DOMINICAN REPUBLIC UPGRADES BANKING SECRECY LAWS AND REGULATIONS

Modernizing the Banking Sector in the Dominican Republic

In a significant move to modernize the country’s banking sector, President Luis Abinader has promulgated and published Law 13-24 in the Official Gazette, governing the Reserve Bank of the Dominican Republic (Banreservas). The new legislation marks a major update to the bank’s regulations, which had remained unchanged for 61 years.

Key Updates to Banreservas’ Regulations

The law adapts Banreservas’ name to Banco de Reservas de la República Dominicana - Banco Múltiple, reflecting its expansion into a multiple banking institution. To ensure competitiveness in the dynamic financial sector, the bank is now required to operate under rules aligned with national and international standards.

• Removal of General Tax Exemptions: Banreservas will no longer enjoy general tax exemptions, bringing it on par with other Dominican financial institutions.
• Change in Leadership Title: The title of the head has been changed from “general administrator” to “executive president,” aligning with global banking norms.

Strengthening Transparency and Accountability

The new law also strengthens transparency and accountability within the bank, ensuring that its operations align with current economic conditions. Key provisions include:

• Board Composition: The board of directors will consist of 14 members, including the Minister of Finance, the CEO, and 12 members appointed by the Executive Branch.
• Prohibition on Post-Service Activities: Upon leaving their roles, board members (except for the Minister of Finance) are prohibited from engaging in management, advisory, or legal representation activities in financial intermediation entities for one year.

Promoting Competitiveness and Economic Development

The State remains Banreservas’ sole shareholder and will receive 40% of its profits. The remaining 60% will be allocated to the bank’s equity reserves. Additional provisions ensure that the bank operates under the same rules as other multiple banks, promoting competitiveness.

“This law updates our governance, structure, and operations to align with current economic conditions, inclusivity, fiduciary duties, and confidentiality requirements,” said executive president Samuel Pereyra. “It also underscores Banreservas’ role in promoting the economic and social development of the Dominican Republic.”

The legislation aims to modernize Banreservas, making it more agile and customer-focused, enabling it to better respond to changing market conditions and technological advancements.