The Council of the Central Bank of Montenegro has proposed banning banks from paying out dividends to their shareholders. The move is part of a wider series of temporary measures designed to mitigate the negative effects of the new virus corona on the country’s financial system. While no dividends can be paid, payments in the form of shares in the bank would still be acceptable, reports Bankar.me.
The idea to allow dividends to be converted into shares would serve to increase the level of capitalization in Montenegrin banks, helping ensure that it is fully prepared for potential challenges. The central bank also proposed that banks limit their exposure to any one person or entity to 25 percent of the bank’s own funds. These measures must still be approved by the Central Bank and are intended to be temporary measures only.
