The Dominican banking history is from the twentieth century, because the banks that were created

In the 9th century, they had to close due to a lack of management; the first signs of
banking regulation in the Dominican Republic appears with the emergence of the
National Bank of Santo Domingo, S. A. in the year 1869. In 1909, the State
Dominican promulgated the first General Banking Law, where it is established
specific regulations for Mortgage Banks, Issuers and Repairers
credit institutions emerge with the characteristics of commercial banks, under
the supervision and control of the Ministry of Finance and Commerce,
now called the Ministry of Finance, which had appointed inspectors
two by the Executive Power in each bank to exercise its control; however, in
In 1912, the Royal Bank arrived, which left by mistake in the 1980s.
executives. In 1920, Scotia Bank was established; in 1926, National City arrived.
Bank, which on Friday, October 24, 1941, transforms into the Bank of
Reserves, state property. On 01/06/1945, the Agricultural Bank of the State was established.
that since 1962 works exclusively with the agricultural sector.
On October 23, 1947, the Central Bank was born, marking the transformation of the Sis-
Dominican Financial theme creates the Dominican Monetary Unit, the Bank
Central and the Superintendency of Banks, the latter under Law No. 1530 of 9
October 1947 was the one that laid the foundations for supervision and regulation of
Dominican Financial System. The economist Virgilio Álvarez Sánchez was the
first to hold the position of Superintendent of Banks, a position I occupy
for two years. Initially, the supervisory task that this person performed
the entity was quite simple considering the limited commercial operations
from that era and its main function was the authorization of new offices.
Law No. 1530 that gave rise to the Superintendency of Banks was amended and
replaced by Law No. 708, General Banking Law, on April 14, 1965,
where the application and administration of the regime is placed in charge of this entity
legislation of banks, under the dependency of the Department of Finance,
Today Ministry of Finance. On February 3, 1967, through a decree of power
Executive Regulation No. 934 "Internal Regulation of the Superintendency" was enacted.
Bank Supervision
banking trends and the General Organization of the Superintendency of Banks,
as well as the formal Organizational Structure.

With the creation of Law No. 183-02 on Monetary and Financial Matters, the Super-
Banking Superintendency the legal framework of action it currently has,
granting him the responsibility to supervise, with full autonomy, the institutions-
financial intermediary actions, with the purpose of protecting the funds of the
savers and the rights of users of financial services. Likewise,
with the promulgation of this law, the Superintendent of Banks is incorporated as
ex officio member of the Monetary Board. Due to the dizzying growth experienced
mentioned by the Financial System, both in the institutional aspect and in the
operational, the Superintendence of Banks has found it necessary to adapt
its structure on multiple occasions to assimilate such changes, framing itself
Moreover, in a profound transformation of its regulatory framework and of super-
vision, moving from a compliance model to a supervision model with-
risk-based solidado.
Private banking emerged with Banco Popular on 08/23/1963 and started operations.
banking on 01/02/1964, being in 2015 the largest private bank in the
land of the brave Quisqueyanos, like Alejandro Grullón, founder of the Bank
Popular and President 1963-1986; Pedro Rodríguez, President 1986-1990, and
Manuel Grullón, President since 1990 to the present. Mr. Alejandro is a
Captain General, rank of the King in Spain, because it is the first private bank,
that emerged from the depths of Cibao and continues to be relevant providing services
banking.

Lawyer Dilia Castaños Guzmán de Martínez stated that during the decade
lost in the Dominican Republic, more than 500 financial institutions were registered and there was
a true hemorrhage of new commercial banks between 1982 and 1990.

He recalled that at that time the Commerce Bank began to operate, Bank
National Credit (Bancrédito), Cibao Bank, Mercantile Bank, Dominican Bank
Hispano, Pan American Bank, Antillean Bank, Caribbean Bank, Bank
Latin American, Girod Dominican Bank, BHD Commercial Bank, Bank
Universal, Banco Osaka and the International Bank (BANINTER).
In giving the talk titled "The 80s: A Lost Decade in Latin America, case
"Dominican", in the Dominican Academy of History, the specialist in the area
banking and researcher said that then the number of commercial banks
multiplied by 1.5 times, and something similar happened with the other intermediaries
financial, especially development banks, and that it was wanted to install by
one less in each province.
Adriano Miguel Tejada, Vice President of the Dominican Academy of History,
presented Dr. Dilia Castaños Guzmán de Martínez. Photo: Karina
Valentine/ADH.
He stated that the next step was to adopt the financial innovations of
American financial system and a sustained process was produced for
take local banking operations to the highest level, and that was when it
it popularized the use of credit and debit cards.

Doctor Dilia Castaños Guzmán

He explained that in 1988 it led to the bankruptcy of one of the financial institutions.
greats of the moment, the Monetary Consortium, which made the reality evident,
that they used the deposits of the population for self-loans, to carry out
investments in real estate and any activity that would be more profitable,
to lend and that on a smaller scale the practice was imitated by traditional banking.

Due to the bankruptcy of the Monetary Consortium, fears grew of

risks, due to the increasing number of banking executives without experience and
with very high salaries.
To which were added weaknesses of laws, lack of competition, and resources.
budgetary of the SIB to adapt to the new context,” he added.
He said that what was feared happened, the contagion effect, which caused the first crisis.
banking system of importance over the last four decades. “The collapse of
Monetaria was followed by the bankruptcy of the Financial Consortium Horizontes.
Dominican International Finance, S.A. (INTERDOSA), of Mortgages and
Payables, from Dominican Real Estate (DOBISA) until concluding with the bankruptcy
of hundreds of small and medium financial institutions.

In all cases, the savers lost their money. But things did not
they stopped there, dragging in newly created banks that were characterized by
do not cling to banking orthodoxy, that is, to attract resources from the public and
lend it with a high probability of recovery,” he added.
He recalled that Universal, Panamericano, Antillano, and Dominico banks collapsed.
Hispanic, from the Caribbean, Latin American and Cibao, were affected from 1988 to 1991.
in addition several mortgage and development banks, and hundreds of families
they lost a lifetime of savings.
He said that the rumors generated by the uncertainty threatened to harm
entities of good reputation, clear and transparent management.

Lessons learned
The lessons learned from that banking crisis were that banks had
advanced faster than the Superintendency of Banks, which needed
strengthen to perform the supervisory functions that were demanded by a
a financial system different from the date it was established,” he emphasized.
He added that it was also necessary to take precautions to avoid new ones.
risky situations, and it was thus that, with the advice of the organizations
international cooperation, pressure begins to modernize the
financial system, through a law in accordance with the requirements of the regulations
from Basel.
Although resolutions from the Monetary Board since 1991 applied many
From the philosophical aspects, ten years of discussion were needed to reach a consensus.
the Monetary and Financial Law No. 183 of November 19, 2002. It was one of
the conditions of the loan from the Inter-American Development Bank, used
as institutional support of the Central Bank and the Superintendency of Banks
he explained
BANK FRAUDS IN THE DOMINICAN REPUBLIC
Chronology
In 1933, the first bank closure of the past century occurred when the
National Banking Company closed its doors.
Almost 29 years ago, the Dominican Real Estate Bank was intervened (on June 30th)
of 1988), through the resolution of the Monetary Board, which authorized the SIB to
to manage the consent of the competent judicial authorities to initiate the
liquidation process of that entity.
In the 1990s, there was a festival of bank and financial institution closures,
starting with the intervention and liquidation of the Banco del Cibao; the Chasse
Manhattan Bank was acquired by Bancrédito and the Latin American Bank bought
to the Dominican Bank of the Caribbean.

In 1993, the Universal Bank was intervened and put on holiday. Since that year
the Workers' Bank was intervened and put into liquidation,
International Corporate and Latin American.
In 1997, the Intercontinental Bank (Baninter) acquired Bancomercio.
becoming one of the largest in the country, according to a publication from
America Business Blog.
In the year 2003 with the official revelation that at the Intercontinental Bank
(BANINTER) a fraud of tens of billions had been committed.
pesos. The sum involved in the fraud and the cost of the efforts made by the
authorities to save citizens' savings amounted to RD$55,000
millions, equal to two-thirds of the National Budget for that
moment. This fraud led to the bankruptcy of BANINTER, and the rescue of that
financial entity by the authorities became one of the reasons
fundamentals of the economic crisis that has harmed businesses and the
personal economies of Dominicans.
Hardly had the population recovered from the astonishment and anguish that was awakened by the
BANINTER case, when another major fraud was discovered, committed at the Bank
National Credit (BANCREDITO), which has had a cost exceeding
RD$23,000 million. A third case, the MERCANTIL, was revealed months ago.
afterwards. Although the amount involved is smaller, the case is no less scandalous and
outrageous. It has cost so far more than RD$6,500 million.
The authorities of the Central Bank and the Superintendency of Banks proceeded to
submit these three cases to Justice. As expected, the lawyers of
The parties involved in each case have deployed all the resources at their disposal.
to convince the Public Ministry and the judges, and above all the population and
the public opinion makers, that reason is on their side. The
attempt to take the cases beyond the purely legal issue, to use them
for political propaganda. It was to be expected, not only because the Republic
Dominican Republic was attending an electoral process to elect a new president, if not
because one of the bankers involved in the greatest fraud boasted
hardly many years of his friendships with all the top leaders of the
three biggest parties in the country.
The processes have followed their course among the incidents and the allegations. The
the population has been on the lookout for what may happen. But the danger
impunity is present, because it is no secret to anyone that society
the Dominican Republic carries a tragic tradition when it comes to trials against
people with a lot of money, notoriety, and influence.
Probably a part of the population has fallen victim to the confusion generated
for the propaganda, and while it has not taken the side of those who are accused
of bank frauds, they are likely to have lost faith in Justice
will make the guilty pay with the penalties that the laws on the matter prescribe or
they are simply indifferent to the processes. But it is necessary to maintain the
faith in the country. And for the building of public opinion and the population, it is
it is of vital interest that all the details of how they operated are known
main shareholders and executives of the INTERCONTINENTAL banks,
BANCREDITO and MERCANTIL, and their affiliated companies, both real and
fictitious.
The documents that the navigators will find are a historical legacy for
present and future generations know the whole truth of these events
embarrassing.

BANINTER:
Fraud in Dominican banking has its particular history, but never like in
2003 had laid bare itself and had submitted to the courts of justice,
to those responsible for having evaded official oversight for several years
through sophisticated mechanisms, which included the very capture of the
authorities responsible for enforcing the laws.

Impact of the Baninter financial hole

According to data from the Central Bank of the Dominican Republic, the equity deficit
from the Intercontinental Bank rose to RD$55,800.00 million pesos in the
mid-2003. However, the monetary cost to cover this deficit
it was 35% higher because to address the financial hole of Baninter
needed more than RD$79,400.00 million pesos.

Amounts granted by the Central Bank of the Dominican Republic to address the shortfall
Baninter's financial

7Classified according to the type of disbursement.

Amount in millions
Concept
of RD$ (2003)

Liquidity Facilities 40,661

Payment to Depositors 29,829

Portfolio Acquisitions 8,774

Others 139

Total 79,403

It was precisely this year, with the arrival of a new team at the Government.
from the Central Bank, and with the support of international organizations, it was possible
discover the fraudulent way in which the bank rediscounts are used
Center for private purposes and to destabilize the stability of the currency
national, transferring them to affiliated companies and personal accounts, with
mechanisms as ancient as the maintenance of parallel books, and so
sophisticated, like the use of computer programs that mounted and
They dismantled the operations of the Intercontinental Bank daily.
A bank that appeared in its accounting books with assets of 26 billion.
pesos, actually had 77 billion. The authorities did everything they could
they could to save this institution, including the provision of fresh resources and
the purchase search by other financial institutions. When
made the first incursion into the Baninter books, within the procedure of
Due Diligence, it was found that the fraud was above any
logical estimation.
This motivated a deeper work from the authorities and organizations.
international, and it was possible to detect initially a fraud of around
56 billion pesos, especially through transfers for
private businesses, related companies, and personal expenses of the main ones
executives of Baninter.
The files described here constitute, as a whole, the Case
Baninter. The details of each of the cases reveal a
snake-like behavior, deliberately designed to hide the
violations of the laws. Given the magnitude of the case, the lawyers who have handled
the representation of the monetary and financial authorities of the country, has
dear to present all available documentation, so that in the annals of the
This story stands as one of the most dramatic in consequences.
economic for the country, in consequences for the justice system itself, and in
consequence for future generations, who have seen their development halted
momentarily due to the irresponsible activities of the defendants.
While Baninter, which was the third largest bank in the country, had 'assets
"official" of approximately RD$26 billion, which added to its "bank
"parallel" –RD$55 billion– became the first in the ranking, as its
total operations reached approximately RD$ 81 billion, slightly
superior to the sum of the second and third bank in the country, indicates the 'Report of
panel of international experts: Dominican banking crisis, prepared by the
Central Bank.
But Baninter took other entities with it. "As a consequence of the
news about Baninter and the fraud scheme that was exposed, others
banks have exacerbated their liquidity problems. The withdrawals of deposits made
by the clients combined with the highest requirements of established reserve
the BC caused Bancrédito, a medium-sized entity, to also enter into a
severe liquidity crisis.
Another of the banks that ceased its operations in 2003, as a result of the crisis.
generated by Baninter, was Mercantil. "The Mercantil Bank also suffered a
significant reduction in their deposits due to withdrawals that occurred after
the measures adopted by the authorities (as a result of the Baninter fraud),
requiring increasing financial assistance from the BC.
Although they are scarcely known, due to not having much involvement, beyond
The jobs that are lost in the country have also bankrupted companies.
cooperatives.

BANCREDITO:
The Bancrédito case is one of the most scandalous banking frauds.
unveiled in our modern history. For this reason, just like it has been done
In the Baninter file, the Monetary and Financial Authorities not only...
have denounced responsible, coherent and publicly, but have
complained and constituted as a civil party against those responsible for the same until
now identified.
However, wanting to overlook this serious fraudulent act, the
accused, gentlemen Manuel Arturo Pellerano and Felipe Mendoza, want
publicly sell the idea that said complaint is frivolous, as they
they are just simple victims of power, which under its administration at Bancrédito
no fraud occurred, and this bank did not go bankrupt.
The first argument lacks support, since on the contrary the defendants
they have been undeniably and repeatedly favored by important sectors of
power. In this regard, the cited parties forget that it was the Attorney General
of the National District, who having passed a little more than two months since the
date on which the Monetary and Financial Authorities filed the complaint
in question, it was uncovered with an unusual and unsustainable ruling dismissing the
same, without even having cited or interrogated any of the
representatives of the Central Bank of the Dominican Republic, nor of the
Superintendency of Banks.
But no less inadmissible and lacking legal support is the other argument.
brought by Messrs. Manuel Arturo Pellerano and Felipe Mendoza, that said
the complaint seems reckless to us, since while they were in control and the
During the management of Bancrédito, serious fraudulent events occurred, such as the
that only by way of example are listed below, namely:
Despite the fact that according to the audit report prepared by the auditing firm
external of the previous owners of Bancrédito, KPGM, the assets of the Bank
by December 31, 2002, they were only about five thousand eight hundred
MILLIONS OF PESOS (RD$5,800,000,000.00); for the middle of next year,
in just twelve days, from June 12 to June 24, 2003, these assets skyrocketed,
mysteriously from SIXTEEN THOUSAND EIGHT HUNDRED AND SIXTY-FOUR
SIXTEEN BILLION EIGHT HUNDRED SIXTY-FOUR MILLION PESOS (RD$16,864,000,000.00) to TWENTY-EIGHT THOUSAND

FIVE HUNDRED FORTY Y SIX MILLIONS DE PESOS

(RD$28,546,000,000.00) approximately. The above is endorsed in a credible manner.
documentation that rests in the hands of the investigating judge reveals
that the previous owners of Bancrédito had a nominal accounting record and
false for the authorities, the savers and depositors of the bank and another very
different or hidden from them, what is in the light of sections d) and e) of Art. 80 of the
Law No. 183-03, or Monetary and Financial Law, and articles 147 and 148 of the Code
Penal is a financial crime and forgery of a criminal nature.
Likewise, fraudulently appropriating the funds deposited in their coffers.
by thousands of savers, depositors, and the Central Bank of the Republic itself
Dominican Republic, the main executives of Bancrédito, now processed,
they diverted funds in favor of a group of companies connected to them through
of 'loans' and 'overdraft payments' for an amount exceeding TWENTY THOUSAND
MILLIONS OF PESOS (RD$20,000,000,000.00). For example, to Bancredit
Cayman LTD. was allocated resources amounting to more than FOUR THOUSAND.
FIVE HUNDRED FORTY Y DOS MIL MILLIONS DE PESOS
(RD$4,542,000,000.00); Segna, S.A. for more than ONE THOUSAND SEVEN HUNDRED
MILLIONS OF PESOS (RD$1,700,000,000.00); to Bancrédito Panama, S.A. for
more of UN MIL FOUR HUNDRED MILLIONS WEIGHTS
RD$1,400,000,000.00; to Bancredicard, S.A. for more than ONE THOUSAND ONE HUNDRED
MILLIONS OF PESOS (RD$1,100,000,000.00); to GFN International Investment
Corp. for more than SEVEN HUNDRED MILLION PESOS (RD$700,000,000.00); to
San Isidro Free Zone, S.A. for more than ONE HUNDRED NINETY MILLION OF
PESOS (RD$190,000,000.00); to Tricom, S.A., for more than TWENTY MILLION OF
WEIGHTS RD$20,000,000. y SIXTY MILLIONS DE DOLLARS
(US$60,000,000.00); to Editorial AA, S.A., for more than SIXTY-SIX
MILLIONS OF PESOS (RD$66,000,000.00), etc. These facts are framed in
the offenses, also criminal, of fraud and breach of trust
aggravated, provided for in Articles 405 and 408 of the Penal Code.

MERCANTILE BANK:
Fraud at the Mercantile Bank
During the years 2002 and 2003 and before the acquisition of the majority of its
actions by Republic Bank Limited, Trinidad and Tobago (on the 8th of
October 2003), Banco Mercantil S.A. was experiencing serious problems with
liquidity issues, which were resolved with facilities and resources in advances and
discounts from the Central Bank of the Dominican Republic.
Those advances and rediscounts amounted to a total of about SIX THOUSAND.
FIVE HUNDRED MILLION PESOS (RD$6,500,000,000.00), which were
awarded, among other reasons, for the contribution that such assistance represents
economic stability of the country's banking and financial system.
However, a significant portion of those resources was used by the
former top executives and former managers for their personal benefit and to generate
additional facilities, obtained fraudulently, to those previously received by
them and many of their associates.
According to the forensic audit conducted by the firm Duarte and Associates,
S.A. and concluded on March 24, 2004, Banco Mercantil was managed by
a core of companies linked to each other through their families that in turn
they belonged to the bank's board of directors and were related
with its previous chief executive, who was the same as the chief executive officer,
Andrés Alejandro Aybar Báez. With the consent of the former president of the Council of
Directors, Eduardo Jacinto Alejandro de Castro Sánchez, who through his
group of companies benefited extraordinarily through active rates
and privileged and very distant from those of the market, among other facilities
irregular and fraudulent, around 12 "companies" were created with the
purpose of bypassing the supervision of monetary and financial authorities and
execute fraudulent operations off the books, through mechanisms
various, such as:
1) To consider as existing fictitious companies or better yet, companies without a record of
birth to legal life or legal personality, which only functioned as
accounts to carry out fraudulent diversion of funds to favor
to its former executives and directors.
2) Establish formal companies with undeniable ties to the bank and its
affiliated companies, as all members of the Board of Directors of the
they were the same as those of Banco Mercantil, S.A., they shared the operations of the asset
and the bank's liabilities, as well as the facilities, personnel, telephone network and
emblems and distinguishing signs of the bank.

3) Establish an offshore company, incorporated in Panama, similar to those that

they described in the previous number shared all their assets and liabilities with the
Banco Mercantil, S.A., as well as the personnel, facilities, etc., carrying out their
operations primarily in United States dollars.
As a consequence, the lawyers of the Central Bank and the Superintendency of
Banks, on behalf of the Monetary and Financial Authority, presented a
complaint with civil party constitution against six former executives and directors
from Banco Mercantil, whom they accuse of having illegally disposed of 6,500
millions of pesos.
The complaint, presented by lawyers Ramón Pina Acevedo, Artagnán Pérez
Méndez, Carlos Salcedo, Jorge Luis Polanco and José Lorenzo Fermín, accuses the
former executives of Banco Mercantil for the commission of falsehood crimes in
public writing, falsification of commercial and banking documents, use of
false documents, qualified fraud, qualified breach of trust, and alteration and
data and document manipulation.
The documentation presented by the representatives of the state's interests
prove that the falsification and irregular manipulation of documents was done with
the intention to divert the oversight and investigation by the authorities
monetary and financial and to prepare and approve financial statements
Adulterated or false financial statements.
The irregularities committed sought to conceal fraudulent operations in the
Mercantile Bank, crime provided for and punished by Law 183-02 of the 21st
November 2002, which regulates the monetary and financial operations of the country.

The individuals accused by the authorities are Mr. Andrés Alejandro Aybar Báez,
who served as president from April 1, 1989, to the 4th of
August 2003, and the former executives Evelyn Altagracia Pérez Montandón, who was
Vice President of Administration and Finance; Eduardo Jacinto Alejandro de Castro
Sánchez, who was president of the Board of Directors. He also appears as
accused Ramón Aref Henríquez Risk, who worked as
Vice President of Operations and Technology.
The other accused are José Manuel Mateo Contreras, vice president of
Audit and Security; and Rafael Maximiliano Moya Hernández, vice president of
Financial Control.
In addition to the violations of the Monetary and Financial Law, the former executives
Bankers are accused of violating the Penal Code in its articles 147, 148, 405.
(modified by Law No. 5224 of September 29, 1959) and Article 408
(amended by Law No. 461 of May 17, 1941). The complaint argues that,
Using illegal actions, the former executives of Mercantil diverted 6,500.
millions of pesos.
The former executives of Mercantil established a process in the aforementioned institution.
banking through which funds were withdrawn outside the Bank's books, with the
purpose of obtaining in favor of himself and other former executives of the institution, in a manner
fraudulent, a series of benefits and additional personal conveniences to which
they had the right and those who were listed in the books and accounts that were presented
to the authorities responsible for overseeing the activity and operations of
national financial system.
Through actual creation, in few cases, and fictional in almost all, the ex
main executives and directors of Banco Mercantil, S.A. generated a series
of "companies" that issued checks with signatures of non-existent people,
fictitious beneficiaries and endorsers and nonexistent and irregular endorsements, all of which
with the deliberate and fraudulent purpose of:
Divert or produce fraudulent deviations of resources from Banco Mercantil, S.A.
to favor its highest former executives and ex-executives, through payrolls
out of book and other benefits, such as special bonuses, purchase of
luxury vehicles, among others;
bypass bank supervision and the scope of control by the authorities
monetary and financial; to evade the regulations and rules set by the
monetary and financial authority, specifically without limitation to the
related to the legal framework, making operations in that regard more
profitable; evade taxes; favor with "loans" and credits, in their large
majority, without any backing or guarantee and without return, to its former directors and
main former executives.
In their investigations, the Central Bank and the Superintendency of Banks
they found that the instructions regarding the operation of said accounts were
they are found in the aforementioned Memorandum, dated October 21
1997 and has the signatures of the former president of Banco Mercantil, S.A.
Andrés Alejandro Aybar Baéz and three vice presidents of the same, Juan R. Oller,
Evelyn Altagracia Pérez Montandón and Juan Reyes M.
The Memorandum formally and expressly orders the seconds.
vice presidents to carry out operations under fictitious names, with the
express warning that under no circumstances should they be delivered
written information to the clients.
On October 21, 1997, the then-executive of Mercantil, Evelyn Altagracia
Pérez Montandón requested authorization from the Executive Committee of the Bank to
various accounts of Servivalores S.A, under the respective responsibility of
Maribel Alvarez, Rafael Maximiliano Moya Hernández and Mirtha Salazar.
These accounts were opened to be 'affected' by checks, so that
the people who signed were names of fictional characters.
According to the cited Memorandum, Rafael de Moya was responsible for a
it has the fictitious name of Angel D. Camacho; Maribel Alvarez was driving
another with the false name of Cinthia Estepan; Mirtha Salazar was in charge of another
it is under the false or fictional name of Ivelisse Nin.
The internal instructions of Banco Mercantil stipulated that transactions in dollars
were managed through the Valmer account, and that the profits produced
they were transferred to the Prinsa Comercial or Roi Consulting accounts.
With these benefits, Prinsa Comercial or Roi Consulting could acquire portfolios.
from the bank, those that became unproductive assets, since at the end of each
years were used to sanitize the bank's finances and create fictitious benefits or the
what is the same nonexistent benefits, that were used to justify the
payment of large sums of money for exaggerated salaries, double
payrolls, in pesos and in dollars, bonuses, luxury vehicles, and a varied range of
benefits in favor of the main former executives of the bank.
The numerous referred accounts were fraudulently inflated with
customer certificate deposits of the Bank. Only the servinvest account was managed.
operations in the year 2003 amounting to the sum of THREE THOUSAND MILLION OF
PESOS (RD$3,000,000,000.00) and the same account managed values in the year 2001
which total THREE THOUSAND ONE HUNDRED TWENTY-NINE MILLION PESOS
RD$3,129,000,000.00
At the same time, funds were withdrawn from the 'Prinsa Comercial' account.
observing the protocol that is specified below:

1st. Issuing checks in the name of non-existent people.

2nd. Through checks signed by high-ranking former executives of the Bank with others
names. During the investigations, the former executives testified before a notary.
they signed the checks and accounts with fictitious names, that the endorsements
were carried out in the same way and that the amounts collected came to satisfy the
created needs to favor outside of books the main ex
executives and directors of the Bank.
3rd. Endorsing the checks simultaneously, in the name of fictitious beneficiaries,
with fictitious documents in cases where it was noted, not having
found in the records of the Central Electoral Board none of the numbers
of identity and electoral ID numbers indicated on the back of the checks in the name of
the supposed beneficiaries, in cases where they were indicated.

Fraud in transactions and dollar exchange

In the procedure manual for the payment of pesos for the exchange of dollars
branches or agencies, it was established that "the checks received for payment of
operations must be sent in favor of a third party. These are
they were diverted to the Foreign Exchange Market or deposited as a check directly to the
Servivalores account (the company that then operated the Mercantil group), prior to
conversation with the Foreign Exchange Market. The checks had to be endorsed without
the name or account number of Servivalores, and stamped by the cashier as
paid in cash.
In one of the final paragraphs of the dollar operations procedure,
ordered that for operations in dollars made 'outside the system',
it will establish a minimum of US$10,000.00 for both the purchase and for the
sale," and that "transactions below this amount will be processed through
the International Division (Window)
However, it was ordered to maintain 'the provision of not delivering any type of
physical evidence to customers who engage in this type of transactions." Likewise,
it is ordered that the checks in dollars that are purchased from the clients of
Mercantil Bank should be 'issued in favor of Mercantil Transactions or to
name of the same client and endorsed," and "checks in favor of will not be accepted.
Mercantile Bank
Ghost accounts and companies
Other evidence of fraud presented by the attorneys of the Authority
Monetary and Financial is that the former executives of Mercantil created companies and
accounts to produce fraudulent diversions of resources, through forgery
of checks and other tricks.
Among the 'companies' created for these purposes (which never fulfilled the
legal requirements for incorporation) are Servivalores S.A., Adminvest, and SAT, S.A.
Likewise, the accounts Valmer, Prinsa Comercial, or Roi Consulting, Advisors and
Consultants, Micro G Consulting and Alco Solutions, all without any legal support
neither of the established rules in the national financial system.

PERAVIA BANK
The event occurred in November 2014, but it was nothing new in
Dominican Republic. In fact, in 2003 the bankruptcy of several companies
The same sector caused an economic crisis in the country.
The word bankruptcy and its consequences loomed once again, after 11 years,
about a Dominican financial entity and its savers. Banco Peravia, whose
main shareholders are of Venezuelan origin, was intervened on the 21st of
November.
Two days later, the Superintendence of Banks (SIB) announced that it had been
authorized by the Monetary Board to dissolve Banco Peravia.
The alleged fraud that the banking entity was committing with the money of its
savers were known by the SIB. This was revealed by an employee of the company.
in an interrogation with prosecutor Yeni Berenice Reynoso. The assistant of
the president of the Bank said that Peravia was sending RD$200,000 to an employee of the
SIB.
After more than two years have passed, the president is still at large.
from the Bank, José Luis Santoro.

According to a report by Dinero, at the time of being intervened

the assets of the Peravia Savings and Credit Bank, available as of June 2016,
amounted to RD$2,076.5 million, equivalent to only 0.2% of the total assets of
consolidated financial system at that date.
In May 2015, the SIB had disbursed money to 7,003 depositors.
from the dissolved bank, leaving only 248 savers pending.
 Chronology
Of the banking system
Dominican Republic

1869
In this year, Báez's government was overshadowed.
I grant permission to establish a bank,
The first banking institution that also with the ability to emit, but
it did not start to initialize when the occurred the
it was established in the Dominican Republic
was the overthrow of Báez being
the authorization has been revoked, by means of
National Bank of Santo Domingo
created in view of a concession decree, by the government that succeeded it.
thanks to President Buenaventura
Báez, in July 1869, in favor of the firm 1874
North American Prince & Hollesier President Ignacio María González
New York. That concession contemplated extended a concession for the firm
the creation of an issuing bank, American Dominican Company will open
discount, change, deposit and mortgages. a bank of issuance and discount with
Its main distribution consists of the capacity to issue banknotes,
capacity that was granted to emit but this presidential disposition was
national bills with the obligation to canceled posieriormenie, without it arriving at
convert them, to the sight, into coins of to materialize the opening of said bank.

1875
gold or silver minted.
It began operations on January 1st
1870 but it closed four months later, In July of this year, the Legislative Chamber
in May 1870, due to the precarious I have the right to operate a bank.
economic situation of the time and to the discount, change and deposit with the
banking culture failure within the designation of National Bank
population. Santo Domingo, stretching that the

1872 Dominican Essiado would figure as

actionism. It is the first initiative for the
The Bay Company was created incursion of the State in the banking area.
Samaná. But that right was not materialized.
several years later.
1876 1917
The Advance Bank is created and Starting from February 5, The National
Collection. City Bank opens its doors to the public, to
Upon the commencement of the government headed by through its subsidiary, the International
Ulises Francisco Espaillai was organized the Bank Corporation.
Public Credit Board, I would like
functions of deposit bank and
issue, with the ability to put in
circulation banknotes. Said Junia 1918
was canceled by the government of The Territorial and Agricultural Bank of San
Buenaveniura Báez upon occupying the Juan from Puerto Rico is authorized to
presidency for the last time. operate.

1881 1920
The Bank of Santo Domingo is created, the Operations began on July 1st
I had a very fleeting permanence. Bank of Nova Scotia, as an institution

1889 private banking of foreign capital.

With a concession, for a period of 1926

560 years, of President Ulises Heureaux ElNacional City Bank, which through its
to the CrediiMobilier society of France, subsidiary in the country, the International
the new National Bank is established Bank Corporation there wassick
Santo Domingo, which carried out several managing the funds of the Esiado, remained
emissions and operated towards the year 1914.
starting from January 1, definitely

1909 established in the Dominican Republic.

President Ramón Cáceres promulgates the 1928

first Law about Institutions In this year, the first bank is established.
Banking, local investments. The Company
Law No. 4911, where it is established National Bank was the first
specific regulations for banks national capital entity that received
Hypothecaries, Issuers, and Repairers. public deposits and carried out
Under the protection of this law, they were authorized.
credit operations, but due to the
to operate all banks, national and Trujillo regime, it was that bank
foreigners, towards 1947. of their operations.

1912 1937
The first bank is established in the country. An ascending event
foreigner; The Royal Bank of Canada. served as a precursor to the Reform
Also the Jarvis National Bank Monetary and Banking of 1947), it
authorized to operate this year. established Law 1259, dated 21 of
February 1937, during which it Reserves of the Dominican Republic
created the new metallic currency as a repository of fiscal funds.
Dominican Republic, which withdrew the With this step, an opening was made to a
existing metallic coins, IANIO national credit system, since
nationals as foreigners, with since its origin, this institution has been
exception of the national species of government financial and fiscal agency
medieval. Average in the mentioned Law Dominican, at the time it takes place.
five denominations were established banking operations with the senior
metallic following the pairón private.
North American, and you will hear provisions, The Reserve Bank was created
among them, the continuation in circulation by means of Law 586 of October 24
of the dollar bills of the States 1941.

1945
United.

1939 Through Law No. 908 of June 1st

Although originally the Law 1259, this year, the Agricultural Bank was created and
it contemplated the issuance of the Peso Mortgage of the Republic
Silver, of equal value to the gold dollar of the Dominican, but I have been called
United States of America, June with the Bank of Agricultural and Industrial Credit
I hear coins that were poetry in the Dominican Republic and currently
circulation, it was not until the year 1939 called Agricultural Bank of the
the first minting of was produced Dominican Republic, which came to
Peso de Plaia, when an order was placed to become the second institution
issue of 15,000 pieces. bank created in the country and the first
Law 1259 established a series of experience in the field of institutions
rules that governed the circulation of the specialized for promote the
new coins from the beach of the economic development, since it was
denominations of 50, 25, and 10 cents; established as a development bank
5 nickel cents and 1 cent public for agriculture and industry.
copper (which was popularly called
like "little palm".
The mintings of the years 1937 and 1939
1946
Anies of the creation of the Central Bank
were carried out by the Royal House of the there is a prohibition in the country for
Currency of Canada, according to what emit banknotes, foriano was
stated in the contract dated 15 of necessary to carry out a reform
September 1937, between the Esiado constitutional prior to adapting the
Dominican and The Royal Bank of nation to the changes that would occur the
Canada. adoption of a monetary system

1941 own.
Through Law No. 1261, of the 9 of
The Dominican government acquires the October 1946, enacted by the
National City Bank, born from this Executive Power on that same date, is
way, on October 24, the Bank of called a Review Assembly of the
Constitution that modified the articles Ulises Heureaux, and where it operated
94 and 95, of Title XV. Customs Receivership of the Government of

1947
the United States of America
currently "House of Academies".
On January 10, 1947, it was proclaimed Through the referred Law, it was established.
a new constitutional law that that the Central Bank is the institution that
I revoked the prohibition that weighed on regulates the national monetary system and the
Concerning the Dominican Esiado of Emitr banking and public credit, with the
paper money. faculty to issue bills and coins
The situation is remedied and being the in Dominican elitism and regulate its
government in the disguise of a great circulation. From these reforms
public trust, due to having our sovereignty is consecrated
the external debt settlement monetary and financial, and with the creation
and for this reason the Dominican currency to the the Central Bank is putting into circulation
against the US dollar, the the first issue of bills
Dominican state decides to create the Bank Dominicans.
Central of the Dominican Republic,
by means of Law 1529, of October 9
from 1947, inspired, in addition, by a
post-war global movement (II
GM) that promoted recovery
financial the development y the
institutional forialecimienio of the Part of the first issuance of Dominican bills
(1947).
countries, through the creation of their
central banks, either measure. Esie year me too born the
In reality, the legal framework Superintendency of Banks of the
formed by Law 4911 and its Dominican Republic, in virtue of the
modifications, was amended on the 9th of referred General Law of Banks No. 1530,
October is under the jurisdiction of 4 laws: the with what establishes the mechanisms
Monetary Law No. 1528, through which for the supervision and regulation of
the Dominican Gold Peso was created, the Law Financing system of the Dominican Republic.

1949
Organic Law of the Central Bank No. 1529, the
General Banking Law No. 1530, and the Law
from Breton Woods No.1531, which regulates the It is founded with national capital the Bank
litigation and representation of the Bank of Credit and Savings.
Central oven a the agreements
money subscribed and ratified. Esia
opening legislation, with a solid basis,
1962
In this year, two are established in the country.
the current monetary and banking system
from the country. institutions private of capital
The Central Bank started its operations on the 23rd. foreigner, The First National City
Bank, founded on May 3rd, and The
of October of this year, being its
first headquarters the building located in the Chase Manhattan Bank, founded on the 8th
Mercedes Street, former residence of of May.
 1965
By means of Law No. 5894 of May 12
In 1962, the National Bank was created.
of Housing (BNV), and with Law 5909
Law 1530 that had given rise to the
on May 19 of this year, was created the Superintendence of Banks is replaced
Industrial Development Corporation by the General Banking Law No. 708
both, financial intermediaries not of April 14, 1965, where it is placed
monetary. The Savings Associations in charge of this institution the application and
We press for housing, we obtain administration of the legal regime of the
its legal basis by virtue of Law No. 5897 banks, under the dependency of the
from May 14, 1962, remaining under Secretary of the Treasury.
the supervision of the National Bank of
Housing.
Similarly, the functioning of the Bank On the same date (April 14), the
Central is regulated by its Junia
new Moneiaria creates the Investment Fund
Organic Law No. 6142, dated 29 of for Economic Development (FIDE), which
December 1962, which repealed and will channel its funding through
replaced Law 1529, of October 9, from commercial banks and promotion
1947, the median in which it was created of the country.

1966
institution. This Law regulates all the
activities related to the Central Bank, and
was given by the Esiado Council that On June 30, the Law was enacted.
led by Licenciado Rafael F. Bonnelly, No. 292 on Financial Companies
which is also composed of the Companies that promote Development
Dr. Nicolás Pichardo, as First Economic the which onesthey were
Vice Presidency, Dr. Donald J. Reid Cabral, calling banks
as Second Vice President and the Development.
Mr. Monsignor Eliseo Pérez Sánchez,
Don Luis Amiama Tió, General Antonio
ImberiBarrera and Dr. José Fernández
1971
Mortgage Banks operate at
Caminero, as members of the same.
protection of Law No. 171 of June 7
1963 of this year, created with the purpose of
promote and encourage the industry of the
The Institute of Development and Credit
construction.
Cooperative (IDECOOP) is created
by Law No. 31 of October 25
from 1963.
1972
On July 6, the Junia Moneiaria creates the
1964 Department for Development of the
Tourist Infrastructure (INFRATUR). The
The Dominican Popular Bank begins its
we are grateful for this fund
operations on January 2 of this year, will be channeled through the
having been founded on August 23 authorized financial intermediaries
from last year. of the country. On October 27, the
Workers' Bank, institution starting its operations on the 26th of
official with mixed capital. October 1981.

1973 1982
On September 15, the Bank is founded. The Universal Bank was founded on the 16th of
from Santo Domingo. November 1st December and opened its doors to the public
the Bank of Credit and Savings (founded on June 13 of the following year.
in 1949) it became the Condal Bank The Financial Companies of Enterprises
Dominican. that promote Economic Development,
they changed their corporate name to that of Banks
of Development through Resolution of the

1974 Junia Moneiaria of December 16.

On May 23, the bank is founded.

Metropolitan on September 19 is
1983
The Girod Bank of the Dominican Republic started its
founded the Bank of Boston operations on May 19, but on the 4th
Dominican. the following October, it started to operate under

1977 the name of Regional Bank

Dominican.
On February 17, the Condal Bank
Dominican started to operate under the 1984
name of Banco de Santander On December 3, the Bank of Bosion
Dominican. Dominican (founded in 1974) began to

1979 operate under the name of Bank

Dominican of Progress.
The Association of Commercial Banks of
the 1985
Dominican Republic, Inc. was established The Dominican Fiduciary Bank,
on January 15 of this year, being its founded on October 20, 1983, began
the first president Mr. Alejandro its operations on January 22
Grullón. The Commerce Bank year, and on May 13, 1986, it started to
Dominicans founded on August 11 operate under the name of Bank
It began its operations on March 10. Managerial & Fiduciary.
of the following year. Likewise, the Dominican Bank -

1980 Hispano opened its doors on June 20,

Cibao Bank began its operations on
July 22, Mercantile Bank opened its
On January 24 of this year began its
operations in Santiago, D.R., the Office published to the public on September 18,
Regional of the Central Bank. On the 28th of Banco BHD started its operations as
November is founded the Bank commercial bank on October 18, and the
National Credit (Bancrédito) Antillian Bank started operations on the 11th.
of November of this year.
1986
On September 22, the Junia Moneiaria
said the Resolution whose device
On January 27, the Saniander Bank ... the banks authorized to
Dominican (in operation since 1977) offer multiple banking services
they will be able to capture resources in dollars (US$)
started operating under the name
of and in any foreign currency
Spanish Bank. September 5 begins convertible, previous
the Dominican Bank operations approved by the Junia Moneiaria,
from the Caribbean, the Intercontinental Bank through savings and term deposits,
(Baninter) opens its doors to the public on median hews denominated in
November 10 and the Bank dollars in the name of individuals or
Panamerican will start operations on the 15th Legal entities, domestic or foreign,
of December of this year. residents in the country or abroad.

1987 1995
The Dominican Foreign Bank initiates On April 20, the Global Bank
its operations on February 2. converted into a multi-service bank,
but it starts its operations with the
1991 bank name Finademel 1st of
March of the following year. For its part, the
On November 19, the Antllano Bank, Osaka Bank started its operations on the 5th
founded in 1985, was facilitated to from July as a service bank
operate under the name of Bank multiple.
Corporate.

1992 1997
On January 7, the Global Bank was
The Dominican Bank of the Caribbean, founded
facilitated to operate again with
in 1986, it began to operate under the
that denomination.
denomination of Bank
Latin American, January 1st.
On April 2, the Junia Moneiaria adopted the
1999
Resolution for entities The Santa Cruz Bank is authorized to
financial institutions can offer "services operate as a multifunctional service bank
multiple bank accounts, complying with on January 14, and begins operations as
a series of requirements, among them, on the 1st of November. On the 1st of July the
to merge a commercial bank, a bank Santiago Commercial Bank is founded
of development, a mortgage bank and two as a multipurpose service bank, and
or other financial entities, equally operations begin on January 7 of the year
nature that the previous ones, including following.
savings and loan associations.
2001
1994
On November 29, the BDI Bank is The López de Haro Bank turned into
founded as a service bank multiple services bank on the 27th of
multiple. July.

2002 2009
The new Monetary and Financial Law, No. The Multiple Bank of the Americas,
183 –02, gives to the Central Bank and to the Bancamérica was founded on the 13th of
Superintendency of Banks the framework agosio and the Multiple Bank Promérica
legal action that has in the December 17.

2010
current events Likewise, with the
promulgation from Asia law the
Superintendency of Banks is incorporated ElBanesco Multiple Bank
as an ex officio member of the Junia authorized to operate on December 9,
Moneiaria. starting its operations in the month of
On April 4, the bank is founded.
April of the following year.
Professional as a service bank
multiple, and on October 25 the Bank
VIMENCA begins its operations as
multiple services bank.

2003
The Mercantl Bank had merged
by absorption with the Global Bank in year
previously and was authorized to operate with it.
name of Republic Bank on the 6th of
October of this year. On November 13,
the National Credit Bank receives the
authorization to change name
for which it begins to operate under the
denomination of Multiple Bank León.

2004
On August 23, the Commercial Bank
Santago receives the authorization to
change the name of the Bank
Multiple Caribbean International. On the 29th of
December, the Multiple Bank is authorized
Lion the merger by absorption of the Bank
Professional.

2006