Banking Board of Ecuador

RESOLUTION No. JB-2015-3384

THE BANKING BOARD

CONSIDERING:

THAT by letter No. BP-UAC-2013-0936 dated September 18, 2013, signed by Mr. Diego Andrade Carrera, authorized signatory of Banco Pichincha C.A., the elimination of protested check No. 395 was requested, as indicated in the aforementioned letter: "...due to insufficient funds generated in checking account No. 2100018033, whose holder is Mr. Jorge Benjamín Redrovan Reyes...";

THAT the National Directorate of Studies and Information, after its analysis, determined the existence of an error in the processing of the payment of check No. 395, and therefore by letter No. DNEI-SES-2013-0732 dated October 29, 2013, resolved to impose a fine of USD $131.44 (one hundred thirty-one and 44/100 United States dollars) on Mr. Simón Acosta Espinosa, in accordance with the provisions of Article 83, Chapter III, Title XXIV, Book I of the Codification of Resolutions of the Superintendence of Banks and Insurance and the Banking Board;

THAT by written submission dated November 7, 2013, entered into this control body and signed by Mr. Antonio Acosta Espinosa, Adjunct President of Banco Pichincha C.A., an appeal for reconsideration was filed against the administrative act contained in letter No. DNEI-SES-2013-0732 dated October 29, 2013, in order to have the fine of USD $131.44 (one hundred thirty-one and 44/100 United States dollars) imposed on Mr. Simón Acosta Espinosa, Legal Representative of Banco Pichincha C.A., declared null;

THAT by letter No. DNEI-SES-2013-0791 dated December 11, 2013, the National Directorate of Studies and Information provided a response to the aforementioned appeal for reconsideration, rejecting it and confirming the administrative act contained in letter No. DNEI-SES-2013-0732 dated October 29, 2013, based on the motivation contained therein;

THAT by written submission entered into this Superintendence on December 23, 2013, Mr. Antonio Acosta Espinosa, Adjunct President of Banco Pichincha C.A., with the professional sponsorship of Dr. Pablo Cadena Merlo, filed before the Banking Board a review appeal against the administrative act contained in letter No. DNEI-SES-2013-0791 dated December 11, 2013;

THAT the aforementioned appeal was accepted for processing by Lic. Pablo Cobo Luna, Secretary of the Banking Board, by letter No. JB-2014-050, dated January 7, 2014;

THAT the appellant, in his written submission, argues that:

• "The aforementioned protest originated from a specific mishap in the processing impossible to foresee by the Institution, that is, a case of force majeure that could not be avoided, which is why the elimination of the protest was requested from the Control Body"
• "(...) the type detailed for the application of a sanction does not fit the fact that occurred. That is to say, there have been no breach of laws or regulations on the part of my represented party. Since there is no sustainable basis, no sanction is warranted."

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• "...that the administrative act contained in letter No. DNEI-SES-2013-0791 dated December 11, 2013, signed by Msc. Daniel Torresano Melo, National Director of Studies and Information, be REVOKED, by which means the appeal for reconsideration was rejected through which my represented party challenged the administrative act contained in letter No. DNEI-SES-2013-0732, by which in turn the fine of USD $131.44 (one hundred thirty-one United States dollars with 44/100) was resolved to be imposed on Mr. Simón Acosta Espinosa, in his capacity as Legal Representative of Banco Pichincha C.A."

THAT as indicated in letter No. DNEI-SES-2013-0732 dated October 29, 2013, by letter No. BP-UAC-2013-0936 dated September 18, 2013, Mr. Diego Andrade, Authorized Signatory of Banco Pichincha C.A., requested the elimination of protested check No. 395, as indicated in the aforementioned letter "...due to insufficient funds generated in checking account No. 2100018033, whose holder is Mr. Jorge Benjamín Redrovan Reyes...";

THAT under the argument of Mr. Andrade; the protest of check No. 395 was due to a specific mishap in the processing of the payment of the checks, which resulted in said protested check being erroneously registered in checking account No. 2100018033 belonging to Mr. Jorge Benjamín Redrovan Reyes, when the check was drawn from checking account No. 2100010833 belonging to Mr. Miguel Ángel Yépez Alvarado, consequently the provision of Article 83, Chapter III, Title XXIV, Book I of the Codification of Resolutions of the Superintendence of Banks and Insurance and the Banking Board is applicable, which states:

"ARTICLE 83.- For the error in the protest of checks, as well as for any other contravention to the provisions of the Check Law and of this chapter by the banks or when there is no specific sanction for contraventions to the provisions of this chapter, they shall be sanctioned by the Superintendent of Banks and Insurance with a fine that will not be less than USD $131.44 and will not exceed USD $7,886.82, in accordance with the provisions of Article 134 of the General Law of Institutions of the Financial System. The gravity of the infraction shall be appreciated by the Superintendent or his delegate, considering the circumstances of the fact."

THAT regarding the present case, it is necessary to point out that Article 3, Section II, Chapter I, Title X, Book I, of the aforementioned codification establishes:

"ARTICLE 3.- The institutions of the financial system have the responsibility to administer their risks, to which effect they must have formal processes of comprehensive risk management that allow identifying, measuring, controlling/mitigating, and monitoring the risk exposures they are assuming. (...)"

THAT consequently, the imposition of the fine in the amount of USD $131.44 contained in letter No. DNEI-SES-2013-0732 dated October 29, 2013, is duly founded; as indicated, the arguments expressed by the appellant do not disprove the foundations of the issuance of the challenged letter No. DNEI-SES-2013-0791 dated December 11, 2013;

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THAT regarding this matter, Articles 1 and 180 letter b) of the General Law of Institutions of the Financial System, in their pertinent part, state that, on the one hand, this control body is in charge of the supervision and control of the financial system, in all of which the protection of the interests of the public is taken into account; and, on the other hand, it states the functions and attributions that the Superintendent of Banks has, among which is to supervise the correct functioning of the institutions of the financial system, so that they comply with the norms governing their activity, in accordance with international best practices, and that allow verifying the truthfulness of the information they generate, among others;

THAT the arguments contained in the analysis of this memorandum are those that support the conclusion and recommendation indicated below;

THAT the National Legal Intendancy, by memorandum INJ-DNJ-SAL-2014-0517 dated July 14, 2014, recommended to the Banking Board to reject the claim contained in the review appeal filed;

AND, in exercise of its legal attributions,

RESOLVES:

SINGLE ARTICLE.- REJECT the claim contained in the review appeal filed by Mr. Antonio Acosta Espinosa, Adjunct President of Banco Pichincha C.A.; and, consequently, CONFIRM letter No. DNEI-SES-2013-0791 dated December 11, 2013, by which the National Director of Studies and Information rejected the appeal for reconsideration and ratified the administrative act contained in letter No. DNEI-SES-2013-0732 dated October 29, 2013, by which this control body imposed a fine of USD $131.44 (one hundred thirty-one and 44/100 United States dollars) on Mr. Simón Acosta Espinosa, in his capacity as Legal Representative of Banco Pichincha C.A.

NOTIFY.- Given at the Superintendence of Banks, in Quito, Metropolitan District, on the thirtieth day of April of two thousand fifteen.

Signature: Econ. Rodrigo Landeta Parra
GENERAL INTENDENT, S.
PRESIDENT OF THE BANKING BOARD, E

I CERTIFY.- Quito, Metropolitan District, on the thirtieth day of April of two thousand fifteen.

Signature: Lic. Pablo Cobo Luna
SECRETARY OF THE BANKING BOARD