The EBRD is helping to strengthen the financial sector in Montenegro with a €30 million sovereign guaranteed loan to the Deposit Protection Fund of Montenegro (DPF).
As part of the EBRD’s crisis response, the credit line will enable the DPF to gradually increase the deposit insurance coverage in Montenegro from the current €20,000 to €50,000 by 2013, bringing it in line with the EU recommendations. The project will help Montenegro to improve its deposit insurance scheme by offering greater protection to small depositors. It will enable DPF to achieve a similar level of protection to its neighbouring countries, which have recently increased their deposit insurance coverage. The project will offer an important confidence boost to the country’s financial sector, thus ensuring further development of the banking system in Montenegro.
“Strengthening the financial sector by supporting the development of its infrastructure is one of the EBRD’s core priorities in its region, particularly in the current environment. The EBRD loan offered to the DPF will improve the deposit insurance scheme in Montenegro, providing an additional confidence boost to the country’s banking system”, said Marek Lorinc, Head of the EBRD office in Montenegro. “We are pleased to cooperate with the EBRD in this important project for Montenegro. The EBRD funds will enable DPF to bring greater confidence to the country’s banking system and raise the levels of deposit growth. This project will be supported by the implementation of the Deposit Protection Fund Law that will strengthen the regulatory framework”, said Predrag Markovic, Director of the Deposit Protection Fund. The DPF was established in 2006 with the support of KfW. The initial deposit insurance coverage in Montenegro was €5,000. By the end of 2009 DPF’s capital has reached €19 million.
News source: EBRD link: article
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