Venezuela closes down four banks for ‘irregularities’

The Venezuelan government has shut down four private banks, accusing them of financial irregularities.

The closures come 10 days after the authorities took over the banks on suspicion of violating regulations.

The banks are owned by a group of investors led by businessman Ricardo Fernandez, who is under arrest on charges of misappropriating funds.

Two banks, Provivienda and Canarias, will be liquidated. The others, Bolivar and Confederado, may be rescued.

Finance Minister Ali Rodriguez said the “negative performance” of the banks made it necessary to stage a “closed-door intervention”.

The assets of Canarias and Provivienda would be auctioned off, but the problems at Bolivar and Confederado were less severe, he added.

The four institutions account for about 6% of the Venezuelan banking sector.

Since 2006, President Hugo Chavez’s government has also acquired Venezuela’s biggest telecommunications, electricity and steel companies, as well as major oil projects, as it aims to create a state-run socialist economy.

BBC News

Related Item

Venezuela closes four banks after Chavez warning

CARACAS (Reuters) – Venezuela on Monday shut down four private banks a day after socialist President Hugo Chavez warned he would not hesitate to nationalize any financial institutions failing to help national development.

Anxious staff and depositors gathered outside bank offices, whose doors stayed shut after Finance Minister Ali Rodriguez called an early-morning news conference to announce their closure due to internal irregularities.

“How can I pay for my shopping, my boy’s school? How will I survive? Who will answer for my money?” said employee and depositor Fabiola Martin, among 200 people thronging the Caracas headquarters of one of the banks, Banco Canarias.

The four banks account for just 6 percent of the South American nation’s deposits, and were taken over by the government on November 20 for violations of solvency regulations and unexplained capital increases.

Their owner, wealthy businessman Ricardo Fernandez who has close ties to the government including supplying state shops with food, is under arrest. A court has barred 16 of the banks’ executives from leaving the country.

Reuters

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