Regulations for Banks and Financial Institutions in the Dominican Republic
Initial Operating Limitations
The Monetary Board of the Dominican Republic can impose operating limits on new entities, including all-purpose banks and credit institutions, to ensure prudent expansion. This measure aims to prevent over-expansion and maintain financial stability.
Authorization Requirements
To begin operations, all-purpose banks and credit institutions must meet certain requirements, including:
- Obtaining an opinion from the Superintendent of Banks confirming that:
- Shareholders have sufficient equity
- Founding members have experience in financial matters
- Bylaws are compliant with regulations
- Other requirements are met
Minimum Capital Requirements
All-purpose banks must have a minimum paid-in capital of:
- RD$90,000,000 (RD$18,000,000 for savings and credit banks)
- RD$5,000,000 (for credit corporations), plus an inflation index This capital must be represented by common registered shares, with the option to include preferred stock.
Board Composition
The board of directors or management must consist of at least five individuals, with 40% having expertise in financial matters or being well-accredited on economic, financial, or entrepreneurial matters.
Foreign Investment
The Monetary Board will regulate requirements and conditions for foreign banks and institutions operating in the Dominican Republic.
Operations and Services
All-purpose banks can perform various operations and services, including:
- Receiving deposits
- Issuing securities
- Granting loans
- Discounting commercial papers
- Acquiring, assigning, or transferring commercial instruments
- Issuing credit cards
- Accepting letters of credit
- Assuming monetary obligations and granting warranties
- Carrying out foreign exchange operations
- Establishing correspondent services with banks abroad
The Monetary Board has regulatory power to determine new instruments or operations arising from new practices.