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January 1, 2010In force

Adapt the Workers' Bank, in its social form, to what is established in Article 5 of the Financial System Law

Congreso Nacional

  • Decree: 245-2010
  • Published: January 1, 2010
  • Issuing body: Congreso Nacional
  • Category: Commercial

Summary

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This decree modernizes the Workers' Bank by requiring it to comply with the same rules as other banks in Honduras. It allows new investors to contribute capital to strengthen the financially troubled bank. It also requires companies to withhold and promptly transfer employee loan payments to the bank.

Considerations

That by means of Decree No. 131 of November 8, 1966, the Workers' Bank Law was approved.

That by means of Decree No. 129-2004 of September 21, 2004, the Financial System Law was approved, an instrument that has become one of the fundamental pillars for the stability of the Financial System.

That given the corporate governance structure derived from the current Workers' Bank law, said Institution has not observed sound practices of administrative and financial management, which has been reflected in a deterioration of the main financial indicators.

That given the shareholding composition derived from the same Law, it is not possible for the current shareholders of the Bank to undertake timely capitalization to regularize its equity situation.

That in accordance with the foregoing, it is necessary to modify the Law to establish a mechanism that allows the capitalization of the Bank with the incorporation of new shareholders.

That it is in the public interest to modify the Workers' Bank Law with the purpose of adapting its operations to the same legal framework of the rest of the institutions of the financial system, to promote good practices in the management of said Institution and to envision its capitalization.

That it is advisable to provide the National Banking and Insurance Commission with the necessary mechanism to resolve the equity deficiencies of institutions of the financial system, which may be resolved through capital contributions from new shareholders.

Articles

Article 1.-

To adapt the Workers' Bank in its social form to what is established in Article 5 of the Financial System Law, and in all other respects, to the legislation applicable to institutions of the financial system.

Article 2.-

Public and private sector companies are obliged to make withholdings from loan payments that the Workers' Bank grants to company employees and transfer the withholdings made to the Bank within five (5) business days following. Compliance with this provision shall be supervised by the National Commission of Banks and Insurance (CNBC).

Article 3.-

As part of the process of adapting to the Financial System Institutions Law, the shareholders of the Workers' Bank shall elect their Board of Directors, which shall take immediate possession of their positions and shall have sixty (60) days from the approval of this Decree to prepare and present for approval by the National Commission of Banks and Insurance, the corporate bylaws and its statutes. After the aforementioned approval, the Commission shall certify the approval of the corporate contract and social statutes, as referred to in the Commercial Code. The Board of Directors shall grant and immediately register said deed and its statutes, which shall be exempt from payment of the corporate formation tax, and the Commercial Registrar of the company's domicile shall register them as such, without requiring payment of the corresponding registration fee. While the National Commission of Banks and Insurance approves the corporate contract and statutes presented by the Workers' Bank, it shall continue governing its operations under Decree No. 131 of November 8, 1966, which contains its Constitutional Law, except in relation to Chapters II and III thereof, which are repealed as of the effective date of this Decree.

Article 4.-

The National Commission of Banks and Insurance in accordance with the provisions of Article 117 of the Financial System Law, as a preventive measure and in defense of depositors, may authorize new shareholders to contribute capital to the Workers' Bank. The National Commission of Banks and Insurance, prior to accepting new shareholders, shall properly value the assets in accordance with its accounting standards; consequently, it shall determine the book value of the shares and shall proceed to order the registration of adjustments to the Bank's financial statements; once the book value of the shares is determined, if this value is negative, the National Commission of Banks and Insurance shall declare such shares amortized by operation of law; once new shareholders are accepted, they shall make effective the corresponding capital contributions and the National Commission of Banks and Insurance shall convene them to a General Shareholders' Assembly to elect the new Board of Directors. In this capitalization mechanism by new shareholders, Articles 119, 140, 141, 144, 147 and 150 numeral 6) of the Financial System Law shall apply, as applicable.

Article 5.-

The Deposit Insurance Fund (FOSEDE) through its Board of Directors may and shall make an effective reimbursable contribution to the financial institution to be capitalized; provided that under the rule of least cost for FOSEDE and subject to the economic and financial analysis conducted by the National Commission of Banks and Insurance, the amount requested by the National Commission of Banks and Insurance to said institution results in an amount equal to or less than its obligations for the guaranteed sum. FOSEDE may recover its contribution with the sale of the excluded assets determined by the National Commission of Banks and Insurance, with which a trust shall be constituted in which FOSEDE shall be the beneficiary.

Article 6.-

Without prejudice to what is established in Articles 27 and 28 of the Cooperatives Regulation, for the purposes of what is provided in this Decree, in this capitalization process Cooperatives may associate to become part of a non-cooperative organization and enter into participation contracts in accordance with what is established in the Cooperatives Law of Honduras; a decision that must be reported to its members in the nearest ordinary General Assembly.

Article 7.-

Without prejudice to the actions that must be taken for the recovery of overdue credits and the remediation of the delinquent portfolio, the Public Ministry, in exercise of its powers, shall investigate the administrative situation that led to this capitalization process, in order to determine the existence of liabilities. TRANSITIONAL PROVISIONS

Article 8.-

To reform by suppression Article 4 of the Financial System Law, in the sense of eliminating the second paragraph that establishes that the Workers' Bank is governed by its special law.

Article 9.-

Once the registration of the corporate contract and statutes is completed, Decree No. 131 dated November 8, 1966, which contains the Law of the Workers' Bank, is repealed.

Article 10.-

This Decree shall enter into force as of the day of its publication in the Official Gazette La Gaceta. Given in the city of Tegucigalpa, municipality of the Central District, in the Session Hall of the National Congress, on the twenty-third day of the month of November of two thousand ten. JUAN ORLANDO HERNÁNDEZ ALVARADO PRESIDENT RIGOBERTO CHANG CASTILLO SECRETARY GLADIS AURORA LÓPEZ CALDERÓN SECRETARY To the Executive Power. Therefore: Execute. Tegucigalpa, M.D.C., November 24, 2010. PORFIRIO LOBO SOSA PRESIDENT OF THE REPUBLIC The Secretary of State in the Office of Finance. WILLIAM CHIONG WONG

Notes

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