Costa Rica is down to two State banks, that is if you don’t count the Banco Popular, which is, well, I don’t think anyone really knows what it is.
Now, after everything that has happened at the Bank of Costa Rica (BCR) in recent months, its link to the #Cementazo corruption scandal of high loans that it seems it will not be able to recover, Presidential Candidate for the Movimiento Libertario (ML), Otto Guevara, has reiterated his proposal to merge the BCR with the Banco Nacional de Costa Rica (BNCR), that has so far been scandal free.
If the merger would take place, it would reduce the options Costa Ricans have in terms of public banking.
“I’ve always been my theory that the State should have a single bank and that it be to support new small businesses and not big businessmen who require larger loans…we can leave them to private banks,” said Guevara.
This process would be done by converting the BCR into a public limited company, which would then be valued through an appraisal that will be in charge of the Banco Central de Costa Rica (BCCR) – Central Bank of Costa Rica – which would then take the process forward in transferring 100% of the shares of the BCR to the BNCR.
The proposal would also limit the BN to loans of not more than US$1 million dollars, among other regulations, includes the BNCR assuming all rights, assets, and liabilities of the BCR, that would govern the operation of the one super bank.
The proposal also ensures that BCR employees who want to continue with the BNCR keep their jobs and their rights, etc.
At the moment, the project is in its infancy and before it can begin its long journey in the Legislative process, politicians have to test the water if the proposal is even feasible.
Banks in Costa Rica are divided into two categories: National (or State) and private banks. The differences are very important. National banks have some degree of security since deposits are insured.