Legislator voting.
Salvadoran Legislators approved reforms to article 20 of the Law to Facilitate Financial Inclusion that simplifies the requirements when opening bank accounts. The approval took place on June 14th Legislative Plenary Session.
Simplifying the requirements demanded of Salvadorans when opening a bank account will facilitate financial inclusion for all Salvadorans.
According to the Central Reserve Bank (BCR), only 23% of Salvadorans have a savings account, 60% men and 40% women.
The reforms were approved with the vote of 75 of the 84 deputies. These changes will benefit Salvadorans, especially those that work in the informal sector.
The changes will benefit Salvadorans over 18 years old with DUI (Salvadoran Unique Identification Card), minors from 16 years of age, Salvadorans living outside El Salvador, and Foreigners with a passport or Salvadoran residence card.
We want to make the requirements more flexible so that more Salvadorans have access to a savings account. Our goal is for 100% of the population to be banked.” Deputy Dania Gonzalez.
The changes will prevent financial institutions from requiring a minimum to open a bank account. Currently, financial institutions demand an initial deposit between $25 and $50.
According to the Legislative Assembly, anyone opening an account under $1,095, equal to three Salvadoran Monthly minimum wages, can only be required to provide their DUI or passport and name a beneficiary.
Minors from 16 years of age and until 18 only have to provide their minority card to open an account in their name.
Individuals with more than three to six months minimum wages ($2,190) must present their DUI or passport, the names of the beneficiaries, and complete a simplified client profile format.
The individual who opens these accounts will not be required to explain in detail the origin of the savings. However, the simplified requirements do not exempt financial entities from compliance with the Law against Money Laundering.
These modifications to the Law to Facilitate Financial Inclusion will also benefit Salvadorans living abroad; they will be able to open a bank account online with their passport or DUI.
Our Diaspora (Salvadorans living abroad) was also included in this initiative, and they will be able to carry out this type of process, solving those cumbersome processes that denied them access to banking.” Deputy Walter Aleman.
Financial entities will also be required to provide financial education and promote a culture of savings among users.
Financial institutions that fail to comply with this regulation could face a fine of up to 2% of their assets. The penalty will depend on the seriousness of the infraction.
