September 12, 2019 / 8:56 PM / 3 months ago

Venezuela government intervenes at private bank after offshore affiliate closes

CARACAS, Sept 12 (Reuters) - Venezuela’s banking regulator will launch a temporary state intervention of private bank Occidental de Descuento (BOD), according to a document seen by Reuters on Thursday, following the closure of the bank’s offshore affiliate in Curacao.

The measure at the country’s fifth-largest bank by assets will last for 120 days and may be extended. It will allow the bank to keep operating, but dividend payments, new investments, and new board appointments will be prohibited.

Regulator Sudeban said the decision came in light of Curacao authorities’ decision to implement an “emergency measure” suspending activities at Banco del Orinoco, a BOD affiliate, on Sept. 5.

Neither Venezuela’s information ministry nor BOD responded to requests for comment.

The Central Bank of Curacao and San Martin said the decision was due to “deficiencies” at the bank.

BOD’s board later dissolved Banco del Orinoco, but its assets on the Caribbean island remain frozen while authorities probe the bank’s finances. Curacao’s decision had also prompted Panama’s banking regulator to intervene at Allbank, a BOD affiliate in the Central American country, Panama’s banking regulator said in a statement. (Reporting by Corina Pons and Deisy Buitrago Writing by Luc Cohen Editing by Rosalba O’Brien)

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