The Central Bank announced that the daily legal reserve requirement will now be 12%, while it now stands at 16.25% weekly.
According to Antenor Rosales, president of the Bank, financial institutions must maintain a minimum reserve of 15% biweekly and a daily minimum reserve of 12%.
Economist Rene Vallecillo spoke to El Nuevo Diario de Nicaragua on the economic effects this can produce.
The banking regulator has requested shareholders to begin the liquidation process of the financial institution.
The head of Nicaragua's Banking and Finance Regulator (SIBOIF), Víctor Urcuyo, has said that the decision does not impact on the bank's customers since, "the vast majority have already received their money".
La Prensa reports comments from the Nicaraguan Central Bank's president, Antenor Rosales: "The social contract will be disolved, assets liquidated and the company's register deleted. The subsequent liquidation process should take longer than a year".
The Central Bank (BCN) informed that in the last five months, the bank has seen its deposits fell 65.78%
Antenor Rosales, BCN president, explained that customers withdrew $25 million in this period, and the bank currently has just $13 million in deposits.
Rosales added that the process of customers withdrawing their money from the bank has been “traumatic”, but they expect it to continue without incidents, reported newspaper la Prensa.
In the past 11 months, the credit card industry shrank by $2.49 million.
In April 2009 credit card companies had clients for $19 million; this figure has dropped to $16.51 million, a 13% reduction.
Antenor Rosales, president of the Central Bank of Nicaragua, asked the Banking Superintendence to ‘pay special attention’ to the situation, and conduct ‘an assessment of credit cards’. Such study would be available on mid April.
With the creation of a Special Assistance Line (Lafex), the Central Bank could rescue domestic financial institutions that are having liquidity problems.
Antenor Rosales told Laprensa.com.ni: "It is one of the efforts of the Government, particularly the Nicaraguan Central Bank, to ensure all measures that guarantee a financial system that has solvency and liquidity.