Montenegro’s Banking System

Montenegro has a relatively mature banking system that is dominated by under 20 banks. These are divided almost evenly between corporations based in Montenegro and ones from other countries.

Obviously, having a bank account is an essential part of life. If you plan to live in Montenegro, it will definitely help to have a local bank account.

From opening an account to knowing about deposit insurance, this guide will help you make sense of Montenegro’s banking system.

Getting a Montenegro Bank Account Set Up

Compared to many developed countries, it is very easy to open a bank account at a Montenegrin bank. The only document needed to get a Montenegro bank account is a valid passport.

That compares favorably to neighboring countries like Serbia — experts on Montenegro’s banking sector commonly claim that you need 10 documents to open an account there.

To open a bank account in Montenegro you will have to visit your local bank branch in person. They will want you to show proof of identification and sign a contract. The information associated with your account will be kept on file.

Transferring Money Into Your Montenegrin Bank Account

Typically, expats and Montenegrins who do business globally or travel out of the country will open paired bank accounts.

Banks in Montenegro use the Euro even though Montenegro is not a member of the European Union.
Banks in Montenegro use the Euro even though Montenegro is not a member of the European Union.

There are two types of bank accounts at Montenegro’s banks, which depend on the type of transaction:

  1. National accounts, which are for making payments within Montenegro, and
  2. International accounts, for moving money into or out of the country.

Funds you move into Montenegro will land in your international account. You’ll have to transfer money to your national account in order to pay bills or withdraw cash.

Most banks will offer free transfers between your national and international account.

Choosing a Bank in Montenegro

Montenegro’s central bank has licensed about 15 banks to operate branches, issue loans and take deposits. The biggest of these are:

  • Prva Banka Crne Gore (First Bank of Montenegro) based in Podgorica, this large native-to-Montenegro bank has faced some controversy over its 118-year history.
  • Erste Bank AD Podgorica is part of the Austrian-based Erste group and has been operating in Montenegro since 2009.
  • Societe Generale Bank Montenegro (formerly Podgorička banka) has 20 branches across the country and is one of the most active players in Montenegro’s commercial lending sector.

Fees for a Montenegro Banking Account

Most of Montenegro’s bank accounts come with a very small monthly fee in the range of a few Euros, at the most. Banks here will have a standard service fee for things like international wire transfers and certified checks.

Montenegro’s Banking Sector as Part of the Economy

The Montenegrin banking system is relatively stable and enjoys a fairly high rate of confidence. All banks are privately owned corporations.

Montenegro's banking sector has been an active participant in the country's transition to a free-market economy.
Montenegro’s banking sector has been an active participant in the country’s transition to a free-market economy.

That’s despite the fact that two banks, Atlas and Invest Bank Montenegro, were recently placed under control of the central bank after an audit raised red flags.

Montenegrin banks are funded with a relatively high rate of foreign investment  — about 21% compared to less than 10% in neighboring Serbia. Domestic deposits make up 60% of financing and capital adequacy remained strong during the Global Financial Crisis in 2008-09.

How Does Montenegro Compare on Banking Secrecy?

Judging a country’s level of banking secrecy seems to be about two questions:

  1. Will banks here do a good job of protecting the financial information I want kept private?
  2. Will banks shelter my information from government’s law enforcement and tax collecting authorities?

In short, Montenegro’s banks do well on the first question and are in the middle of the pack for the second.

Banks in Montenegro do not participate in the Automatic Exchange of Information (AEOI) or Common Reporting Standards (CRS) schemes at this time.

If Montenegro gets its wish of joining the EU in the next decade they will have to join AEOI at that time.

That means that banks here don’t automatically report account holdings to national governments.

Some other details on banking secrecy in Montenegro include:

  • It is a crime (with an attached prison sentence) to disclose banking information.
  • Banks must collect and store identifying information (KYC) about their customers.
  • In Montenegro, banks must report large transactions to government authorities.

It’s probably fair to characterize Montenegro as a country with a somewhat high level of bank secrecy, at this moment. But the likely trend is towards much more openness in the near future.

Offshore Banking in Montenegro

Offshore banking is the system where a bank is established in one country but it mainly caters to clients from abroad. Usually, offshore banks do not conduct typical banking activity in the country of establishment. Clients choose them for greater privacy and to shelter wealth, sometimes to pay less tax, sometimes to fund illegal activity.

Switzerland, Luxembourg and Britain’s Channel Islands are three examples of countries that are commonly associated with the practice of offshore banking, but the IMF identified 46 offshore financial centers. Montenegro did not make this list.

Montenegro flirted with the idea of offshore banking in the past but swiftly cracked down on the industry, after US pressure, in 2002.

For now, Montenegro is a fine place to hold small deposits to fund your everyday life living here but is not an offshore banking center. Although it’s possible that this might change in the future.

Montenegro’s Private Banking Options

Wealth management and private banking are relatively small parts of the Montenegrin banking sector. But expect to see more of this type of financial service, geared to international, high-net-worth clients as Montenegro’s luxury tourism industry develops .

Luxury tourism development, especially for the yacht set, will surely lead to an increase in private banking options in Montenegro.
Luxury tourism development, especially for the yacht set, will surely lead to an increase in private banking options in Montenegro.

For now, the larger foreign banks with branches in Montenegro are your best bet for specialized services like private banking.

Insurance for Deposits in Montenegrin Banks

The Montenegrin government has instituted a rather generous deposit protection scheme. This fund guarantees to reimburse customers in the event of a Montenegrin bank failure. Important details include:

  • The guarantee is for up to €50,000 per depositor in a particular bankrupt bank.
  • Liabilities are deducted from deposit totals before reimbursements are set.
  • So, if you owed €5,000 for a loan from a Montenegrin bank and had €12,000 in various deposit accounts, you are only covered for €7,000.
  • Almost all accounts, including current and savings accounts, are insured.
  • The level of coverage is up significantly from 2010 when only the first €20,000 was covered.
  • Deposits by non-residents are covered as part of this system.
  • Payouts from the fund are meant to start within about a month after a particular bank fails.

Montenegro’s Banking System in a Nutshell

A local bank account is a core part of living in a country. Montenegro is no exception. The highlights of having an account at a Montenegro bank include:

  • The banking system is maturing and moving towards closer integration with Europe.
  • That said, some banks here have been accused of corruption or brought under government administration, so it might make sense to choose one of the Montenegrin banks who are part of larger European banking groups.
  • Fees are very low. Usually under €1 per month.
  • You will need a pair of accounts; one to move money in or out of the country and one for local-currency transactions.

It’s an exciting time for Montenegro and the growing banking sector is part of that trend. Get in touch if you have any further questions about the banking system in Montenegro.