The Salvadoran private sector has asked that the deadline be extended to meet the requirements under the new legislation against money laundering, including having a compliance officer in each company.
Companies who in January 2016 do not have a compliance officer and a deputy on their payroll, will be in breach of the law against money laundering and may be unable to take out loans and conduct other banking operations.
The Banking Association has confirmed that the entities will not provide the Superintendent of Financial System with information requested from them on the 100 largest depositors of each entity.
Armando Arias, president of the Salvadoran Banking Association, said in an article on Elsalvador.com that "... they will respect the secrecy provisions of the Law on Banks and will not give to the Superintendency of the Financial System (SSF) confidential information on depositors, as this entity has requested."
Banks in El Salvador, barred by law from charging management fees, offset their lower revenues by raising interest rates.
According to the president of the Salvadoran Banking Association (Abansa) Armando Arias, "commission (for administration) has been transferred to interest rates." "What they (the banks) have probably done is to take (for example) the $8 which was previously charged as commission and move it across to the nominal interest rate," said the head of Abansa.
With the growing demand for bilingual staff, private organizations and government agencies have created a program entitled "English Training for Call Centers".
The project, by nature public / private, aims to bring some 400 new employees who are bilingual in English / Spanish into the job market .
The growth of the call center industry has been maintained since 2005 at a rate of 29% per annum despite the lack of qualified bilingual staff.
El Salvador's 'Casa para Todos' scheme supported by president Mauricio Funes will be relaunched on 9 September with five new projects.
With financing coming from the People's Housing Fund (Fonavipo) and the Social Housing Fund (FSV) the five new projects will provide 942 homes for which construction is expected to be completed by the end of 2011.
"President Funes explained that Fonavipo will be leading the works in which around $80 million will be invested, creating 45,000 new direct and indirect jobs in the construction sector, the one most seriously affected by the economic crisis," reports Elmundo.com.sv.
The leading Central American banks believe that the presence of the Colombian financial holding group will bring greater dynamism to the market.
Nacion.com reports that most bankers drew attention to the group’s size and its success in Colombia.
Armando Arias, president of the Salvadoran banking association (ABANSA), commented that, “the arrival of such a large group is good news for Central America.
The banking sector disagrees with a bankruptcy bill that would generally benefit debtors.
ABANSA, the Salvadoran Banking Association, has asked the SSF, the superintendence of the financial system, to introduce more flexibility in the debtor’s classification section of the bill.
“By making this rule more flexible for a year, we will be able to refinance or restructure loans for those owing $100.000 or less”, explained Armando Arias, chairman of ABANSA.
The financial private sector created the Chamber of Associations of the Financial Sector of El Salvador.
It aims to group all the country’s financial associations and interact with the future single superintendence, which will combine the three that exist now.
It is composed of the banking, pensions, insurance and stock brokers associations (Abansa, Asafondos, ASES and Acabolsa).
Banks in El Salvador remarked they have resources to boost the country’s economic recovery and lend them to companies.
Armando Arias, president of the Salvadoran Banking Association (ABANSA), explained they now have enough liquidity to assist the country in its economic recovery, thanks to being very cautious during the crisis.
“We have between $800 million and $1.000 million ready, we need investors to submit viable projects”, said Arias.
Private banks will present recommendations and observations to improve access to credit for SMEs.
Armando Arias, president of the Salvadoran Banking Association (ABANSA), explained that after a crisis all regulation must be reviewed.
“We are conducting a global and integral analysis of credit for SMEs, from the moment they request a loan to when they pay, either willingly or through other mechanisms”, reported Laprensagrafica.com.
During 2009, the banks’ credit portfolio lost $583.5 million; it is the first reduction in 5 years.
By the end of 2009, banks had $8.6 billion in loans, down from $9.2 billion at the end of 2008.
“Armando Arias, president of the Salvadoran Banking Association (ABANSA), explained that the contraction is relative higher than the performance of the economy, which shrank 3.3%”, reported Laprensagrafica.com.
The Banking Association remarked there is room for improvement in the credit card law recently approved by Congress.
Armando Arias, head of the Association, argues the law needs to better define how to calculate effective rates.
Laprensagrafica.com reported: "The deadline for credit card issuers to modernize their information systems is another point in need of clarification, argued Arias.
A credit card law proposal being studied by the Legislative Assembly would set a maximum interest rate of 22%.
Both the Banking Association of El Salvador (ABANSA), and the National Private Enterprise Association (ANEP), support the creation of a credit card law, that would provide greater transparency to the market, but disagree in regulating interest rates.
Commercial Banks have authorized short term loans to builders for the construction of 5000 homes.
In response to the ‘anti-crisis plan’ announced by President Mauricio Funes on Thursday June 18th, the Salvadoran Banking Association (Abansa) will be authorizing construction loans for $50 million.
According to Elsalvador.com, Abansa’s President Armando Arias said, “the plan is still in the internal evaluation phase.
After two years of proceedings before financial authorities, the bank will start operations next July.
The president of the Salvadoran Banking Association (ABANSE), Armando Arias, pointed out the benefits to the consumer with new financial institution entering the market.
Guadalupe Hernández wrote in Elsalvador.com: "The Azteca Bank was born in 2002 as a multiple-banking institution, and it has come to establish itself as one of the five largest in Mexico. It belongs to Grupo Salinas, which is also one of the largest business conglomerates in that country. The market niche in which the institution is working is mortgage financing and consumer loans for the middle and working class."
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