Payment System Reform


Payment system reform began on the day the Law on the Central Bank came into effect. In accordance with the Law the ownership and the employees of ZOP have been taken on by the Central Bank of Montenegro.  


The Council of the Central Bank of Montenegro adopted the Plan for the domestic payment system, and the reform itself was performed in two phases. 

Phase I has accomplished the following fundamental changes:

-          the ex ZOP has been integrated into the operational and management structures of the Central Bank of Montenegro,

-          the migration of a significant part of payment system operations to commercial banks has been finalized with the simultaneous abolishment of the network of branches of the ex ZOP,

-          the Regional Centers of the Central Bank have opened for the distribution of cash and  new technological procedures have been implemented to supply banks with cash,

-          the commercial banks have been incorporated into new intra-bank systems, and expanded their network of business units and have earned additional income on the basis of performing these businesses,

-          most of the non-payment functions that were performed by ZOP have been moved to new different organizations.

Phase II has accomplished the following fundamental changes: 

1)     the system of centralized processing has been cancelled, that is, the processing of all orders from the Central Bank,

2)     The Central bank has provided a new information and technological system for the processing of inter-bank payments, by offering two services to the banks ( the RTGS that provides inter-bank payments in real time and DNS or Clearing that enables the settlement of inter-bank payments in deferred-designated time through three clearing cycles during the working day of the system),

3)     The banks have provided new information and technological systems in which they process the intra-bank payments of their clients and through which they participate in the Inter-bank payment system for the settlement of inter-bank payments,

4)     Important internationally standards in the payment system have been implemented, such as the IBAN standard referring to the construction of an account that enables the unique identification of the account of a client internationally which is especially significant for the elimination of errors in cross border transactions,

5)     The SWIFT standard has been implemented referring to the format of the electronic messages in the payment system and the performing of electronic payment operations has been enabled between banks and the Central Bank, and the banks have invested significantly in their internal  system and electronic performance of payment operations for their clients,

6)     A new project for the processing and the division of public revenues has been supported ( the so called revenue model) that is now being performed in the State Treasury,

7)     The conditions have been created for commercial banks to monitor their liquidity on a daily basis which is significant from the point of view of the control of total risks in the business operations of the bank,

8)     A new regulatory framework has been adopted that affirms the Core Principles for Systemically important payment systems and in internal payment operations.  

It is very important to point out that all of this has been attained, virtually, without any disruptions referring not only to the performing of payment operations, but also to the other systems that relied to a great extent on the ex ZOP, such as the fiscal sector, statistics and so on.