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Superfinanciera fined Bancolombia $2,182 million for a reserve requirement

Superfinanciera fined Bancolombia $2,182 million for a reserve requirement

This Friday, Bancolombia reported that the Financial Superintendence of Colombia applied a sanction of $2,182.2 million for an ordinary reserve requirement defect.

According to the entity, the events occurred between August 10 and August 23, 2022, and August 31 and September 13 of the same year, caused by an operational error, however, they announced that to date is identified and corrected.

But, what is the banking reserve? According to the Banco de la República, it is a proportion (%) that credit institutions must maintain as reserves in their cash registers or in their accounts with the Issuer, for each deposit they receive from the public.

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Additionally, this requirement is fundamental because it guarantees that entities have the necessary liquidity to guarantee their depositors the availability of their money.

“For example, with a reserve requirement of 11%, if you deposit $100 in your savings or checking account, your financial institution must obligatorily save $11 and could grant loans for $89. Now, with the new reserve requirement of 8%, if you deposit $100 in its savings or checking account, the entity will have to save only $8 and could lend $92 to its clients, which means that there would be more resources available in the economy,” explained Banco de la República.

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