Goodbye to two foreign banks in Mexico, they will close their offices

The National Banking and Securities Commission (CNBV) reported that Canada’s Bank of Montreal and Israel’s Mizrahi Tefahot Bank, Ltd. will no longer have representation in the country.

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December 29, 2020 4 min read

This article was translated from our Spanish edition using AI technologies. Errors may exist due to this process.

This story originally appeared on Alto Nivel

Through the National Banking and Securities Commission (CNBV) , the Ministry of Finance and Public Credit announced the closure of the representative offices in Mexico of the two foreign banks.

The announcement was formalized through the Official Gazette of the Federation (DOF) , where the announcements of the closing of offices of the Canadian bank Bank of Montreal and the Israeli entity Mizrahi Tefahot Bank, Ltd. were published. The revocation of the authorization was also reported. for its establishment and operation by the CNBV.

The CNBV indicated that since 1963 the Treasury authorized the Bank of Montreal to establish its representative office in Mexico. However, the Commission’s governing board ruled in favor of the revocation during a session held on January 30, 2020.

“We refer to your briefs presented on November 14, 2019 and January 14 and 17, 2020, by means of which you notified this Commission of the definitive closure of Bank of Montreal , Montreal, Canada, representation in Mexico and, consequently, requested the revocation of the corresponding authorization, “says the official letter published in the DOF.

The Secretariat also announced the definitive closure of the representative office of Mizrahi Tefahot Bank, Ltd. The third largest bank in Israel received permission to operate in the national territory in 2001. Through official letter number 101-1728, the SHCP authorized its establishment in the country under the name United Mizrahi Bank Ltd. , Tel-Aviv, Israel, Office of Representation in Mexico.

The Israeli entity notified in October 2019 the definitive closure of its representative office in Mexico. In January 2020, the CNBV’s governing board admitted its revocation.

What can the representative offices of foreign banks do in Mexico?

The CNBV regulates and supervises the representative offices of foreign financial entities. These offices can only perform certain functions, such as informing and negotiating credit conditions that they intend to carry out in the national territory.

They can also collect information from their borrowers and investment subjects to operate loans and supervise the execution and development of the operations carried out, in addition to carrying out collection procedures that are related to activities of their credit dynamics.

“Representative offices are prohibited from carrying out in the national market, among others, financial intermediation activities that require authorization from the federal government and acting, directly or through third parties, in operations to raise funds from the public, either by own or third-party account ”, details the CNBV.

While the Bank of Montreal and the Mizrahi Tefahot Bank, Ltd. They say goodbye to Mexico, other international banks retain a presence in national territory. Such is the case of BNP Paribas of France, Bank of America of the United States, Liberbank of Spain and Shinhan Bank of South Korea.

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