Nicaragua: Less Correspondent Banking

According to the nicaraguan regulator, the increasing amount of regulation and anti-money laundering controls that the US banks are subject to, has led some of them to remove their correspondent agencies from the country.

Thursday, April 21, 2016

The president of the Association of Private Banks in Nicaragua (Asobanp), Juan Carlos Arguello, said in an article on that "... some banks in the United States and Europe have reduced the number of banking correspondents as part of changes in their strategies worldwide, which are largely due to new regulatory requirements. "

The head of the Superintendency of Banks and Other Financial Institutions (Siboif), Victor Urcuyos, explained that tougher controls for US banks, "raises the cost of maintaining a correspondent abroad". In the presentation of its 2015 annual report to the National Assembly on April 6, Urcuyos explained that because of this, banks must determine "... 'in Nicaragua which banks are the most profitable for them, that is to say the most engaged in foreign trade to finance their own activities in this activity.'"

"... Luis Rivas Anduray, executive director and general manager of Banco de la Producción (Banpro), the affectation that causes the closure correspondents is not so much to do with profitability, but commercial issues. This is because through these correspondents commercial transactions, transfers, purchases of imports and exports sales are made. "

Bank executives believe that this situation represents an opportunity for local banks, which will have to make the necessary investments to comply with the regulation and controls in order to service the foreign trade operations made by Nicaraguan companies.

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