Deposit Protection Fund
Mission of the Deposit Protection Fund is to provide insurance of deposits held in banks by citizens and companies and to disburse guaranteed deposits in an efficient and fast manner, in case of bankruptcy of any bank in Montenegro .
Sound financial system, based upon confidence of citizens that their savings held with banks are insured, even in case of a bank failure.
Diverse and propitious bank services to citizens and businesses, as a result of mutual reliance, increase of people savings and resistance of the banking system to insolvency of a single member.
Management of the Deposit Protection Fund
The Fund is managed by Managing Board, consisted of five members, and appointed by the Central Bank of Montenegro.
One Board member, as defined by Law, may be a representative of a donor organization, with donation not less than 5% of average amount of guaranteed deposits.
Not more than three Board members may be employees of the Central Bank.The Law also determines that a shareholder owning over 5% of shares in a bank can not be a member of the DPF Managing Board.
Mandate and powers of Managing Board include making decisions on conditions and procedures of guaranteed deposits reimbursement, as well as defining investment policy, which will insure stability and solvency of the Fund.
The basic design features of the deposit insurance scheme in Montenegro
Deposit insurance for both citizens and companies
Deposit insurance scheme comprises deposits of citizens and companies,residents and non-residents. All kinds of deposits held with bank under the name of owner are protected, including current, giro or transaction accounts and savings deposits. Deposits excluded from deposit insurance system are defined by Law, in line with the best international practice.
The guaranteed amount
Guaranteed deposit is a deposit or part deposit with a bank whose payment made by the Fund in accordance with the Deposit Protection.
In the event of a bank failure, the Deposit Protection Fund guarantees payment to:
◄ 35.000 EUR from 01.01.2012. to 31.12.2012.
◄ 50.000 EUR from 01.01.2013.
The amount to be reimbursed is calculated for each depositor separately, adding up deposits on all accounts held with the failed bank, reduced by total liabilities of depositor to the bank, as registered on the day the bank is declared bankrupt, according to the following formula:
All deposits of depositor in the failed bank
+ Accrued interest (by the day of bankruptcy action)
- All liabilities of depositor (loans, overdraft, etc.)
Reimbursement of guaranteed deposit
When a protected event, that when opened bankruptcy proceedings against the Bank, the Fund pays guaranteed deposits through one or more banks. After determining the total amount of guaranteed deposits and number of depositors, the Fund initiated the payment procedure. The Fund shall not later than 30 working days from the protected case make available to depositors calculated amount of guaranteed deposits.
All banks members of deposit insurance safety net
All banks licensed by the Central Bank of Montenegro are automatically included in the deposit insurance scheme, which means that deposits held with all banks in Montenegro are protected.