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A new banking law that took affect in Venezuela last week has caught the regulator and industry by surprise, as it raises minimum capital requirements for universal and commercial banks by 6bn bolivares (US$8mn), local press reported.
Last December banking regulator Sudeban issued a resolution increasing the minimum capital requirement from 3bn to 34.8bn bolivares for universal banks and from 1.5bn to 13.9bn bolivares for commercial banks. The government initially gave banks 18 months to comply.
According to new regulations published last week in Venezuela's federal register equivalent, the minimum capital required is now 40bn Bolivares for universal banks and 20bn bolivares for commercial banks.
To allow for this increase, the completion deadline has been extended by 90 days starting June 31, 2002.
"We only learnt of this modification when it appeared in the federal register and had no prior knowledge of the increase," head banking regulator Alejandro Caribas told newspaper El Nacional.
The modification could impact small- and medium-sized institutions in view of the small period of time allowed for the change, he said.
The minimum capital hike has caused some universal banks like Confederado and ABN Amro to ask Sudeban to change their status to that of commercial banks.
"We hope this resolution has an affect on financial institutions, which should look for alternatives to meet the requirements, like merging or selling out to other groups," Caribas said.