The regulatory agency increased the percentage of resources subject to the intermediation of free convertibility accounts from 10% to 30%.
Venezuelan Banks Authorized to Grant Loans in Bolivars on 30% of Foreign Currency Deposits
The National Superintendence of Banking Sector Institutions (SUDEBAN) authorized as of Wednesday, January 18 that the national banks may grant credits in bolivars on 30% of their deposits in foreign currency, as per Circular No. 00335.
The institutions will be able to grant credits in local currency to their clients with the resources coming from foreign currency fundraising.
“The foreign currency corresponding to the referred percentage must be offered in the Exchange Market System (SMC) for subsequent settlement under the different credit modalities provided for in the law and complementary regulations,” explained the statement.
SUDEBAN explained that the amounts in foreign currency that will be destined for intermediation will not go to the applicants of the financing, but to increase the offer in the exchange market.
The agency stated that this measure will increase the available bank credit and will also increase the availability of foreign currency at the foreign exchange desks.
Details of the measure
The institution clarified that with said measure the percentage of resources subject to the intermediation of the free convertibility accounts was increased from 10% to 30%.
“It is reiterated what is indicated in the circular distinguished with the nomenclature SIB-DSB-CJ-OD-00240, dated January 14, 2021, issued by this regulatory entity, regarding the obligation of the banking institutions to have the prior authorization of this Superintendency to offer and promote to its clients and/or users, its products, instruments or financial services; as well as, that of the Central Bank of Venezuela, when the same contain particular characteristics that oblige it to require such authorization,” warned SUDEBAN.
Likewise, the statement indicated that the national banks that intend to carry out the referred lending operations must submit to the Superintendency the types of lending operations indicated in article 5 of the aforementioned Resolution No. 22-03-01, for its corresponding approval.
Legal reserve in Venezuela
Although SUDEBAN will allow banks to offer credits in bolivars, the legal reserve in Venezuela remains one of the highest in Latin America. This has limited banks from granting credit to their users.
Restrictions on access to credit have been carried out through the legal reserve, which currently stands at 73%, forcing public and private banks to redirect most of their bolivars to the Venezuelan Central Bank as a deposit for their clients.
The legal reserve is a percentage that banks must have in reserves in the Venezuelan Central Bank of their deposits. The higher the legal reserve requirement, the more difficult it is for banks to have availability of such reserves to grant credits and loans.
About the Venezuelan banking system
Venezuelan banking is a financial services industry that offers a wide variety of products and services. It is structured into a network of private banking entities, state-owned banks and savings banks, in addition to a variety of specialized financial institutions.
These entities offer a wide range of financial products and services, such as loans, deposits, credit cards, savings accounts, insurance and remittance services. Venezuelan banks are also involved in the capital markets, providing investment and portfolio management services.
The regulatory structure for the supervision and control of financial institutions is efficient. The Venezuelan Central Bank is the main banking regulator and is responsible for guaranteeing the country’s financial stability. Venezuelan banking is adapting to changes in the global financial environment and offers innovative solutions to meet the needs of its clients.
Venezuelan banking has been affected by the economic and political crisis that has affected the country in recent years, which has led to a reduction in the number of financial institutions and the services they offer. However, Venezuelan banking continues to be an important sector of the country’s economic development.
F.A.Q. Venezuelan banking system
What is the best bank in Venezuela?
There is no single answer to this question, as it depends on each person’s requirements. The main banks in Venezuela include Banco de Venezuela, Banesco, Mercantil, Banco Provincial, Banco del Tesoro, Banco Activo, Banco Fondo Común, Banco Bicentenario and Banco BOD.
What happened to the banks in Venezuela?
In recent years, banks in Venezuela have faced many difficulties, including runaway inflation, foreign currency shortages, devaluation of the local currency, exchange control, price controls and increased taxes.
Consequently, this has led to a significant reduction in the funds available for banking operations, resulting in a decrease in the financial products offered to customers. In addition, increased insecurity has affected banks, as many people have opted to withdraw their savings in cash.
This scenario has led to a reduction in loans granted by banks, which has made access to credit more difficult for individuals and companies.
Can I Zelle someone in Venezuela?
No, Zelle is not available in Venezuela. Zelle is an online payment platform designed to facilitate the exchange of money between individuals. This platform can connect to most major banks and credit card providers in the United States only, allowing users to transfer money between them quickly and securely. Despite of this fact, in practice, Venezuelans who have previously opened a bank account in the U.S. can send and receive payments via Zelle and convert them to local currency.
Is it illegal for a U.S. citizen to have a foreign bank account in Venezuela?
No, there is no law prohibiting U.S. citizens from holding bank accounts in Venezuela. However, due to the financial sanctions imposed by the United States on Venezuela, U.S. banks may be restricting the ability of U.S. citizens to open bank accounts in Venezuela.
It is important to note that U.S. citizens may still be responsible for reporting income earned from a foreign bank account on their tax returns.