve requirement appropriated in May amounted to EUR 523 million, and it is for EUR 24 million higher than the average state of deposits in April. The structure of the base for calculation of the reserve requirement consists of demand deposits making 58,3% (EUR 305 million), term deposits with maturity, on the days for calculation of reserve requirement, less than 90 days making 22,3% (EUR 117 million), and term deposits with maturity, on the days for calculation of reserve requirement, more than 90 days but less than one year making 19,4% (EUR 101 million).

 For the same period the average state of deposits which do not make up the base for calculation of the reserve requirement amounted to EUR 25 million, out of which term deposits with maturity, on the days for calculation of reserve requirement, more than one year make 92.0% (EUR 23 million) and sight deposits that do not make up the base for calculation make 8.0% (EUR 2 million).

Data for April, 2006:

  The first depositing, pursuant to the new decision, the banks performed on 19 April 2006. The deposited reserve requirement amount, according to the new decision and compared to the previous state, is higher for EUR 12.5 million.

 Deposited reserve requirement funds of the banks as at 30 April 2006 amounted to EUR 82.3 million, out of which 47.0% has been deposited in the reserve requirement account in the country, 45.5% in the accounts of the Central Bank abroad and 7.5% as Treasury bills.

 The average state of deposits in the period 10-30 April, that make the base for calculation of the reserve requirement amounted to EUR 499 million, demand deposits making 60% (EUR 298 million), term deposits with maturity, on the days for calculation of reserve requirement, less than 90 days making 22% (EUR 111 million), and term deposits with maturity, on the days for calculation of reserve requirement, more than 90 days but less than one year making 18% (EUR 90 million).

 The average state of deposits which do not make up the base for calculation of the reserve requirement amounted to EUR 22 million, out of which term deposits with maturity, on the days for calculation of reserve requirement, more than one year make 95.7% (EUR 21 million) and sight deposits that do not make up the base for calculation make 4.3% (EUR 1 million).