The Executive Power enacted Law 13-24 on the new status of Banco del Reservas (Banreservas), through which the entity is now called a multiple bank, without tax exemptions, privileges or limitations. This is the first time in 61 years that a substantial change has been made to the regulations governing the bank.
The information was shared by the financial institution in a press release in which it is emphasized that such regulation places Banreservas on an equal footing with the others that make up the financial system, maintaining the State as the sole shareholder.
“The new Law 13-24 governing the Banco de Reservas de la República Dominicana came into force with the enactment of President Luis Abinader and its publication in the Official Gazette,” the document says.
Among the novelties introduced by the legislation, it is emphasized that the bank is “highly competitive and in constant evolution”.
The legislation states that Banreservas will have a capital of 39 billion, which may be increased or decreased by resolution of the Board of Directors, in accordance with the provisions of the Monetary and Financial Law, reads the note.
“This means that the banking institution has the power to make decisions related to its capital without requiring the approval of the legislature, as long as such increases are charged to its equity reserves, which will guarantee the strengthening of its financial position and allow it to comfortably comply with regulatory requirements,” he emphasizes.
The new law eliminates the general tax exemption provided in favor of Banco de Reservas under the previous law, putting it on an equal competitive footing with its peers in the Dominican financial system.
New official name
From now on, the official name of the organization is Banco de Reservas de la República Dominicana – Banco Múltiple, and the designation of general manager is changed to executive president.
These nomenclature changes are to adapt it to similar institutions in national and international banking, without affecting the structure of the organization or the functions of its collaborators.
“This is the first time in 61 years that a substantial change has been made to the regulations governing Banreservas, so it represents an important step, as it makes it a more modern, agile and customer-focused entity, by allowing it greater flexibility to face the challenges of digital transformation, innovation and environmental sustainability,” referred the Bank’s executive president, Samuel Pereyra.
Alternates to form the Board of Directors.
The Board of Directors will be composed of 14 members:
- The Minister of Finance, who will preside over the Bank as before.
- The Bank’s Executive President.
- Twelve members appointed by the Executive Branch.
- Three of which will be recommended by the Monetary Board and will have the status of “independent members”.
According to the note, the enrollment of the body does not increase, since the five members who served as alternates now remain as regular members and the figure of alternate members is eliminated.
The members of the Board upon termination of their functions, with the exception of the Minister of Finance, “may not perform any management, advisory or legal representation activities in financial intermediation entities, for a period of one year”, establishes the new law, which is number 13-24.
The State as sole shareholder
The State will continue to be the sole shareholder of Banreservas and, as such, will be entitled to 40% of the profits generated, of which the State may directly dispose of 15% to cover debts with the financial institution, as is currently the case.
The remaining 60% of distributable profits will be allocated to the bank’s equity reserves. Other modifications contemplate new regimes to protect the integrity of the organization, reduction of processes to accelerate approvals and transparency in several aspects that were already efficiently applied, the information adds.
Source:Arecoa.com
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