Banco de Venezuela hit with fine

Wednesday, November 6, 2002

Venezuelan banking regulator Sudeban has fined Venezuela's largest bank, Banco de Venezuela, for refusing to restructure mortgage loans that were inflation-indexed in the past, a Sudeban official told BNamericas.

According to local press reports, both Banco de Venezuela and Banco Provincial were fined 0.1% to 0.5% of their total capital, in accordance with Venezuelan banking law.

However, the Sudeban official said only Banco de Venezuela had been fined, and that the fine will be 0.5% of the bank's capital.

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Last month Sudeban issued a 90-day compliance period for banks to restructure mortgage loans, but began issuing fines after some banks, including Banco de Venezuela, refused to comply because they risked losing large sums of money if they did so.

Many mortgage loans were issued at a time when inflation and unemployment were much lower.