Changes in Banking Regulations in Costa Rica

Tighter analysis of customers and better control of risk in lending are part of the changes that are being prepared by the financial regulator.

Friday, February 28, 2014

In 2013 the General Superintendence of Financial Entities (Sugef) began a process of regulatory changes for banks to continue during 2014. Tighter analysis of customers and better control of risk when granting loans are some of the changes being contemplated.

Javier Cascante, chief of the Sugef told Nacion.com that "the goal is to have a safe and stable financial system."

"One of the main changes was the requirement to perform a so-called "stress test" an analysis of affordability that will apply to all customers as of March 2015. In the past it was only carried out on those applying for a loan larger than $120,000. "

Moreover, "Sugef will send at least a dozen regulations, during the year, for approval by the National Council of Supervision of the Financial System(Conassif).

José Luis Arce, president of Conassif said: "Financial regulation is somehow an unpopular subject, a lot of the time it would be good for us to adopt measures that are expensive for banks in the short term but mean a benefit for society in the future.








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The amendment to the Law 8204 which is under public consultation in Costa Rica requires banks to refuse to open accounts for companies that can not justify the origin of their funds.

The new legislation also requires banks to ask companies for tax returns on income earned in the past two years and close accounts suspected of money laundering and terrorist financing.

Costa Rica: More Filters for Lending

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Credit histories of businesses and individuals will be more thoroughly reviewed, as well as their actual repayment capacity.

"We want entities to analyze peoples's debts with everyone, because they may have a loan here and there, and in the end owe millions," said Javier Cascante, chief of the General Superintendence of Financial Entities (Sugef).

Tighter Rules for Credit in Dollars

May 2013

The Sugef in Costa Rica has demanded tighter controls on banks when lending in dollars.

As part of the measures proposed by the Superintendent of Financial Institutions (Sugef), financial institutions must conduct a capacity analysis on the borrower, as well as requiring collateral and credit history, a test now only done when the loan is for more than $130,000.

Development Banking Requirements Made More Flexible

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The definition of the conditions and requirements for customers will be the responsibility of each entity, as determined in its policies and risk analysis.

The National Council of Financial System Supervision (CONASSIF) approved from Tuesday, 15 to 10 changes to the standard established by the Superintendent of Financial Institutions (SUGEF) under the Regulation for qualifying borrowers with resources granted by the Banking System Development Act 8634, which states: "It is the responsibility of the Board of Directors or equivalent governing body of each financial institution, to approve the policies, processes and controls which will be used to identify, measure and manage the risks associated with credit operations, and resources granted by the Banking System Development Act 8634 ".

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