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Deposit insurance in Montenegro. Predrag Marković Managing Board President Deposit Protection Fund. Deposit Protection Law. Law was adopted in 2003 ( amendments in 2005); A protected event occurs in case of bankruptcy of a bank

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Deposit insurance in montenegro

Deposit insurance in Montenegro

Predrag Marković

Managing Board President Deposit Protection Fund

Deposit protection law
Deposit Protection Law

  • Law was adopted in 2003 (amendments in 2005);

  • A protected event occurs in case of bankruptcy of a bank

  • The amount of the guaranteed deposit is 5,000 € perdepositor;

  • Deposits of legal and physical entities are guaranteed;

  • All the banks are obliged to provide deposit protection.

Excluded deposits
Excluded deposits:

  • Deposits of legal entities engaged in insurance;

  • Deposits of the budget of Montenegro and local government budgets;

  • Deposits of Off-budgets;

  • Deposits of pension funds;

  • Deposits of banks;

  • deposits of persons holding a bank’s shares entitled to more than 5% of votes at the bank shareholders’ meeting,

Excluded deposits1
Excluded deposits

  • deposits of bank general managers, members of bank management boards and persons who hold offices of director, deputy director and heads of the departments or other organizational entities in the bank, deposits of legal entities in which such persons have 10% or more participation in capital or voting shares, as well as deposits of their spouses or relatives in the straight or lateral lines of kinship, up to the second degree of kinship,

Excluded deposits2
Excluded deposits

  • deposits of persons responsible for audit,

  • deposits of persons established in the report on control provided by the Central Bank of Montenegro as the persons that contributed to deterioration of the bank’s financial situation and

  • deposits for which a procedure has been initiated for establishing their connections with the transactions or actions representing “money laundering” or financing terrorism

Protected deposit
Protected deposit

  • The total amount of all protected deposits of a depositor including the accrued interest on such deposits up to the date of the occurrence of a protected event.

  • Such amount is reduced by the amount due by the depositor to the bank

Guaranteed deposit
Guaranteed deposit

  • Guaranteed deposit amounts to 5.000 €per depositor, regardless of the number and amount of deposits possessed by that depositor at a bank.

  • The amount of the guaranteed deposit may be changed (increased) by amendments to the Law

Deposit protection fund
Deposit Protection Fund

  • Deposit Protection Fund is a legal entity;

  • Registered office of the Fund is in Podgorica;

  • In its activities of deposit protection the Fund is exempted from paying duties and fees;

  • The Fund is authorized to:

  • Determine the rate of the annual premium

  • Collect initial and annual premiums;

  • Invest funds;

  • Pay guaranteed deposits

Managing board of the deposit protection fund
Managing Board of the Deposit Protection Fund

  • The Fund is managed by the Managing Board of 5 (five) members;

  • Managing Board is appointed by the Central Bank of Montenegro;

  • Term of office of the Managing Board members is 4 years, except for the President and one member that have the term of office of 6 years

Resources of the fund
Resources of the Fund

Provided from:

  • Initial premium;

  • Annual premiums;

  • Extraordinary premiums;

  • Revenues from investment of the Fund’s resources;

  • Donations;

  • Other sources.

    The Fund may issue securities

Initial premium
Initial premium

  • Amounts to 0,3% of the total deposits but not less than 10.000 € (this provision is in effect for the banks, that automatically became members of the Fund on the day of coming into force of the Law on Deposit Protection);

  • Banks that on the day of coming into force of the Law were subjected to the measures of the Central Bank became the members of the Fund in October 2007 and paid the initial premium in the amount of 0,3%;

  • For new banks the initial premium amounts to 10.000 €;

Annual premium
Annual premium

  • Paid in quarterly installments;

  • calculation base isthe average of the total deposits determined on the last day of every month for the previous quarter;

  • Managing Board establishes the amount of the rate of the annual premium for every year in advance (current rate is 0.25%);

  • A differential premium may be introduced.

  • Premiums cannot be recovered.

Fund financing in case of insufficient resources
Fund Financing in Case of Insufficient Resources

  • Charging extraordinary premium which, together with the annual premium may amount to 1,5% of the total deposit of the bank;

  • Loan from domestic and foreign banks

  • Loan from the budget of the Republic

  • Issuing securities

Utilization of the fund s resources
Utilization of the Fund’s Resources

  • Payment of the guaranteed deposits:

  • Payment of the principal and interests of loans;

  • Fund’s operating costs.

    In line with the Investment policy of the Fund the resources may be invested in:

  • Securities issued by the Republic of Montenegro or banks, financial institutions or high ranking state;

  • Deposits in the high ranking banks.

Payment of guaranteed deposits
Payment of guaranteed deposits

  • Payment has to start at latest within 60 days and it has to be completed within 90 days from the day of the “protected event”;

  • Bankruptcy Administrator submits the data on protected deposits and depositors of the bank in bankruptcy within 15 days from the day of bankruptcy;

  • Managing Board passes the Decision on terms, conditions and procedure of payment of the guaranteed deposits;


  • Decision on the choice of the bank and term of payment is published in the media;

  • Fund has provided a software for establishing the amounts of the guaranteed deposits of the deponents of a bank in bankruptcy;

  • Fund passes individual decision on excluded deposits;

  • The bank submits to the Fund the data on the payments of guaranteed deposits.

Claims of the fund from a bank in bankruptcy
Claims of the Fund from a bank in bankruptcy

  • Fund submits to the Bankruptcy Administrator a report on the paid guaranteed deposits;

  • Such report is the basis for claims of the Fund from the banks in bankruptcy;

  • Fund is in the fifth line of priority in payment of claims of a bank in bankruptcy.

  • Depositors keep the position in the order of payment, as if there was no payment of the guaranteed deposit

Current situation
Current situation

  • All the banks (11) are included in the deposit insurance scheme;

  • Fund has been providing deposit protection according to the Law since January 1st2006 god;

  • Resources of the Fund amount to approximately 11.5 million €, 2.5 million of which are the funds of the German Government donation.


  • The banks are obliged to disclose the Fund’s logo in general terms of operation, in individual contracts and in a visible place in the business premises with an information sign that reads: “The Bank is a member of the Fund for Deposit Protection and the bank depositors’ deposits are protected in compliance with Law on Deposit Protection up to the amount of EUR 5,000”.

  • Fund made flyers with the basic data on deposit protection and distributed them to the banks members of the Fund,

  • Fund has prepared and it broadcasts the TV spot, promoting deposit protection;

  • Fund is the member of the European Forum of Deposit Insurers- EFDI.

    Fond za zatitu depozita Montenego Podgorica Miljana Vukova bb. Tel. +38230210465 htp// fzd@cg.yu

Tv spot of the fonda
TV spot of the Fonda

F u nd

  • The Fund has 3 employees and the President of the Managing Board of the Fund;

  • Assets of the Fund are given to the Central Bank of Montenegro for management on the basis of the international tender for selection of Asset manager;

  • In the current situation of the operation of the banks no “protected case” occurrence is envisaged.