The President of the Third Senate Committee, David Barguil (Conservative Party – allied with the ruling party), announced a meeting for the week of April 20 with banking sector representatives, following a request from his party to the Colombian Financial Superintendency (SFC, for its acronym in Spanish) to report on those banks which fail to comply with the credit measures announced by the National Government. The day of the meeting is not confirmed yet. Finance Minister, Alberto Carrasquilla, meanwhile held a virtual meeting with banking sector representatives and the Banco de la República (BanRep, in Spanish) published a resolution to reduce bank reserve requirements. The SFC also published a circular and an attached document which provides instructions regarding the measurement of market risk. The decree is already in force. Lastly, the President, Iván Duque, announced that after April 27 the country “will resume productive activity” but not its “social life”. He also called for teleworking to be more widely used in the country.
Senator David Barguil announced that next week he will hold a debate on the political control of the financial sector to analyze complaints received from citizens and small businessmen concerning the way banks have acted in the context of the economic crisis caused by COVID-19. The head of the SFC will be summoned to the debate as will the presidents of Bancoldex and Banagrario; the president of the National Guarantee Fund (FNG, for its acronym in Spanish); and the Minister of Finance. An invitation will also be issued to the president of Asobancaria, Santiago Castro. “We have received complaints about the high rates applied to bank loans and the rise in fees for financial services,” said Barguil.
Similarly, the rest of the Conservative Party issued a ruling requesting the SFC to review and report which banks are failing to comply with the measures ordered by the President. “The entity must exercise its function and control abuses to avoid the widespread destruction of jobs that will happen if there is no control exercised over financial institutions that are hindering access to credit lines granted by the Government in the face of the emergency,” expressed the party.
On the side of the Executive Power, the Minister of Finance, Alberto Carrasquilla, held a virtual meeting with the presidents of private banks and union representatives to analyze the credit measures being driven by the Government. In this context, some business associations have expressed their concern about the difficulties they are experiencing accessing credit. Sector representatives complained about the excess requirements and delays in the approval of loans.
Finally, through resolution 9 of 2020, the BanRep established that it will inject liquidity into the economy by reducing bank reserve requirements, from 11% to 8% and from 4.5% to 3.5%, depending on the type of financial institution. Meanwhile, the Board of Directors has authorized the purchase of public debt securities (TES, for its acronym in Spanish) in the secondary market for up to USD 519 million in the remainder of April.