The Council of the Central Bank of Montenegro passed the Decision amending the Decision on interim measures to mitigate adverse effects of the new coronavirus on the financial system, and the first measure temporarily prohibits banks from paying dividends to shareholders, except in the form of bank shares.
“Therefore, dividend distribution is allowed only by transforming it into equity. This measure will increase the capitalization level of the Montenegrin banking system and ensure its full preparedness for potential challenges,” the CBCG explained.
There’s also another measure – banks are allowed to increase exposures to one person or group of related parties beyond the prescribed exposure limits (25% of the bank’s own funds) through the granting of loans or otherwise, with the Central Bank’s prior approval.
They also wanted to stress that these are temporary measures, whose length will depend on the further situation and the banks’ financial situation, which is being monitored intensively and on a daily basis.
