Norm Reforming Article 11 of the Regulation on Requirements for the Establishment of Banks, Financial Companies, Branches of Foreign Banks, and Representative Offices

Resolution No. CD-SIBOIF-1054-1-MAY2-2018
Dated May 2, 2018

NORM REFORMING ARTICLE 11 OF THE REGULATION ON THE REQUIREMENTS FOR THE ESTABLISHMENT OF BANKS, FINANCIAL COMPANIES, BRANCHES OF FOREIGN BANKS, AND REPRESENTATIVE OFFICES

The Board of Directors of the Superintendence of Banks and Other Financial Institutions,

CONSIDERING

I

That Articles 4 through 8 of Law No. 561, the General Law of Banks, Non-Bank Financial Institutions, and Financial Groups (General Banks Law), published in La Gaceta, Official Journal No. 232, on November 30, 2005, establish the approval process for applications to establish a financial entity, as well as the requirements to be met to authorize its operation in cases where the application is approved, empowering the Board of Directors of the Superintendence to issue general application regulations indicating the information and documents that must be presented to prove compliance with the provisions of these articles.

II

That pursuant to the aforementioned authority, it is necessary to clarify that the deposit of 80% at the Central Bank of Nicaragua, referred to in Article 7 of the General Banks Law, may be made in Córdobas or in United States Dollars.

In exercise of its powers,

HAS ISSUED

The following:

CD-SIBOIF-1054-1-MAY2-2018

NORM REFORMING ARTICLE 11 OF THE REGULATION ON THE REQUIREMENTS FOR THE ESTABLISHMENT OF BANKS, FINANCIAL COMPANIES, BRANCHES OF FOREIGN BANKS, AND REPRESENTATIVE OFFICES

FIRST: Article 11 of the Regulation on the Requirements for the Establishment of Banks, Financial Companies, Branches of Foreign Banks, and Representative Offices, contained in Resolution No. CD-SIBOIF-473-1ABR11-2007, published in La Gaceta, Official Journal No. 106, on June 6, 2007, is hereby amended, to read as follows:

"Art. 11. Notice of Commencement of Operations.- In accordance with Article 7 of the General Banks Law, prior to the commencement of operations of a national bank or a branch of a foreign bank in the country, the Superintendent shall verify compliance with the following aspects:

a. Minimum paid-in social capital in cash. In the case of branches of foreign banks, assignment and establishment of capital equal to the minimum established by Law. In both cases, 80% of this amount as a demand deposit at the Central Bank of Nicaragua, in Córdobas or its equivalent in United States Dollars.

b. Notarized copy of the articles of incorporation and bylaws with the corresponding registration details in the Public Registry.

c. Opening balance sheet.

d. Certification of the appointments of the directors for the first term, the manager or principal executive of the bank, and the internal auditor.

e. Verification by the Superintendent that the institution has adequate physical facilities and technological platform, as well as the necessary contracts, insurance, manuals, and regulations approved by the board of directors. For this purpose, interested parties must take into account the indications in Annex 5 and the norms issued by the Board of Directors, such as those pertinent to the management of credit, market, liquidity, and operational risks.

If the application for authorization of operation with evidence of compliance with the aforementioned requirements is not submitted within one hundred eighty (180) days from the notification of the resolution authorizing its establishment, it shall become void, and the amount of the deposit referred to in Article 2 of this regulation shall be transferred to the Treasury of the Republic.

In order to expedite the authorization process, the Superintendent may require, 45 days prior to the expiration of the 180-day period referred to in the preceding paragraph, that interested parties submit an progress report on the compliance with the requirements indicated in subsection e. above.

SECOND: This regulation shall enter into force upon its notification, without prejudice to its subsequent publication in La Gaceta, Official Journal. (signed) V. Urcuyo (signed) S. Rosales (signed) Fausto Reyes (signed) Gabriel Pasos Lacayo (signed) illegible (Silvio Moisés Casco Marenco) (signed) U. Cerna Secretary.

URIEL CERNA BARQUERO
Secretary, Board of Directors SIBOIF"