what to do with cash in Banco de Reservas

philly · #1 02-19-2003, 02:07 AM

I have an account in Banco De Reservas in US and would like to get some advice on what to do with it. I have a couple of options: 1) leave it there
2) pull what I can out and bring it back to US
3) buy land
4) start building our house

I ask the question primarily becuase I have read many posts and headlines about the growing economic crisis in DR and seek some inside insight from you all....all oppinions/advice welcome.

Is this bank going to last the upcoming economic issues? Is the money resonably safe there in US currency?

Thanks,

Porfio_Rubirosa · #2 02-19-2003, 12:19 PM

I've heard that the Banco de Reservas is the safest Dominican bank because it can directly tap into government revenues.

ricktoronto · #3 02-19-2003, 02:33 PM

It is like a retail branch of the Central bank where the pesos are printed and distributed.

Keith R · #4 02-19-2003, 02:59 PM

Quote:

Originally posted by ricktoronto
It is like a retail branch of the Central bank where the pesos are printed and distributed.

HeeHee. Not quite. As I understand it, Banreservas is where (by Law 586) the government must deposit its money and perform its retail transactions. It used to be the National City Bank of NY (nowadays known as Citibank) until Trujillo nationalized it (ahem -- excuse me, the official, politically sanitized version of it now promoted is that the DR "bought" it) in 1941 and changed its name. (Citibank returned to the DR under its present name much later).
Regards,
Keith

ricktoronto · #5 02-19-2003, 03:11 PM

The government. It is not privately or publicly owned or a subsidiary of a bank that is, which was my point.

[BTW my reference to the printing of money was to describe the central bank and not BR. e.g.: Quote: It is like a retail branch of the Central bank (where the pesos are printed and distributed)]

From Global review: The Banco de Reservas has a single shareholder, the Dominican state, but participates in the financial system as any other general bank, offering all the same services. At the same time, it plays an important role in the country's financial policy by stabilizing the general market conditions for all loan and investment operations.

The country's leading financial authorities, the Financial Secretary and the Governor of the Banco Central, sit on the Board of Directors, which also includes a wide representation of businessmen from different productive sectors and geographical regions.

Keith R · #6 02-19-2003, 03:39 PM

Rick,
Chill, dude. I was not taking a shot at you, or anyone else for that matter (it's not my style). I was just trying to clarify, to point out that technically & legally speaking, Banreservas is not a subsidiary of the Central Bank per se. The Dominican state is the sole or majority shareholder in many enterprises, but that does not automatically make one the the sub of another. The DR government does control Banreservas, and they often use it in ways no commercial bank (local or foreign-owned) would allow itself to be used (such as overly favorable loans). People say that Banreservas would be the last bank the DR Government would ever let go under, because they'd be cutting off one of their key access points to the retail banking market. Also, if the DR government must keep its deposits in Banreservas, wouldn't its bankruptcy be tantamount to admitting bankruptcy of the state? I don't know the answer to that one -- perhaps Frederick, our Business forum guru, does.
Best Regards,
Keith

Hillbilly · #7 02-19-2003, 05:35 PM

Keith R: yes that is about right. Technically,m they are bankrupt, since they have a huge portfolio of uncollectable loans outstanding--CEA, CDA, among others...plus a lot of loans to former officials of the government who feel that these are gifts, not loans...
Philly: As to your question. I would get my money out of the bank and into real estate as fast as possible. In the bank it is losing money every day, while a good investment will accrue value....Just find a good piece of property...

HB

philly · #8 02-19-2003, 09:17 PM

thanks people for all your posts....I will probably just let it sit for awhile until we can figure out what we are going to do....I also read somewhere that the DR has a limit to how much currency can be taken out of the country. Would that apply to US currency and or transfers from Banreservas to another bank?

Thanks again and keep enjoying the sun if you have it...