According to the data of the Central Bank of Montenegro (CBCG), the required reserve of banks at the end of January amounted to EUR 266.9 million. Of the total amount, 68.78% was allocated to the mandatory reserve accounts of banks in the country, and 31.2% to the CBCG accounts abroad.
The average balance of total bank deposits, which form the basis for calculating the required reserve, was EUR 4.89 billion in December last year. Of the total level of deposits, 82.92% refers to demand deposits, and 17.08% to term deposits. Banks in Montenegro allocated a mandatory reserve based on the decision of the CBCG. That decision established a system for calculating the required reserve by applying a rate of 5.5% to the part of the base made up of demand deposits and deposits with a maturity of up to one year and a rate of 4.5% to the part of the base made of deposits with a maturity of over one year . A rate of 5.5% is applied to deposits contracted with a maturity of more than one year that have a clause on the possibility of installments within a period of less than one year.
As of January 2018, the basis for the calculation of the reserve requirement consists of fixed-term and demand deposits, except those of central banks. On 50% of the allocated mandatory reserve, the CBCG pays the banks a monthly fee calculated at the rate of €STR (Euro short-term interest rate) reduced by ten basis points on an annual basis, with the fact that this rate cannot be lower than zero. Banks can use interest-free up to 50% of the allocated mandatory reserve to maintain daily liquidity, if they return the used amount on the same day.