Financial Crime World

Title: Honduras’ Financial Regulatory Compliance: A Region of Growth and International Alignment

Overview of Honduras’ Banking System

Amid the thriving economic landscape of Central America, Honduras stands out as a significant player in the banking sector. This article provides insights into the key features of Honduras’ financial system and the regulatory compliance that could impact U.S. businesses.

Snapshot of the Honduran Banking System

  • Overseen by the National Banking and Insurance Commission (CNBS)
  • Seven financial groups, 15 private banks, and various financial intermediaries
  • Total assets valued at $22.8 billion in 2018
  • 95% of this value accounted for by banks

Regulatory Compliance and Key Features

Capital Requirements and Interest Rates

  • Minimal capital requirement: $21 million (500 million L) per CNBS Circular 034/2016
  • Average interest rates in 2018: 13% for local currency, 6.9% for US dollars
  • Around 50.2% of deposits held in US financial institutions

Stronger Regulations and International Compliance

  • Central Bank reform law revised in 2004
  • Banking Commission reform law
  • Deposit Insurance Fund (FOSEDE) reform law
  • Transfer responsibilities for troubled banks and strengthen national credit bureau and ownership restrictions
  • 2016 Financial Law updated: adjusted framework to international practices and introduced new Money Laundering regulations

Growing Presence of Foreign Banks

  • Few legal barriers for foreign investment
  • Major attractions for regional banks: Banco Citibank de Honduras, S.A., Davivienda Bank S.A., BAC/Honduras, LAFISE, Azteca, Promerica, ProCredit, and BanPais
  • Honduras’ largest credit card holder: FICOHSA Bank, after acquiring Citibank’s credit card portfolio in 2015

Importance of Adhering to International Regulations

As the Honduran banking sector continues to grow and evolve, adhering to internationally recognized principles becomes increasingly vital. U.S. companies seeking expansion opportunities should understand these regulations and implement robust compliance strategies.

For guidance on navigating Honduran financial regulations and potential business opportunities, please contact your nearest U.S. Commercial Service office.