The Central Bank of Cuba (BCC) has published Resolution No. 163/2023, which updates the minimum initial capital that banking and non-banking entities must have to start operating in the country.
In accordance with the standard published in the Cuban Journal, this measure seeks to adapt to the current economic situation and strengthen the Cuban financial system.
Cuban law stipulates that financial institutions are obliged, to begin their operations, to pay a minimum initial capital in the amount determined for this purpose by the Central Bank of Cuba, and to maintain it during the exercise of the mandate granted.
Under a regulation issued by the Central Bank of Cuba in 1998, a minimum capital of five million pesos was set for banks and two million for other financial entities. If they operate in another currency, they must have equivalent capital in a freely convertible currency.
However, the resolution signed by Prime Minister Joaquín Alonso Vázquez claims that the current economic scenario requires updating the minimum initial capital that financial institutions must pay to start operating.
The new minimum initial capital that financial institutions must pay to start operating in Cuba.
Global banks, corporations and second-tier banks:
- Cuban capital: 120 million Cuban pesos.
- Mixed or foreign capital: US$5 million or its equivalent in freely convertible currencies, at the prevailing exchange rate at the time of payment.
Investment banks:
- Cuban capital: 62 million Cubans.
Non-bank financial institutions with Cuban capital:
- Financial intermediation and shareholders: 8 million COP.
- Trust, transfers, ATMs and debit cards: 1.5 million COP.
Non-banking financial institutions with mixed or foreign capital: 2 million US dollars or its equivalent in freely convertible currency, at the prevailing exchange rate at the time of payment.
Deadline for capital completion:
Entities that do not comply with the new minimum capital have a one-year period to complete it.
according to Resolution 163/2023:
“Banks and non-banking financial institutions, which as a result of the modernization have less capital than the minimum requirement, must complete it within a period of one year.”
Modernizing the minimum capital for financial institutions in Cuba would strengthen the financial system. However, it can also have some negative consequences, such as a decrease in the number of financial institutions and a potential increase in interest rates for customers.
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