The Central Bank of Montenegro (CBCG) has adopted a new package of banking regulations covering capital requirements, governance, executive suitability and credit reporting as Montenegro advances alignment with the European Union’s prudential framework.
CBCG said its council approved secondary legislation aligned with CRD VI, CRR3 and European Banking Authority standards. The measures cover prudential requirements, systemic-risk buffers, remuneration, corporate governance, suitability assessments, disclosure obligations and bank liquidation procedures. A new framework for the Credit Registry was also adopted, defining the information financial institutions must provide and the conditions governing access to registry data. The new rules increase compliance and governance requirements for banks and require adjustments to internal systems, policies and reporting as they are implemented.
The governance provisions introduce closer scrutiny of the suitability of directors and key-function holders, including professional experience, independence, conflicts of interest and management oversight. Remuneration policies will also face greater regulatory supervision.
CRD VI and CRR3 form part of the EU’s implementation of global Basel banking standards, strengthening requirements related to capital calculation, operational risk, governance and supervisory oversight. Montenegro’s banking sector had approximately €5.8 billion in loans and more than €6 billion in deposits by mid-2026, with credit continuing to expand at double-digit annual rates. At the end of June, capital adequacy stood at around 21.08%, more than twice the statutory minimum, while non-performing loans were approximately 2.4%, their lowest level since 2010. Banks earned around €77 million through July 2026, although profits were approximately 10% lower than in the same period a year earlier.
The new systemic-risk framework gives CBCG additional tools to address vulnerabilities across the banking system, including risks associated with lending concentrated in real estate, tourism and construction.
The revised Credit Registry framework is intended to provide lenders with more comprehensive information on borrowers’ indebtedness and repayment history as consumer, mortgage and SME lending expands. More complete credit information can help banks assess total borrower exposure where customers have loans with multiple institutions and support more accurate credit pricing. Highly leveraged borrowers may face tighter lending conditions, while stronger credit profiles can be assessed more distinctly. The rules on voluntary bank liquidation establish procedures for institutions exiting the market, with the aim of providing an orderly process for depositors and creditors.
The regulatory changes form part of Montenegro’s broader process of aligning its financial system with European institutions and the European System of Central Banks. CBCG has also completed a separate institutional-readiness assessment with European central banks and is moving into implementation. For foreign banking groups operating in Montenegro, greater alignment with EU requirements could reduce differences between domestic rules and those applied at parent-bank level, although implementation will require additional compliance work and investment in systems, staff and governance. The banking sector’s current capital and profitability levels provide capacity for additional compliance spending, while the new framework is being introduced as credit continues to grow and non-performing loans remain at 2.4%.
