CARACAS, WILLEMSTAD - Venezuela's banking regulator has launched a temporary administrative measure at the private bank Banco Occidental de Descuento (BOD). This took place following the closure of the bank's offshore affiliate in Curacao. A decision made during a meeting of the shareholders of the bank on September 3.

The measure at the country's fifth-largest bank by assets, which has 6 million clients, will last for 120 days and may be extended. It will allow the bank to keep operating, but dividend payments, new investments, and new board appointments will be halted for the time being.

Owner of the bank, Dr. Victor Vargas announced that it was just an administrative measure which is totally normal in the financial system worldwide. “It simply does not impede the bank's normal functioning," said Vargas in a press conference.

The Central Bank of Curacao and Sint Maarten announced on September 5 that it was taking emergency measures against the Banco del Orinoco N.V. due to "deficiencies" at the bank. Vargas added that BOD had appealed that measure.

The assets of Banco del Orinoco N.V. are currently frozen while authorities probe the bank's finances. Curacao's decision had also prompted Panama's banking regulator to start a 30 day verification procedure at Allbank, a BOD affiliate in the Central American country, Panama's banking regulator said in a statement.

The Superintendence of the Banking Sector (SUDEBAN), issued a Last minute circular during the weekend, which clarifies that the BOD, First Bank of the Zuliana Region and Venezuela’s third private bank, is not subject to a banking intervention regime and its owners and shareholders have not been removed from their positions and activities.