21 de agosto de 2014 / 19:03 / en 3 años

Colombian banks seek looser regulation to expand services

CARTAGENA, Colombia, Aug 21 (Reuters) - Colombian banks want looser regulations and the elimination of a financial transaction tax to increase consumer access to banking services and take advantage of favorable growth conditions, the head of the Banking Association of Colombia said.

Colombia’s private bank loan portfolio has considerable room to grow, Maria Mercedes Cuellar said in an interview on Thursday, while expanding bank services would help nearly one-third of adult population that does not have them.

“There’s a huge space to grow, which is why one of the reasons that we insist so much on access to the bank services is because this would provide an important service to people of all social classes,” said Maria Mercedes Cuellar in an interview in the run-up to a banking conference.

Colombia’s loan portfolio of $159.7 billion is around 42 percent of GDP, considerably lower than that of many other countries, including some developing economies where the ratio can be upward of 100 percent.

The Andean nation, which has enjoyed four solid years of economic growth above 4 percent, is forecast to grow by close to 5 percent this year. Colombia is the world’s fourth-biggest coal exporter, a major coffee grower and produces about 1 million barrels of oil per day.

Only 69 percent of the country’s adult population had a bank account as of 2012, according to World Bank data.

Eliminating a bank transaction tax of 0.4 percent would help increase the total population with access to bank accounts, Cuellar said.

Originally created in 1998 as an emergency measure during a financial crisis, the tax has since become a source of government revenue. Finance Minister Mauricio Cardenas over the weekend said the tax would be extended until 2018 to ensure financing for the national budget.

“This tax is a limitation on efforts to expand bank services, and it is a tax that paves the way for illicit activity,” she said, citing lower transparency in operations as a result of an increase in cash payments to avoid the tax.

“It’s pretty unusual that at this moment, half the country’s payment systems function with cash rather than through electronic debit,” she said.

She said interest rate caps on certain types of loans have in many cases boosted banks’ costs and required them to be more selective in deciding whom lend to.

“Things like interest rate caps restrict the capacity of the sector to grow,” she said. “It’s not just the maximum interest rate, but also controls on home loans, agricultural loans.”

Cuellar said when interest rates fall, banks are then forced to lower the rates on loans they have already approved.

“When banks lend money, they don’t know what’s going to happen along the way.” (Writing by Brian Ellsworth; Editing by Steve Orlofsky)

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