CARACAS, Nov 20 (Reuters) - Venezuela took control of four small banks for violating solvency regulations and unexplained increases in capital and on Friday arrested the owner, a businessman with links to the government.
Finance Minister Ali Rodriguez said on Friday the government seized Banco Confederado, Banco Canarias, Banco Provivienda (Banpro) y bolivar banco, because of concerns about their credit portfolios, problems explaining the source of funds and failure to comply with certain obligations.
'The fundamental objective of these measures is to guarantee the rights of depositors, savers and even creditors,' Rodriguez said during a news conference at the presidential palace.
The banks represent about 6 percent of deposits in the banking system and analysts say the government move is unlikely to threaten its stability.
Businessman Ricardo Fernandez, who supplies government-owned markets with food and bought the banks in the last few years, was detained when he presented himself to authorities, his lawyer told website Noticias24.
Banking superintendent Edgar Hernandez said authorities had been monitoring the four banks since the end of 2008. They had been subject to administrative measures for failing to comply with certain indicators. He said the purchase of the banks had also broken rules.
'For example Banpro bought Banco Canarias through the Caracas stock exchange, which is prohibited, and in turn Banco Canarias bought Banco Confederado, also through the stock exchange ... which was prohibited,' he said at the news conference.
Hernandez said the banks will continue normal operations under government control and that a plan will be quickly drawn up to correct their problems.
He did not say whether the government will eventually sell the entities, as it has done in previous interventions.
Venezuela's banking sector is dominated by 10 banks that control 70 percent of the total funds. One analyst said the affected banks are very small and the government intervention was not likely to cause further problems in the system.
(Reporting by Ana Isabel Martinez; Writing by Frank Jack Daniel; Editing by W Simon, Gary Hill) Keywords: VENEZUELA BANKS/ (frank.daniel@thomsonreuters.com; Tel: +58 212 263 7415; Reuters Messaging: frank.daniel.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
Finance Minister Ali Rodriguez said on Friday the government seized Banco Confederado, Banco Canarias, Banco Provivienda (Banpro) y bolivar banco, because of concerns about their credit portfolios, problems explaining the source of funds and failure to comply with certain obligations.
'The fundamental objective of these measures is to guarantee the rights of depositors, savers and even creditors,' Rodriguez said during a news conference at the presidential palace.
The banks represent about 6 percent of deposits in the banking system and analysts say the government move is unlikely to threaten its stability.
Businessman Ricardo Fernandez, who supplies government-owned markets with food and bought the banks in the last few years, was detained when he presented himself to authorities, his lawyer told website Noticias24.
Banking superintendent Edgar Hernandez said authorities had been monitoring the four banks since the end of 2008. They had been subject to administrative measures for failing to comply with certain indicators. He said the purchase of the banks had also broken rules.
'For example Banpro bought Banco Canarias through the Caracas stock exchange, which is prohibited, and in turn Banco Canarias bought Banco Confederado, also through the stock exchange ... which was prohibited,' he said at the news conference.
Hernandez said the banks will continue normal operations under government control and that a plan will be quickly drawn up to correct their problems.
He did not say whether the government will eventually sell the entities, as it has done in previous interventions.
Venezuela's banking sector is dominated by 10 banks that control 70 percent of the total funds. One analyst said the affected banks are very small and the government intervention was not likely to cause further problems in the system.
(Reporting by Ana Isabel Martinez; Writing by Frank Jack Daniel; Editing by W Simon, Gary Hill) Keywords: VENEZUELA BANKS/ (frank.daniel@thomsonreuters.com; Tel: +58 212 263 7415; Reuters Messaging: frank.daniel.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
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