Thursday 29 September 2022

Government presents bill to sell off the Banco de Costa Rica

A committee of ministers would hire a specialist for the sale, without the need for a public tender

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29 September 2022 - At The Banks - BCCR

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QCOSTARICA – President Rodrigo Chaves and the Minister of Finance, Nogui Acosta, signed two bills on Wednesday. One of them aimed at reforming the fiscal rule and another for the sale of the the state bank, the Banco de Costa Rica (BCR).

The Minister of Finance, Nogui Acosta, and President Rodrigo Chaves hold up on Wednesday the signed bill to sell off the BCR

The bill, which requires the approval of the Legislative Assembly to become law, leaves the sale of the state asset, leaves the process in the hands of the Governing Council (Cabinet).

The bill gives the President and his ministers, acting as the Bank’s shareholders, the charge of resolving all processes related to the sale of the state bank, while the Banco Central (Central Bank) will serve as an advisory body, and the Ministry of Finance will be in charge of supervising the actions of the Cabinet.

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In the process, the Cabinet must appoint a “sales committee” made up of the ministers of Finance, Presidency, Planning, Economy and Labor, and may contract “goods and services” in accordance with the General Law of Public Procurement.

After an interview process with interested parties to acquire the bank, the Sales Committee and the Ministry of Finance “will formalize the award and respective contract”.

Chaves was emphatic that the sale of the BCR does not mean a closure of the bank, rather it passes to “other” hands, be it national or international.

You can read the bill online or download it here.

The president explained that, despite the detractors who say the sale is like a drop in a bucket to the country’s debt, the sale of the BCR and 49% of the national insurer, the Instituto Nacional de Seguros (INS), if this initiative is approved, the country’s future debt could be reduced to 60% and would represent savings of ¢600 billion in interest payments.

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“This is not a band-aid on the debt, since we are calculating that by 2030, the country would be recovering around ¢600 billion that is paid today in interest,” said Chaves.

In principle, the sale of the BCR would imply that the country would obtain between 2.7% and 3% of GDP, explained the president.

The Board of Directors of the BCR issued a press release on Wednesday following the announcement, asking its clients (depositors) for confidence.

“We are going to maintain the position of not giving any statement until we know the content and scope of the project,” was the reaction from State bank.

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