Financial Inclusion and Crime Prevention Efforts Gain Momentum in Dominican Republic
The Superintendencia de Bancos (SB) of the Dominican Republic has made significant strides in promoting financial inclusion and preventing financial crime. As part of its supervisory and regulatory strategies, SB is working towards achieving the Sustainable Development Goals, including alleviating poverty, gender equality, equal opportunities, and strong institutions.
Importance of Financial Inclusion
Financial inclusion is crucial for integrating financial services into daily economic activities. However, barriers often prevent hundreds of thousands of citizens from benefiting from its potential economic growth. To address this challenge, SB formed an innovation and financial inclusion team to promote products that support financial inclusion while respecting financial integrity.
SB’s Efforts in Financial Inclusion
The regulator’s efforts were further strengthened with Circular 029-20, which outlines guidelines for basic deposit products aimed at promoting financial inclusion in the Dominican Republic. The circular sets out special requirements for opening accounts, simplified due diligence, and limitations designed to mitigate risk.
Basic Deposit Products
Financial intermediation entities such as commercial banks can offer these basic accounts, which provide the same level of security and quality as traditional deposit instruments. Service charges are minimal, and accounts can be opened in person or remotely. Two types of basic accounts are available:
- Basic Savings Accounts: Provide access to banking services for individuals who have never had a bank account before.
- Basic Payroll Accounts: Cater to workers who are excluded from the banking system due to legal or credit issues.
These accounts do not limit the number of transactions permitted per month, making it easier for users to manage their finances. Users can use these accounts for various transactions, including:
- Deposits and withdrawals at financial entity offices or ATMs
- Payment of credit cards and loans
- Digital channels for viewing past transactions and making domestic transfers
Progress and Future Plans
In its first 11 months since the circular was launched, SB has seen significant progress, with 345 basic accounts opened in 28 out of the country’s 32 provinces. Six financial intermediation entities have made these basic accounts available, including Banco de Reservas, which has the largest presence nationwide.
SB is confident that all entities in the financial system will follow suit and appeal to users to approach these entities with full certainty that they will find a product that opens doors to improving their household economies and contributing to a better country.