Financial System: Warning by Bill

In the Honduran Congress there is a bill that seeks to prohibit banks and finance companies from capitalizing interest on payments not made from March 2020 to December 2021, a measure that worries the sector.

Friday, October 9, 2020

The initiative was sent by the Executive to the National Congress months ago. The purpose of the bill, which is called "Financial Plan of Solidarity Rescue", is to benefit people and companies that were affected by the spread of covid-19, with the payment of their debts.

At the end of August, President Juan Orlando Hernández, through an official statement, urged the National Congress to approve the bill as soon as possible.

See "Financial Services: Business Potential in Central America"

The initiative in the hands of the Legislative prohibits banks and financial institutions from capitalizing interest on payments not made from March 2020 to December 2021. For this same period, it also prevents the application of moratorium charges, for services or any other additional cost to the interest rate, including that of credit cards.

Laprensa.hn reviews that "... the proposal establishes maximum monthly rates of 2% for credit cards and 1% for loans granted by financial institutions (lowering the average rate from 30% to 12% per year), according to a presentation made by the Secretariat of State of the Presidency."

The article adds that "... economists and businessmen consider that the project would be going against the market economy and ask for prudence to avoid a systemic risk and urge to watch over the stability of the financial system, since the money they handle belongs to all savers."

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