{"id":36288,"date":"2025-04-01T00:00:20","date_gmt":"2025-04-01T06:00:20","guid":{"rendered":"https:\/\/garciabodan.com\/?p=36288"},"modified":"2025-09-05T10:18:27","modified_gmt":"2025-09-05T16:18:27","slug":"amendment-to-the-general-banking-law-of-nicaragua-strengthens-financial-sector-regulation","status":"publish","type":"post","link":"https:\/\/garciabodan.com\/en\/amendment-to-the-general-banking-law-of-nicaragua-strengthens-financial-sector-regulation\/","title":{"rendered":"Amendment to the general banking law of Nicaragua strengthens financial sector regulation"},"content":{"rendered":"<p><span data-contrast=\"auto\">On February 25, 2025, Law No. 1237, &#8220;Amendment and Additions to Law No. 561, the General Banking Law, Non-Banking Financial Institutions, and Financial Groups,&#8221; was published in the Official Gazette. This reform, which took effect upon publication, introduces changes aimed at reinforcing the supervision and stability of the financial sector in Nicaragua.<\/span><span data-ccp-props=\"{&quot;335551550&quot;:6,&quot;335551620&quot;:6}\">\u00a0<\/span><\/p>\r\n<p><b><span data-contrast=\"auto\">Main changes introduced by the admendment<\/span><\/b><span data-ccp-props=\"{&quot;335551550&quot;:6,&quot;335551620&quot;:6}\">\u00a0<\/span><\/p>\r\n<p><b><span data-contrast=\"auto\">1- Expansion of financial supervision<\/span><\/b><span data-contrast=\"auto\">:<\/span><span data-ccp-props=\"{&quot;335551550&quot;:6,&quot;335551620&quot;:6}\">\u00a0<\/span><\/p>\r\n<ul>\r\n\t<li data-leveltext=\"o\" data-font=\"Courier New\" data-listid=\"4\" data-list-defn-props=\"{&quot;335552541&quot;:1,&quot;335559685&quot;:1440,&quot;335559991&quot;:360,&quot;469769226&quot;:&quot;Courier New&quot;,&quot;469769242&quot;:[9675],&quot;469777803&quot;:&quot;left&quot;,&quot;469777804&quot;:&quot;o&quot;,&quot;469777815&quot;:&quot;multilevel&quot;}\" aria-setsize=\"-1\" data-aria-posinset=\"1\" data-aria-level=\"2\"><span data-contrast=\"auto\">Credit unions and financial technology companies engaged in intermediation and financing are now subject to regulation and supervision by the Superintendency of Banks and Other Financial Institutions (SIBOIF).<\/span><span data-ccp-props=\"{&quot;335551550&quot;:6,&quot;335551620&quot;:6}\">\u00a0<\/span><\/li>\r\n<\/ul>\r\n<p><b><span data-contrast=\"auto\">2- Stricter capital requirements<\/span><\/b><span data-contrast=\"auto\">:<\/span><span data-ccp-props=\"{&quot;335551550&quot;:6,&quot;335551620&quot;:6}\">\u00a0<\/span><\/p>\r\n<ul>\r\n\t<li data-leveltext=\"o\" data-font=\"Courier New\" data-listid=\"4\" data-list-defn-props=\"{&quot;335552541&quot;:1,&quot;335559685&quot;:1440,&quot;335559991&quot;:360,&quot;469769226&quot;:&quot;Courier New&quot;,&quot;469769242&quot;:[9675],&quot;469777803&quot;:&quot;left&quot;,&quot;469777804&quot;:&quot;o&quot;,&quot;469777815&quot;:&quot;multilevel&quot;}\" aria-setsize=\"-1\" data-aria-posinset=\"1\" data-aria-level=\"2\"><span data-contrast=\"auto\">The minimum social capital for national banks and foreign bank branches has been increased from C$200,000,000.00 to C$500,000,000.00 (US $13,605,442.20).<\/span><span data-ccp-props=\"{&quot;335551550&quot;:6,&quot;335551620&quot;:6}\">\u00a0<\/span><\/li>\r\n<\/ul>\r\n<p><b><span data-contrast=\"auto\">3- New capital reserves<\/span><\/b><span data-contrast=\"auto\">:<\/span><span data-ccp-props=\"{&quot;335551550&quot;:6,&quot;335551620&quot;:6}\">\u00a0<\/span><\/p>\r\n<ul>\r\n\t<li data-leveltext=\"o\" data-font=\"Courier New\" data-listid=\"4\" data-list-defn-props=\"{&quot;335552541&quot;:1,&quot;335559685&quot;:1440,&quot;335559991&quot;:360,&quot;469769226&quot;:&quot;Courier New&quot;,&quot;469769242&quot;:[9675],&quot;469777803&quot;:&quot;left&quot;,&quot;469777804&quot;:&quot;o&quot;,&quot;469777815&quot;:&quot;multilevel&quot;}\" aria-setsize=\"-1\" data-aria-posinset=\"1\" data-aria-level=\"2\"><span data-contrast=\"auto\">Three types of reserves are established:\u00a0<\/span><span data-ccp-props=\"{&quot;335551550&quot;:6,&quot;335551620&quot;:6}\">\u00a0<\/span><\/li>\r\n<\/ul>\r\n<ul style=\"list-style-type: circle;\">\r\n\t<li><b><span data-contrast=\"auto\">Capital conservation reserve<\/span><\/b><span data-contrast=\"auto\">: 2.5% of risk-weighted assets.<\/span><span data-ccp-props=\"{&quot;335551550&quot;:6,&quot;335551620&quot;:6}\">\u00a0<\/span><\/li>\r\n\t<li><b><span data-contrast=\"auto\">Temporary countercyclical capital reserve<\/span><\/b><span data-contrast=\"auto\">: 2.5% of risk-weighted assets.<\/span><span data-ccp-props=\"{&quot;335551550&quot;:6,&quot;335551620&quot;:6}\">\u00a0<\/span><\/li>\r\n\t<li><b><span data-contrast=\"auto\">Systemic risk reserve<\/span><\/b><span data-contrast=\"auto\">: 3% of risk-weighted assets, applicable to financial institutions with assets exceeding C$50,000,000,000.00 (US $1,360,214.00).<\/span><span data-ccp-props=\"{&quot;335551550&quot;:6,&quot;335551620&quot;:6}\">\u00a0<\/span><\/li>\r\n<\/ul>\r\n<p><b><span data-contrast=\"auto\">Other modifications<\/span><\/b><span data-ccp-props=\"{&quot;335551550&quot;:6,&quot;335551620&quot;:6}\">\u00a0<\/span><\/p>\r\n<p><span data-contrast=\"auto\">The amendments updates the elements that make up the capital calculation for supervised institutions. It also strengthens corporate governance provisions by establishing measures to improve risk prevention and management. Among these provisions, it is required that at least 30% of the directors of financial institutions be independent.<\/span><span data-ccp-props=\"{&quot;335551550&quot;:6,&quot;335551620&quot;:6}\">\u00a0<\/span><\/p>\r\n<p><span data-contrast=\"auto\">Regarding supervision, stress testing and risk-based supervision are strengthened to ensure continuous monitoring of the financial system&#8217;s stability.<\/span><span data-ccp-props=\"{&quot;335551550&quot;:6,&quot;335551620&quot;:6}\">\u00a0<\/span><\/p>\r\n<p><span data-contrast=\"auto\">Additionally, SIBOIF is authorized to set limits on interest rates, fees, and other financial charges applicable to the operations of supervised institutions.<\/span><span data-ccp-props=\"{&quot;335551550&quot;:6,&quot;335551620&quot;:6}\">\u00a0<\/span><\/p>\r\n<p><span data-contrast=\"auto\">Restrictions are also introduced on the granting of unsecured loans, allowing only those that do not exceed C$5,000,000.00 (US $136,054.42) and that have the authorization of SIBOIF. <\/span><span data-contrast=\"auto\">Non-compliance will result in penalties, and the full provision of the granted credit will be required.<\/span><span data-ccp-props=\"{&quot;335551550&quot;:6,&quot;335551620&quot;:6}\">\u00a0<\/span><\/p>\r\n<p><span data-contrast=\"auto\">Finally, the amendment establishes the obligation for supervised institutions to submit their contract models for SIBOIF approval before implementation.<\/span><span data-ccp-props=\"{&quot;335551550&quot;:6,&quot;335551620&quot;:6}\">\u00a0<\/span><\/p>","protected":false},"excerpt":{"rendered":"<p>On February 25, 2025, Law No. 1237, &#8220;Amendment and Additions&#8230;<\/p>\n","protected":false},"author":10,"featured_media":36294,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":""},"categories":[226,229],"tags":[],"class_list":["post-36288","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-alert","category-news"],"acf":[],"_links":{"self":[{"href":"https:\/\/garciabodan.com\/en\/wp-json\/wp\/v2\/posts\/36288","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/garciabodan.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/garciabodan.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/garciabodan.com\/en\/wp-json\/wp\/v2\/users\/10"}],"replies":[{"embeddable":true,"href":"https:\/\/garciabodan.com\/en\/wp-json\/wp\/v2\/comments?post=36288"}],"version-history":[{"count":2,"href":"https:\/\/garciabodan.com\/en\/wp-json\/wp\/v2\/posts\/36288\/revisions"}],"predecessor-version":[{"id":42686,"href":"https:\/\/garciabodan.com\/en\/wp-json\/wp\/v2\/posts\/36288\/revisions\/42686"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/garciabodan.com\/en\/wp-json\/wp\/v2\/media\/36294"}],"wp:attachment":[{"href":"https:\/\/garciabodan.com\/en\/wp-json\/wp\/v2\/media?parent=36288"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/garciabodan.com\/en\/wp-json\/wp\/v2\/categories?post=36288"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/garciabodan.com\/en\/wp-json\/wp\/v2\/tags?post=36288"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}