Montenegrin President Jakov Milatović has returned the recently passed Law on the Development Bank of Montenegro to the Parliament for reconsideration. The law was approved on August 17.
Milatović’s rationale for returning the law is that it outlines the creation of the Development Bank of Montenegro through the transformation of the Investment and Development Fund. He acknowledged that such institutions are standard practice in both EU countries and the wider region and that establishing this bank could enhance the institutional framework for economic financing and support.
However, Milatović criticized the law for being proposed without prior public consultation. He noted that important stakeholders, including the Central Bank of Montenegro (CBCG), the Association of Banks, and international financial institutions, were excluded from the legislative process. This lack of engagement with experts and the public undermines the thoroughness of the law’s preparation.
The President also expressed concern that the law did not include consultations with the European Commission (EC) to ensure compliance with EU standards. He argued that passing such significant legislation without comprehensive consultations and expert input is unacceptable.
Furthermore, Milatović raised objections to the law’s provision that aligns the Development Bank with commercial banks by allowing it to accept deposits and handle payment transactions, while simultaneously exempting it from regulations governing credit institutions. He emphasized the need for an EC opinion on these aspects to ensure they meet European standards.
Milatović also criticized the provision that the Montenegrin government would unconditionally and irrevocably guarantee all the Development Bank’s obligations, except for deposits. He questioned the adequacy of depositor protection under this framework.
The law also lacks clarity on other critical issues, such as the transparency of the Development Bank’s operations, the role of the CBCG in overseeing the bank, and the appointment of its management. Milatović argued that insufficient oversight by the CBCG could compromise the bank’s transparency and adherence to both domestic and European regulations, potentially affecting its financial stability and effectiveness.
In summary, Milatović has asked the Parliament to carefully reassess the law to ensure that the Development Bank is established under a framework that is transparent and aligned with European best practices.
