Bank of Mexico Law Debate in February; Banks Leave MexicoBy MBN Staff | Thu, 12/31/2020 - 13:37
A long and arduous year for the financial sector is almost over. The Bank of Mexico Law debate will take place in February next year, while banks are preparing to hand out additional credit restructuring programs if they become necessary. Two international banks have left Mexico this month but another fintech has arrived.
All this and more in the Week in Finance.
Despite the COVID-19 vaccine arriving in Mexican shores this month, the pandemic remains an enormous threat across the country. With intense restrictions still enforced in several states, banks are preparing to offer clients more credit restructuring programs, says National Banking and Securities Commission (CNBV) President Juan Pablo Graf.
This program will be the third that the financial sector has offered to both individuals and businesses who are struggling with a loss of income. While Graf underlined the fact that current defaults and non-payments do not suggest the additional restructuring programs will be immediately needed, the sector is preparing should the move be required.
The first deferral of payment offered this year lasted for a maximum of six months and was then replaced by a credit restructuring program. The exact details of the new programs are not yet known but “they consist of the entities themselves carrying out the restructurings in the way they propose, which is similar to the restructurings proposed by CNBV,” said Graf.
Following the initial delay to the controversial Bank of Mexico Law change, a date of February 2021 has been offered for further inspection of the law. The outcry of the financial sector and the Bank of Mexico after the draft was unveiled, which critics believe would put the bank at risk of handling illicit finance by being forced to “buy” currency that cannot be repatriated, forced the delay earlier this month.
The new date was given following the depreciation of the dollar after the bill was given Senate approval, offering a glimpse into how international markets may react should the bill be written into law.
The Bank of Montreal and the Israeli Mizrahi Tefahot Bank have both left Mexico, the Ministry of Finance and Public Credit announced in the Nation’s Official Gazette. According to the announcement, both banks had their authorizations revoked and closed their Mexico representation offices. The Bank of Montreal was first given authorization to operate in the country in 1963, while Mizrahi Tefahot Bank arrived in 2001.
But another financial institution seeks to target the country. Creditas, a Brazilian unicorn fintech, has established Mexico as its first point for international expansion.