Businessmen and banking representatives declared to be concerned about the draft legislation sent by the Government to the National Assembly, which proposes to fund the increase of the Human Development Bond (BDH for it Spanish acronym) from $35 to $ 50 with banking profits.
Cesar Robalino, president of the Association of Private Banks of Ecuador (ABPE), warned that the Executive’s proposal represents a “quasi-confiscation” of the sector margins. Robalino said that such an increase would mean about $ 342 million of current spending which would have to be financed by permanent income.
“(…) the private banking has nothing to do with any candidate, political party or social movement. It is devoted to serve seven million Ecuadorians. “
Moreover, the Ecuadorian Business Committee (EEC) considers that this would be detrimental to the productive sector, as banks would have to decrease their loans and credits. According to several businessmen, using the banking profits to fund the increase of the bond is risky and affects investment.
“They want to finance 100% of the increase of the bond with banking profits. With this action they are eliminating the constitutional right to make money, this is illegitimate “, said Robalino, after a meeting of the EEC.
The Committee is planning to request an interview with the President in order to propose a technical report which will detail the consequences that could generate that decision.
“They are taking away the incentives to banks. Tomorrow no one will be interested in buying a bank. The Government has no cash flow problems, so it should reconsider the proposal,” said Henry Kronfle, elected president of the Business Committee.