As of 31 March 2014, the pension funds reached the sum of RD$261.4 billion and of this money, the government wants to oblige them to deposit at least RD$26.14 billion (10% of the total) in the National Housing and Production Development Bank (BNV) after it is transformed into the Dominican Export Development Bank (Bandex). The Executive Branch sent the bill aimed at legalizing the change of role and name and authorizing the use of the funds to Congress on Tuesday, 27 May.
Article 26 of the bill says “that every Administrator of Pension Funds (AFP) should keep on deposit in the Bank (Bandex) at least 10% of the funds they administer for the workers or any other concept, in bonds, securities, deeds, quotas, values or other obligations that the bank issues.”
However, the Superintendent of Banks, Rafael Camilo, seemed surprised when he was asked about the disposition of Article 26 following an event hosted by the AIRD yesterday, Thursday 29 May. “I took this out and they put it back in. This is not going in. This was put in by the government and this is bad,” he told reporters.
Dominican Republic Industrial Association (AIRD) executive vice president Circe Almanzar said: “I thought that they were going to eliminate this. When we talked with all the entities before the proposal was submitted, many had said that ‘this is going to create a problem.” So it appears that many people were surprised. The business leader reported that obligation to deposit 10% or the pension funds in Bandex was contained in the proposals by the current BNV authorities, and by the Dominican Republic Center for Exports and Investment (CEI-RD).
At the end of his presentation, in response to questions from reporters, Camilo said that the Bandez has to be a highly-technified bank: This is the government’s idea and they will go so far as to put new people at all levels of the bank.”
The concerns from the business sector are focused on the independence of the Board of Directors of the re-born entity.
The Superintendent of Banks mentioned the government’s plan to expand business sector representation at this management level. Barely 10 years ago the BNV was “reformed” so that it could develop production, “but it continued financing even vehicles,” recalls Almanzar.
The business community is concerned about the fact that the appointment of the general manager and the bank president will be by presidential decree, and not by a shortlist of three candidates.
“This could lead to the conversion of the entity into something merely political and for use in election campaigns,” declared Almanzar.
Despite everyone wanting the Bandex, the bad memories of the past worry them that the “reformed” entity will continue being the BNV, but with another name.
www.listin.com.do/economia-and-negocios/2014/5/29/323890/Bandex-usaria-10-fondo-de-pensiones
www.diariolibre.com/destacada/2014/05/30/i632241_gobierno-quiere-rd26-mil-millones-los-fondos-pensiones-para-bandex.html