SBS on Caja Raíz: “Refund to savers includes interest generated up to the day of the intervention”

The Superintendency of Banking, Insurance and AFP (SBS) announced this morning the intervention of Caja Rural Raíz after determining that it was in a situation of insolvency. The institution, which started as an Edpyme and became a Rural Bank after its merger with Caja Rural Chavín in 2016, registered a deficit of S/44.3 million. In an interview, Jorge Mogrovejo, deputy superintendent of Banking and Microfinance, provided more details about the return.

– The SBS clarified what the financial situation of Caja Raíz was at the time of the intervention, but also said it found a deficient administration. What did they find at the start of the intervention?

Tomorrow the intervention resolution will be published in the newspaper El Peruano and there they will be able to see in the recitals a series of highly questionable operations that originate the losses that lead to the cause of the intervention. What you are going to see are not losses derived from small business loans, they are loans to large companies.

– According to the regulations, for what acts are those responsible for mismanaging a financial institution punished?

They are varied. For example, failing to comply with the rules that regulate the way of keeping books and accounting records or the formulation of financial statements. Failure to comply with provisions, limitations and provisions defined by the Superintendency.

– Regarding returns, will they reach the interest generated?

The law indicates that the return implies the principal amount and the interest generated up to the day of the intervention. For example, if one took out a term deposit that expired in September, they are owed the interest generated up to August 10. I would also like to note that the fact of FDS coverage does not mean that those who are not covered will lose everything. What is done is that once the entity is liquidated, those not covered by the Fund continue to be paid. For example, the financial institution TFC, which was intervened in 2019, has practically paid all the depositors.

– In how much time?

Of course, it can take time. What you have to do is proceed to the collection of debt, sale of assets.

– Is that configured in this case?

When there is a small percentage not covered, the prospect of almost total collection is not low.

– The intervention of Caja Raíz sends a signal of how the institutions are?

No. To date, it is the only Rural Bank that has a deficit of provisions, level of losses and the type of problems that will be shown in the intervention resolution.

– How many boxes are we talking about?

There are six rural boxes.

– How many have fallen in the intervention process?

The last time a Rural Bank was intervened was in 2015. A box that is intervened can no longer reopen. Either it is liquidated or absorbed by another, as happened with Caja Señor de Luren, which was absorbed by Caja Arequipa.

– How long will the intervention take for Caja Raíz?

The intervention can last from one day to 45 days, extendable. The time it may take basically depends on whether the SBS considers that it is possible to transfer the patrimonial block. But if this does not work, proceed to liquidation. Once there, with the proceeds, the liquidator honors outstanding debts.

– Caja Rural was one of the most aggressive regarding the interest rate for deposits. What should be the recommendation for savers when deciding on an option?

The recommendation is to pay attention to the amount covered by the Deposit Insurance Fund. And if you have a larger amount, pay attention to the financial situation with financial statements that are published in the SBS.

– Commercially no entity offers this information.

No, it is found on the SBS website and on the same website of the entities. It is all I can say.