Ley No. 316, Ley de la Superintendencia de Bancos y de Otras Instituciones Financieras (La Gaceta, Diario Oficial No. 196, 14 de octubre de 1999) (Law No. 316, Law of the Superintendency of Banks and Other Financial Institutions)

English translation of the Spanish text from bcn.gob.ni (the Spanish text is the official one). Retrieved 2026-10-26.

Law No.316 LAW No. 316 LAW OF THE SUPERINTENDENCY OF BANKS AND OTHER FINANCIAL INSTITUTIONS and its Reforms Law No. 552, Law No. 564 and Law No. 576 (Published in La Gaceta, Official Daily No.196 of 14, October 1999 ) and Reforms Law No. 552 of the day 31/08/05 Gaceta No. 169, Law No. 564 of the day 24/11/05, Gaceta No. 228 and Law No. 576 of the day 22/03/06 Gaceta No. 58

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Main Banking Laws of Nicaragua Law of the Superintendency of Banks Law 316 THE PRESIDENT OF THE REPUBLIC OF NICARAGUA Makes known to the Nicaraguan people That:

THE NATIONAL ASSEMBLY OF THE REPUBLIC OF NICARAGUA In use of the faculties;

HAS DECREED The following:

LAW OF THE SUPERINTENDENCY OF BANKS AND OTHER FINANCIAL INSTITUTIONS

CHAPTER I OBJECT OF THE LAW AND FUNCTIONS

Art. 1 The object of this Law is to regulate the functioning of the Superintendency of Banks and Other Financial Institutions, hereinafter simply referred to as “The Superintendency”, an Autonomous Institution of the State with full legal capacity to acquire rights and contract obligations with respect to those acts or contracts that are necessary for the fulfillment of the objective established in this Law. For all legal purposes it must be understood that the legal existence of the Superintendency created by Law Number 125 of the twenty-first of March of one thousand nine hundred and ninety-one and published in La Gaceta, Official Daily Number 64 of the tenth of April of the same year, has remained without interruption since the entry into force of the aforementioned Law Number 125.

Art. 2 The Superintendency shall watch over the interests of the depositors who entrust their funds to the Financial Institutions, legally authorized to receive them, and preserve the security and confidence of the public in said institutions;

promoting adequate supervision that seeks their solvency and liquidity in the intermediation of the resources entrusted to them.

3 Central Bank of Nicaragua The Superintendency has the responsibility to authorize, supervise, oversee and inspect the constitution and functioning of all banks, branches and banking agencies that operate in the country, whether they are state or private entities, national or foreign, that habitually engage directly or indirectly in activities of intermediation between the supply and demand of financial resources or in the provision of other banking services.

The Superintendency shall also authorize, supervise, oversee and inspect non-banking financial institutions, that operate with public resources under the terms established in the General Law of Banks, Non-Banking Financial Institutions and Financial Groups.

The Superintendency shall also authorize, supervise, oversee and inspect the non-Banking Financial Institutions whose functioning corresponds to be regulated by special laws.

The Superintendency shall exercise in a consolidated manner the supervision, oversight and inspection of financial groups, as well as the other faculties that correspond to it in relation to such groups, under the terms provided in the law.

CHAPTER II ATTRIBUTIONS

Art. 31/ For the fulfillment of its purposes, the Superintendency shall have the following attributions:

1. Resolve the applications presented by natural or legal persons, national or foreign, to constitute and put into operation new banks, branches and banking agencies and other institutions referred to in the previous Article.

2. Supervise, inspect, oversee and control the functioning of all entities under its scope of action.

3. Regulate capital adequacy, credit concentration, credit to related parties and the classification and provisioning of portfolio.

4. Enforce the special and general laws and the regulatory norms that govern the constitution, transformation, dissolution and liquidation of the institutions subject to its supervision, inspection, oversight and control.

5. Resolve the intervention of any bank or non-banking financial entity, in the cases contemplated by the law.

1/ Reformed by Law No. 552, of the day 31/08/05, Gaceta No.169

Main Banking Laws of Nicaragua Law of the Superintendency of Banks

6. Request the forced liquidation of any bank or non-banking financial entity under its supervision, inspection, oversight, and control, in the cases contemplated by the law, and execute it when the law attributes that faculty to it.

7. Enforce the provisions to which the supervised, inspected, overseen, and controlled entities are obligated in accordance with this Law, the Law of the Deposit Guarantee System, the Organic Law of the Central Bank of Nicaragua and the norms derived from these, and impose administrative sanctions for non-compliance with said laws and norms.

8. Make public the name or corporate name of the entities subject to its supervision, inspection, oversight and control, in accordance with Article 2 of this Law, as well as the list of Directors with their legal particulars and the positions they hold.

9. Require from the banks and other supervised, inspected, overseen and controlled institutions, the reports and information it needs for the fulfillment of its functions.

10. Regularly inspect the institutions that correspond to it, oversee and carry out audits and other convenient verifications through the personnel of the Superintendency or the duly contracted for such purpose. In this case the personnel is obligated to observe banking secrecy, under penalty of civil and criminal liabilities as the case may be. These inspections, audits and verifications must be carried out at least once a year and may be carried out without prior notice to the institutions to be inspected.

11. Declare without legal value and without corporate and legal effects the appointments of the Directors, the General Manager or the Principal Executive and the Internal Auditor of the Financial Institutions subject to its supervision, inspection, oversight, and auditing, if they do not meet the requirements of law. Likewise, it may order the dismissal of the Directors and officials of the Institutions subject to its competence, for irregularities committed in the exercise of their functions in accordance with this Law, all without prejudice to the corresponding civil or criminal liabilities.

12. Issue to the institutions subject to its supervision, inspection, oversight and auditing, the necessary instructions to remedy the deficiencies or irregularities found and adopt the measures that are within its competence to administratively sanction and correct the infractions that may have been committed.

13. Issue the norms and provisions necessary for compliance with the purpose of this Law.

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14. In the name and on account of the respective entity, and with prior authorization of the Board of Directors of the Superintendency of Banks and Other Financial Institutions, contract auditing services for special cases, when it considers it necessary for the better performance of its functions, without prejudice to the legal provisions in force. If the situation justifies it, the Superintendent will follow the procedure established in

Article 169 of the General Law of Banks, Non-Bank Financial Institutions and Financial Groups, to make the payment effective.

15. Sign information exchange and cooperation agreements with foreign financial supervision organizations or groups of organizations.

16. Carry out all those activities compatible with its nature and any other that the laws provide.

The Superintendency of Banks shall have exclusive competence in the exercise of its legal powers of supervision, inspection, oversight and auditing of the entities referred to in this Law, to the exclusion of any other administrative or control authority. The foregoing without prejudice to the obligation of the Superintendent to report on its management to the National Assembly.

The Comptroller General of the Republic shall exercise its auditing function with respect to the Superintendency of Banks, only insofar as it refers to the administration of its budget.

CHAPTER III DIRECTION AND ADMINISTRATION

Art. 4 The Superintendency of Banks and Other Financial Institutions has as its superior organs a Board of Directors, a Superintendent and a Vice-Superintendent.

The Board of Directors is the organ responsible for the activity of issuing the general norms applicable to banks, non-bank financial institutions and financial groups. The Superintendent shall be responsible for enforcing the general norms issued by the Board of Directors, as well as the administration and management of the Superintendency's own affairs, and shall hold its representation, in the terms that the law establishes for each of these organs.

In the absence of the Superintendent, the Vice-Superintendent shall replace him in his attributions.

Principal Banking Laws of Nicaragua Law of the Superintendency of Banks

Art. 52/ The Board of Directors of the Superintendency is composed of the President of the Central Bank of Nicaragua who presides over it, the Superintendent of Banks and four members with their respective alternates appointed by the President of the Republic in consultation with the private sector and ratified by the National Assembly.

Said members, as well as their alternates, shall be appointed in accordance with the provisions of Article 31 of this Law and to be appointed they must meet the same requirements demanded to perform the position of Superintendent.

The General Manager of the Central Bank of Nicaragua shall be the alternate of the President of said institution and in his absence shall replace him as President of the Board of Directors.

The Vice-Superintendent of Banks shall be the alternate of the Superintendent of Banks.

The Vice-Superintendent shall attend the meetings of the Board with voice but without vote, except in case of absence of the Superintendent, in which case he shall have voice and vote. In the absence of a principal member, his respective alternate shall replace him.

In the presence of the principal member, the alternate members may attend the sessions of the Board but without voice and without vote.

Art. 63/ The following are disqualified from being members of the Board:

1. Those who hold other positions within the public sector, with the exception of the Superintendent of Banks, the President of the Central Bank and their respective alternates.

2. Those who perform advisory or consulting functions for financial entities or hold positions that could represent a possible conflict of interest with their attributions as Director.

3. Those who are directors, officials, employees or shareholders of any of the institutions that are under the supervision, inspection, oversight, and auditing of the Superintendency.

4. Persons who are delinquent debtors of any banking or financial institution and those who have been declared in a state of bankruptcy.

5. Those who, directly or indirectly, are holders, partners or shareholders who have significant links in the terms established by 2/ Reformed by Law No. 564, of the day 24/11/05, Gazette No. 228.

3/ Reformed by Law No. 564, of the day 24/11/05, Gazette No. 228.

Banco Central de Nicaragua General Law of Banks, Non-Bank Financial Institutions and Financial Groups, with the company that has credits overdue for more than sixty days, or that have entered judicial collection of any institution of the financial system.

6. Members who are related to each other, within the fourth degree of consanguinity or second degree of affinity, or are spouses or companions in a stable de facto union, of another member, or with any director or principal officer of the supervised entities.

7. Persons who hold positions of popular election.

8. Those who have been administratively or judicially convicted, for their participation in serious violence against financial laws and regulations.

Those who in the performance of the position lose these conditions.

Art. 74/ The Superintendent of Banks, the President of the Central Bank of Nicaragua and their respective alternates shall not earn per diem for their participation in the Council. Attendance of the principal members at the sessions of the Board of Directors is mandatory, and it is also mandatory for the alternate members when they are summoned to join the Council due to the absence of the principal member. The quorum of the Council shall be formed with the presence of four of its members.

All of them shall have the power of initiative to introduce proposals, which must be presented before the Secretariat, where they shall be given the corresponding processing before the Council. The resolutions of the Council shall be adopted by absolute majority of the total of the members present; in case of a tie, its President shall have a casting vote.

The Internal Regulations of the Board of Directors shall establish, among others: The causes that justify the absences of its principal members, the cases in which the alternates are incorporated and the form and procedure to do so. It must also establish the functions and powers of the Secretariat of the Council and who shall hold said position.

In the event that judicial proceedings are initiated, including amparo remedies against the Board of Directors or its members, for their actions in that capacity, by operation of law they shall be legally represented by the President of the Board of Directors. Criminal cases are excepted.

Art. 8 In addition to the organs established in Article 4 of this Law, the Superintendency of Banks shall have four specialized Intendancies, which shall be:

4/ Amended by Law No. 564, of the day 24/11/05, Gazette No. 228

Principal Banking Laws of Nicaragua Law of the Superintendency of Banks

1. Intendancy of Banks and other Financial Institutions.

2. Intendancy of Securities.

3. Intendancy of Insurance.

4. Intendancy of General Deposit Warehouses.

In addition to these Intendancies, the Board of Directors of the Superintendency, at the request of the Superintendent, shall have the power to authorize the creation and organization of other intendancies.

Art. 9 The Intendants shall be appointed by the Superintendent and must meet the same requirements demanded to be Superintendent or Vice-Superintendent.

CHAPTER IV POWERS OF THE BOARD OF DIRECTORS

Art. 105/ It corresponds to the Board of Directors of the Superintendency:

1. To issue general rules to strengthen and preserve the security and confidence of the public in the institutions under the supervision, inspection, oversight and auditing of the Superintendency.

2. To issue general rules that promote adequate, agile, modern and practical supervision over the institutions subject to the supervision, inspection, oversight and auditing of the Superintendency.

3. To issue general rules to avoid or correct irregularities or faults in the operation or the transactions of the Financial Institutions that, in the judgment of the Board of Directors, could endanger the interests of depositors, the stability of any Institution or the soundness of the Financial System.

4. To authorize the incorporation of the new institutions referred to in

Article 2 of this Law, in accordance with the provisions established by the relevant law.

5. To approve general rules that ensure the lawful origin of the capital of the Financial Institutions and to prevent money laundering and other assets within the financial system and related sectors, such as credit card issuers, real estate agencies, vehicle leasing companies and lenders.

5/ Amended by Law No. 552, of the day 31/08/05, Gazette No. 169

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6. To approve general rules on required capital, financial groups and transactions, contracts and transactions with related parties, in accordance with the financial laws.

7. To approve the general criteria for evaluation and classification of risk assets, the guidelines for the constitution of reserves and provisions, the conditions for distribution of profits and everything related to risk rating agencies and appraisers.

8. To issue the necessary rules to prevent activities or transactions that harm third parties, or foster the concentration of risks; consequently it may, among others:

a) Establish the regulatory provisions to make effective the maximum limits of individual credit and investment, applicable to banks and non-bank financial institutions.

b) Establish regulations on contingent obligations.

c) Establish the capital reserves that in general or by categories of institutions are required.

d) Set the amount of general reserves for portfolio and investment cleanup.

9. To issue the necessary general rules tending to prevent the institutions under its jurisdiction from engaging in the realization of activities for which they were not authorized.

10. To establish rules on the internal and external audit of the institutions of the financial system, systems for the supply and obtaining of information and documentation requirements for files, records and archives of the supervised institutions.

11. To issue the rules related to the investments and deposits of the institutions in the country and abroad, as well as for the establishment of technical and mathematical reserves of the Insurance Institutions.

12. To have knowledge of the general situation of the financial system and the particular situation of the institutions under the supervision, inspection, oversight and audit of the Superintendency.

13. To order the intervention of any entity subject to the Oversight of the Superintendency or to request its dissolution or liquidation as applicable, in the case where, having incurred one of the grounds that would make such measures mandatory for the Superintendency, it has refused to execute it when the Council has

Principal Banking Laws of Nicaragua Law of the Superintendency of Banks formally requested. In this specific case, the Council shall hear directly and in a single instance the appeals that interested parties may file against its decision, and thus the administrative remedy shall be exhausted.

14. To hear on appeal the resolutions issued by the Superintendent of Banks in accordance with the provisions of Article 20 of this Law; in these cases the Superintendent must recuse himself from hearing and voting on that matter.

15. To authorize the Budget of Income and Expenditures of the Superintendency and to have knowledge of its settlement at the end of each fiscal year.

16. To have prior knowledge, for information purposes, of the annual report that the Superintendent will present to the National Assembly regarding his administrative management.

17. To carry out any other financial supervision provided for by the laws of the Republic and those that this Law assigns to the Superintendency, which are not expressly assigned to another organ or official thereof.

18. To issue its own internal regulations.

19. To respond to queries requested by third parties on legal and technical aspects related to the work of the institutions of the Financial System.

The provisions enumerated herein are not limiting and consequently the Council may carry out all those general regulatory activities compatible with the purpose of this Law.

Art. 11 The members of the Board of Directors may only be removed from their positions before the expiration of the corresponding legal term if any of the grounds mentioned in Art. 17 of this Law is present.

The invoked ground must be proven through the corresponding administrative summary proceeding, conducted by a Commission designated by the Board of Directors itself. The resolution of the Commission must be approved by at least four of the members of the Council, accompanied by the statements made by the accused, and shall be communicated to the President of the Republic for the corresponding final decision.

CHAPTER V OF THE SUPERINTENDENT AND THE DEPUTY SUPERINTENDENT

Art. 12 The Superintendent of Banks and Other Financial Institutions, hereinafter referred to as "The Superintendent", is the legal representative of the Superintendency and exercises its administration.

Central Bank of Nicaragua

Art. 13 The Deputy Superintendent shall assist the Superintendent in the exercise of his functions and shall replace him in case of absence or temporary impediment.

Art. 146/ The Superintendent and the Deputy Superintendent shall be elected by the National Assembly in accordance with the provisions of the Political Constitution of the Republic; they may be reelected for new terms. Both must be over thirty-five years of age at the time of their election, nationals of Nicaragua, in full enjoyment of their political and civil rights, university graduates, of recognized probity and experience in financial and administrative matters.

Art. 157/ The following persons may not be Superintendent or Deputy Superintendent:

1. Those who are relatives of the President of the Republic or of the members who make up the Board of Directors of the Superintendency within the fourth degree of consanguinity or second degree of affinity.

2. Those who hold positions in political parties or their structures, even if these are unpaid.

3. Those who hold another position within any of the Branches of the State.

4. Those who are directors, officials, employees, shareholders of any of the institutions subject to supervision, oversight and audit of the Superintendency.

5. Persons who are delinquent debtors of any banking or financial institution, or those who have been sanctioned in accordance with the Organic Law of the Comptroller General of the Republic.

6. Those who have been administratively or judicially convicted for serious violation of financial laws and regulations.

7. Those who have been convicted of crimes of a willful nature that merit penalties more than correctional.

Art. 16 In addition to the provisions of the previous article, the Deputy Superintendent may not be a relative of the Superintendent within the fourth degree of consanguinity or second degree of affinity.

Art. 17 The Superintendent and the Deputy Superintendent may only be removed from their positions for:

6/ Reformed by Law No. 576 of 22/03/06, Gazette No. 58 7/ Reformed by Law No. 552, of 31/08/05, Gazette No. 169

Principal Banking Laws of Nicaragua Law of the Superintendency of Banks

1. Serious faults committed in the exercise of their functions.

2. For actions that contravene the norms established in this Law.

3. When they are convicted by final judgment to a penalty of deprivation of liberty or disqualification from holding office.

4. Physical or mental incapacity for a period exceeding three months.

5. For refusing to comply with any resolution issued by the Board of Directors of the Superintendency within its competence.

6. For lack of probity in the exercise of their functions, and

7. For repeated non-attendance at the sessions of the Board of Directors.

The initiative for dismissal before the National Assembly of the aforementioned officials corresponds to the President of the Republic, following the substantiation of the summary proceeding and procedures established in the second paragraph of Article 11 of this Law.

Art. 18 The Superintendent and Vice-Superintendent shall take possession of their positions before the President of the National Assembly following the statutory oath.

CHAPTER VI FUNCTIONS OF THE SUPERINTENDENT AND THE VICE-SUPERINTENDENT

Art. 198/ It corresponds to the Superintendent:

1. To ensure the correct application of this Law, laws and regulations governing the activity of the institutions mentioned in its article 2 and in particular to ensure the correct application of the attributions enumerated in article 3 of the same.

2.9/ To resolve and execute the intervention or request the Forced Liquidation of the institutions mentioned in Art. 2 of this Law, in the cases in which the law confers that faculty upon them, without prejudice to the provisions of Art. 10 numeral 13 of the same.

3. To agree to the dismissal of any member of the Boards of Directors of the institutions under its supervision, inspection, vigilance and oversight 8/ Reformed by Law No. 552 of 31/08/05, Gazette No. 169 9/ Reformed by Law No. 576 of 22/03/06, Gazette No. 58

4 Central Bank of Nicaragua who are found responsible for serious infractions committed in the exercise of their functions.

To comply with and enforce the general laws, regulatory norms and provisions governing the constitution, operation, functioning, merger, dissolution and liquidation of institutions subject to the vigilance of the Superintendency.

4. To carry out the inspections, verifications and audits referred to in this Law.

5. To supervise banks, non-bank financial institutions and financial groups, through inspections, analysis of financial statements, transactions and relationships between companies of the group, both national and foreign.

6. To declare without legal value and without corporate and legal effects, the appointment of the officials referred to in numeral 11 of article 3 of this Law.

7. To enforce the resolutions of the Board of Directors of the Superintendency, of the Deposit Guarantee Fund, the monetary and exchange policy norms emanating from the Central Bank of Nicaragua.

8. To keep the Board informed of the results of the inspections and of all information related to the entities under the supervision, inspection, vigilance and oversight of the Superintendency, and must inform the Board of the general situation of the financial system and the particular situation of each of the entities.

9. To gather from banks, non-bank financial institutions and financial groups, on a confidential basis, the reports and information necessary to verify the state of their finances and determine their observance of the laws, regulations and provisions to which they are subject.

All documentation and information referred to in the preceding paragraph that is required by the Superintendent must be presented by the banks without alleging reservations of any nature.

1010/. To present to the Board of Directors for its approval, the budget of income and expenses of the Superintendency and render to this same Board, an account of its settlement at the end of each fiscal year.

11. To examine all financial or service operations of the institutions that are subject to supervision, and exercise the other functions of supervision, inspection, vigilance and oversight that correspond to it, in accordance with the laws, regulations and other applicable provisions.

10/ Reformed by Law No. 576 of 22/03/06, Gazette No. 58

Main Banking Laws of Nicaragua Law of the Superintendency of Banks

12. To delegate functions to the other officials and employees of the Superintendency within the framework of the law.

13. To establish prevention programs that allow knowledge of the financial situation of the institutions under its supervision.

14. To contract the services of firms of recognized prestige in auditing, actuarial science or finance, to collaborate in the functions of the Superintendency.

15. To verify compliance with the legal reserve requirement. In case of non-compliance, the Superintendent of Banks shall apply a fine, in accordance with the provisions of article 46 of the Organic Law of the Central Bank.

16. To present to the Board of Directors, initiatives of proposals for General Norms, within the scope of competence of the Superintendency.

17. To render an annual report to the National Assembly in accordance with the provisions of article 138 numeral 29 of the Political Constitution of the Republic.

18. To endeavor to ascertain the lawful origin of the resources that enter the capital of the supervised entities. For this purpose, any capital contribution or share transfer equal to or greater than 5% of the entity's capital, for its validity must have the authorization of the Superintendent. Transfers less than this percentage must be notified to said Official. The foregoing in accordance with the provisions of the General Law of Banks, Non-Bank Financial Institutions and Financial Groups.

19. To appoint and remove the officials and employees of the Superintendency.

To approve the training and professionalization plans for them.

20. The others that other laws assign to it.

It corresponds to the Vice-Superintendent:

To know permanently and in an updated manner the general situation of the financial system and the particular situation of the institutions under the supervision, inspection, vigilance and oversight of the Superintendency.

To substitute in all its attributions the Superintendent in the absence of the latter.

To assist the Superintendent in the ordinary exercise of its functions, when the latter requests it.

To attend to the inter-institutional cooperation of the Superintendency, by delegation of the Superintendent.

Central Bank of Nicaragua To direct and control compliance with the professional preparation and training plans of the officials of the Superintendency, by delegation of the Superintendent.

To perform the other functions that are delegated to it by the Superintendent within the framework of this Law.

CHAPTER VII ADMINISTRATIVE RESOURCES

Art. 2011/ Against the resolutions of the Superintendent, only the remedy of review shall be available within a term of ten business days from the date of notification.

The remedy of appeal shall be available from the resolution of the Superintendent on the remedy of review filed. This remedy shall be processed with devolutive effect before the Board of Directors. The term to file this appeal shall be five business days from the notification.

Art. 21 The Superintendent must request the opinion of the Board of Directors on matters of intervention or forced liquidation of banks or other financial institutions, which must be issued within a term no greater than 24 hours after being formally requested by the Superintendent. Once this term has elapsed, the Superintendent shall proceed with or without the opinion of the Board of Directors.

CHAPTER VIII FUNCTIONS OF THE INTENDANTS

Art. 22 Without prejudice to the powers specifically delegated to them by the Superintendent, in accordance with the area of their competence, the Intendants shall have the following functions:

a) Collaborate with the Superintendent in the management of the Superintendency, especially in the area of their competence.

b) Collaborate with the Superintendent in the analysis of applications relating to the operation of entities in the area of their competence submitted by interested persons.

c) Advise the Superintendent on applications for conversion, merger, voluntary dissolution or other important modifications of the institutions in their area, with the recommendations they consider pertinent.

The Intendants must inform the Superintendent, with the urgency 11/ Amended by Law No. 552, of 31/08/06, Gazette No. 169

Main Banking Laws of Nicaragua Law of the Superintendency of Banks that the case requires, on all matters referred to in this literal, expressing their opinion or recommendation on the same.

d) Execute, under the direction of the Superintendent, the functions assigned in relation to institutions in the area of their competence.

e) Coordinate with the other dependencies, the inspection and supervision actions.

f) Propose to the Superintendent the form of organization of the dependencies of the Intendancy under their responsibility, as well as the appointment of persons who must perform functions that require technical knowledge or special capacity.

CHAPTER IX FINAL PROVISIONS

Art. 23 The Board of Directors of the Superintendency of Banks shall update the amount of minimum share capital required at least every two years in case of exchange rate variations of the national currency, and must publish it in a newspaper of wide national circulation, without prejudice to its publication in La Gaceta, Official Gazette. Banks whose capitals are below the authorized minimum capital must adjust it within the term set by the Board of Directors of the Superintendency of Banks, in compliance with a normalization plan, whose duration may not exceed one year.

Art. 24 Banking institutions may not make references or cite in announcements or advertisements, the reports of inspectors or any other communication or reports coming directly or indirectly from the Superintendency, except as provided in general rules issued by the Board of Directors of the Superintendency.

Art. 2512/ All fines imposed by the Superintendent shall be paid in favor of the Treasury in accordance with the procedures indicated in the respective legal provisions.

In cases of non-compliance with the provisions contained in this Law, for which no special sanction has been established, the Superintendent may impose pecuniary sanctions adjusted to the importance of the fault, from five hundred (500.00) to fifty thousand fine units (50,000.00), as indicated in the general rule on the matter issued by the Board of Directors of the Superintendency of Banks, based on the General Law of Banks, non-bank financial institutions and financial groups.

12/ Amended by Law No. 552, of 31/08/05, Gazette No. 169

5 Central Bank of Nicaragua The value of each "fine unit" shall be the equivalent in national currency to one United States dollar, according to the official exchange rate established by the Central Bank of Nicaragua, in force at the date of the imposition of the sanction.

Art. 26 All institutions included in article 2 of this Law must publish quarterly reports on their placements, investments and other assets.

Art. 27 The personnel of the Superintendency may not request credits from banking and financial companies subject to its supervision, nor acquire goods from such companies without having previously obtained written permission from the Superintendent.

Nor may they receive directly or indirectly from those companies, or from the heads or employees thereof, money or objects of value as a gift or in any other form.

Art. 28 The Superintendent of Banks and Other Financial Institutions must present an annual report of its financial management before the National Assembly within the first two months of each year.

Art. 2913/ The institutions and natural and legal persons, who by this Law are subject to the supervision, inspection, vigilance and control of the Superintendency, shall contribute resources to cover its annual budget. The Central Bank shall contribute 25%. The supervised entities shall contribute in cash to cover the remaining 75% of said budget up to a maximum of 1.3 (one point three) per thousand of the assets or of a parameter determined by the Board of Directors of the Superintendency at the proposal of the Superintendent.

Both data shall be calculated based on the average observed over the last twelve months at the date of formulation of the budget.

Art. 3014/ The information obtained by the Direction and Administration bodies of the Superintendency, its officials and agents in the exercise of their functions, shall be strictly confidential. They may not reveal or comment on the data obtained or the facts observed, except in the fulfillment of their duties by reason of their position, by judicial order of a competent authority or according to the exceptions established in this or other laws.

Contravention of the prohibitions established in this article shall be considered a serious offense and shall motivate the immediate dismissal of those who incur in it, without prejudice to the responsibilities determined by the Penal Code for the crime of disclosure of secrets.

13/ Reformed by Law No. 552, of the day 31/08/05, Gazette No. 169 14/ Reformed by Law No. 552, of the day 31/08/05, Gazette No. 169

Principal Banking Laws of Nicaragua Law of the Superintendency of Banks Without prejudice to the foregoing, the Superintendency may publish through any means the following information of the supervised entities:

1. The financial statements with their respective indicators.

2. The stratifications of their operations.

3. The breakdown of the capital adequacy calculation.

4. Statistics of each of the supervised financial sectors.

5. Compliance with the legal reserve determined by the Central Bank.

6. Any other that the Board of Directors of the Superintendency authorizes.

Art. 3115/ The appointment of the four proprietary and alternate members of the Board of Directors referred to in article 5 of this Law, shall be for a period such that its expiration coincides with the middle of the following presidential period in Nicaragua.

Art. 32 In the event that the periods of the Superintendent of Banks or the Vice-Superintendent of Banks expire, without the National Assembly having elected their successor, said officials shall remain in the exercise of their positions until the corresponding election and taking of office occurs.

As long as the new members of the Board of Directors are not appointed, in accordance with Articles 5 and 31 of this Law, the members appointed in accordance with the previous law shall continue in their positions until the new appointments occur.

Art. 33 Law No. 125, of 21 March one thousand nine hundred ninety-one, published in La Gaceta, Official Gazette No. 64 of 10 April of the same year, is repealed, as well as Law No. 268, of 3 October one thousand nine hundred ninety-seven, published in La Gaceta, Official Gazette No. 218 of 14 November one thousand nine hundred ninety-seven.

Art. 34 This Law shall enter into force from its publication in "La Gaceta, Official Gazette." Given in the city of Managua, in the Session Hall of the National Assembly, on the twenty-ninth day of the month of September of one thousand nine hundred ninety-nine.

IVAN ESCOBAR FORNOS, President of the National Assembly. VICTOR MANUEL TALAVERA HUETE, Secretary of the National Assembly.

15/ Reformed Law No. 564, of the day 24/11/05, Gazette No. 228

5 Central Bank of Nicaragua Therefore: Let it be held as Law of the Republic, Publish and Execute. Managua, eleven of October of one thousand nine hundred ninety-nine. ARNOLDO ALEMAN LACAYO, President of the Republic.

*Incorporates Reforms Law No. 552 of the day 31/08/05 Gazette No. 169, Law No.

564 of the day 24/11/05, Gazette No. 228 and Law No. 576 of the day 22/03/06 Gazette No. 58.