Main features of the deposit protection scheme in Montenegro
Protected deposits of private citizens, entrepreneurs and legal persons
The deposit protection scheme covers deposits of private citizens, entrepreneurs and legal persons, both resident and non-resident, in all banks in Montenegro. All types of deposits of account holders are protected, including giro accounts, current accounts, and savings deposits. All exclusions from the scheme are prescribed in Article 6 paragraph 2 of the Deposit Protection Law, in accordance with the common practise in the world
Guaranteed coverage of 50,000 €
In case of a bank bankruptcy, the Deposit Protection Fund guarantees the reimbursement of up to 50,000 € per depositor, regardless of the number and type of deposits held in such a bank, provided that a transitional solution is introduced whereby the guaranteed deposit coverage is to be gradually increased, starting from 20,000 € in 2010 and 2011 and up to 35,000 € in 2012.
The amount to be reimbursed is calculated by adding up balances in all accounts held by a depositor in the bank and reduced by the depositor’s matured liabilities to the bank as at the bankruptcy initiation date.
Calculation of the guaranteed amount:
All balances in a depositor’s accounts held in the failed bank are added up, including any accrued interest (as at the bank bankruptcy date), and reduced by the depositor’s matured liabilities to the bank. The obtained amount (balance) may be lower or higher than 50,000 €. If the remaining balance does not exceed 50,000 €, the depositor shall be reimbursed the entire balance, yet in case of a higher amount, the depositor shall be reimbursed the guaranteed coverage of 50,000 €.
The aforesaid is subject to the transitional solution whereby the guaranteed deposit coverage is to be gradually increased, starting from 20,000 € in 2010 and 2011 and up to 35,000 € in 2012.
Guaranteed deposit payout
The guaranteed deposit payout from the Fund’s resources shall begin no later than within 20 business days following the protected event date, that is, the bank bankruptcy date, with the possibility of extending this period for additional 10 business days upon the bankruptcy administrator’s request. The transitional solution is introduced to be in effect until 31 December 2011 and it envisages the payout period to commence within 45 business days following the protected event date (bank bankruptcy date).
The Fund shall inform depositors about the exercising of their right to guaranteed deposit payout, including the payout bank, place and date of the payout commencement.
Deposits covered in all banks
All banks licensed by the Central Bank of Montenegro are automatically included in the deposit protection scheme, which means that deposits in all banks in Montenegro are protected, including those in branches of the Montenegrin banks operating abroad.
Deposits insured by the Deposit Protection Fund
The Deposit Protection Fund is in charge of deposit protection and it guarantees the reimbursement of deposits in case of a bank failure up to the prescribed guaranteed coverage and within the specified time period.