Financial Crime World

BREAKING: SIB Takes Control of Bank, Suspends Shareholders’ and Creditors’ Rights

In a sudden move, the Superintendency of Banks (SIB) has taken control of [Bank Name], suspending shareholders’ and creditors’ rights in the process. The SIB will now take possession of all offices and branches, books, documents, and records of the bank.

Intervention Justification

According to the Dominican Republic’s Monetary and Financial Law (MFL), the SIB is entitled to intervene in a bank when it fails to comply with certain requirements or when one or more of the following causes is present:

  • Regulatory capital or equivalent reduced by 10-50% over a 12-month period
  • Solvency ratio lower than the minimum required
  • Legal reserves deficient
  • Repeated credit facilities from the central bank
  • False financial information
  • Recurrent breaches of the MFL
  • Actions that put public deposits or liquid assets in grave danger
  • External auditors’ qualified opinion

Deposit Protection Priority

The SIB will prioritize deposit protection, ensuring that:

  • Private sector deposits are fully secured
  • Housing finance and construction deposits are fully secured
  • Cash mandates, judicial deposits, and other claims are prioritized

Capital Requirements

Banks in the Dominican Republic are required to maintain regulatory capital of at least 10% of risk-weighted assets. Multiple-service banks and credit institutions that fail to comply with these requirements are considered insolvent.

Enforcement

The SIB has the authority to:

  • Adjust the minimum levels of capital required for each type of financial institution
  • Regulated institutions must maintain a minimum solvency ratio

Regulated financial institutions must also:

  • Maintain legal reserves as a percentage of total funds collected from the public
  • Keep a reserve ratio over liabilities for foreign currency-denominated deposits and local currency-denominated deposits

Next Steps

The SIB will now work to stabilize [Bank Name] and ensure that depositors’ funds are protected. The exact timeline for this process is unclear, but the SIB has assured the public that it will do everything in its power to maintain financial stability in the Dominican Republic.