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Guatemala’s Financial Regulatory Bodies Strengthen Oversight Amid Economic Growth

The financial regulatory bodies in Guatemala have been working diligently to strengthen oversight and regulation in the banking sector as the country’s economy continues to grow.

A Growing Economy with a Highly Concentrated Market

According to data from the Superintendence of Banks (SIB), the 18 commercial banks in Guatemala had a combined $63.8 billion in assets as of April 2023. The six largest banks control approximately 87% of total assets, indicating a highly concentrated market.

Strengthening Supervision and Prudential Regulation

The SIB is responsible for regulating the financial services industry and has been actively working with the Guatemalan Congress to draft laws aimed at adequately regulating the business and financial sectors. In August 2012, the Congress approved reforms to the Banking and Financial Groups Law and the Central Bank Organic Law, which strengthened supervision and prudential regulation of the financial sector.

Combating Money Laundering and Terrorism Financing

Guatemala has made significant strides in combating money laundering and terrorism financing. The country was removed from the list of non-cooperating countries by the Financial Action Task Force (FATF) in July 2004 after passing anti-money laundering legislation in December 2001 and terrorism finance legislation in August 2005.

Pending Legislation

Despite these efforts, proposed amendments to the Banking and Financial Groups Law and an anti-money laundering and counter-terrorism financing draft law remain pending congressional approval as of June 2023.

Open Exchange Regime

Guatemala’s exchange regime is considered open and unrestricted, allowing for the free conversion or transfer of funds into a freely usable currency at a market- clearing rate. The Central Bank intervenes in the foreign exchange market only to prevent sharp movements, and there are no legal constraints on remittances or other capital flows.

Reducing Money Laundering Risks

In recent years, Guatemala has taken steps to reduce the risks of money laundering and terrorism financing by establishing limits for cash transactions of foreign currency. Since May 2001, banks have been permitted to offer accounts and conduct business in any foreign currency, and a regulation approved in October 2010 requires monthly deposits over $3,000 USD to be subject to additional requirements.

Correspondent Banking Services

Citibank N.A., Guatemala Branch has maintained operations in the country since 1990, providing local correspondent banking services. For more information on payment methods or other trade finance options, please visit the Trade Finance Guide.

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