The mission of the Central Bank of Montenegro is to establish and maintain sound banking system and monetary policy.
The Central Bank of Montenegro was established on the basis of the Law on Central Bank of Montenegro, passed by the Parliament of the Republic of Montenegro in November 2000. With its establishment, the Republic of Montenegro obtained an independent authority responsible for monetary policy, and establishment and maintenance of sound banking system and efficient payment system operations.
The Central Bank started to operate on March 15, 2001, when the Montenegrin Parliament adopted the Decision on Appointment of Members of Council of the Central Bank of Montenegro.
The CBM is not an issuing bank, and it has the following powers and responsibilities in the performance of its functions determined by law:
· to issue and withdraw licenses to banks and financial institutions, to regulate and supervise their operation and conduct bankruptcy and liquidation proceedings over banks and financial institutions in the Republic;
· to give loans from its reserves to licensed banks in the Republic, under the conditions determined by law;
· to prescribe and undertake measures, and regulate and supervise payment system, settlement and inter-bank clearing in the Republic;
· to carry out and supervise the domestic and international payment system;
· to act as a banker, advisor and fiscal agent of the bodies and authorities of the Republic;
· to buy and sell currencies and precious metals on its own behalf or on behalf of the Republic;
· to buy and sell securities on the secondary market issued by the Republic, European Union member states, or other states designated in the Central Bank regulation;
· to make regular macroeconomic analyses, including monetary, fiscal, financial and balance of payment studies of the Republic economy, and to give recommendations in the area of economic policy to the Republic;
· to prepare and participate in preparation of laws and other regulations in monetary, foreign currency and banking system, in accordance with international standards, including determination of reserves for various types of deposits;
· to provide banking services in favor of foreign governments, foreign central banks as well as international organizations and other international institutions in which Central Bank of the Republic are members;
· to take deposits from banks, state agencies and organizations;
· to establish and maintain accounts for the needs of state bodies and organizations, local and foreign banks, international financial institutions and donor organizations;
· to prescribe manner of operations for dealers and banks in foreign exchange transactions, set limits on foreign exchange positions of dealers and banks and perform their control;
· may be owner and manage one or more payment systems, including one real time gross payment system;
· may manage a real time net payment system;
· to provide banknotes and coins in quantities appropriate to satisfy the needs of financial transactions;
· to perform other operations determined by this and other laws.