COUNTRY PROFILE
Total land area:............... 120,254 sq. km.
Official language:............. Spanish
Administrative divisions:.. Fifteen departments, two autonomous
regions.
Legal system:.................. Civil law; Supreme Court may
review administrative acts.
Executive branch: ............ Chief of state and head of government‹president
elected to
a five-year term by universal suffrage.
Legislative branch:........... Unicameral National Assembly (92
seats).
Judicial branch:................ Supreme Court. Judges elected
to a seven-year term by the
National Assembly.
ECONOMIC PROFILE
Currency: Gold córdoba (C$)
GDP: US$2.08 billion (1997)
Real GDP growth: 5.0 (1997p)
GDP (average annual growth rate): 0.2 (1988-1997)
GDP per capita (1990 US$): 479.7 (1997)
Consumer price index (average annual growth rate): 10% (1997)
Nonfinancial public sector fiscal balance (% of current GDP): -3.5
(1997)
Money supply (M1) (% of GDP): 9.1 (1997)
Interest rate (average rate offered by commercial banks on one-month
nominal
deposits): 12.6 (1997p)
Current account balance: -US$0.6376 billion (1997)
Trade balance: -US$0.6812 billion (1997)
Main exports: Coffee, shrimp and lobster, meat, computer equipment,
sugar.
Main imports: Chemicals, petroleum and petroleum products, machinery,
food, road vehicles,
iron and steel, other metals, scientific instruments, non-metallic mineral
manufactures, textiles, clothing.
Nominal exchange rate (C$/US$): 10.0 (1997)
Real effective exchange rate (Index 1990=100): 115.0 (1997)
BANKING SYSTEM
Total number of banks in the
system: 14
Types of banks: 2 state banks, 10 private banks, 2 private financial
companies
Total amount of assets: C$1.6 billion (June 1998)
Total amount of liabilities: C$1.5 billion (June 1998)
Total amount of net worth: C$0.1 billion (June 1998)
BANKING INSTITUTIONS
I. Banking Supervision
1. The primary supervisor
is the Superintendencia de Bancos y de Otras Instituciones
Financieras.
2. The supervisor
is an organ of the state with functional autonomy.
3. The Superintendencia
reports to the National Assembly.
4. On-site examinations
take place once a year. Off-site exams occur monthly.
5. Nicaragua does
not have a classification system for bank supervision.
6. CAMEL is used to
examine banks.
II. Consolidated Supervision
1. Nicaragua does
not perform consolidated supervision.
2. Nicaraguan laws
do not contemplate the opening of domestic banks abroad.
3. Prior consent from
the home country is not required to open an office of a foreign
bank in Nicaragua.
4. When the situation
presents itself, the superintendent will request information
from the foreign banking authority of the country in which a Nicaraguan
bank
has opened an office.
III. Interest Rates
1. Interest
rates on loans are determined by the market.
2. Interest
rates on deposits are determined by the market.
IV. Deposit Insurance
1. Nicaragua
has no deposit insurance.
2. Insurance
limits are not applicable
V. Trade Finance
No information available.
VI. Capital Adequacy
1. The minimum
capital required to open a banking institution is the equivalent in
córdobas of US$2 million.
2. The minimum
capital required to maintain a banking institution in operation is
the equivalent in córdobas of US$2 million.
3. Capital adequacy
is measured using one category, adequate capital, which is 8%
of total assets.
VII. Asset Quality
1. Loan portfolios
are classified as follows:
Debtor
Categories Reserve Reserves as of June 1999
A
0%
0%
B
1%
5%
C
10% 20%
D
50% 70%
E
100% 100%
2. The minimum reserve
requirements are those contained in regulations concerning the
assessment of risk assets.
3. The legal lending
limit is 15% for credit to corporations and individuals and 30%
for conglomerates.
4. Investment portfolios
are not classified according to criteria such as hold-to-maturity
portfolio, available-for-sale portfolio and trade portfolio. Each bank
has its own
policies and authorities.
5. Banking institutions
are authorized to invest in the following investments, which are
considered zero risk: Central Bank securities and bonds, government agency
investments, U.S. government bonds and treasury notes, and investments
and
securities issued by other Central American countries. Other types of investments
should be authorized by the Superintendencia and are considered 100% risk.
6. The valuation of
the investment portfolio affects the profit and loss statement.
VIII. Liabilities
1. Seventeen percent of the bimonthly average of total deposits and other
liabilities
should be on reserve at the Central Bank of Nicaragua.
2. All deposits can be accepted in either local or foreign currency.
3. There are currently no limits on the maximum amount of deposits a banking
entity can accept.
4. There are no limits on the level of concentration of specific types
of deposits.