SAO PAULO, Feb 18 (Reuters) – Brazil’s central bank on Wednesday ordered the extrajudicial liquidation of the small lender Banco Pleno, according to a statement, after its financial situation deteriorated and it failed to comply with regulatory rules.
Extrajudicial liquidation in Brazil is a process in which the central bank shuts down a financial institution if it is no longer viable, without going through the courts.
Banco Pleno was controlled by Augusto Lima, a former partner of troubled Banco Master, which the regulator also wound down in November.
The central bank approved Lima’s acquisition of Banco Pleno, formerly Banco Voiter, last year, after the banker sold his own stake in Banco Master.
Lima was arrested in November on the same day the central bank shut Banco Master, as federal police began investigating the alleged sale of fraudulent loan portfolios by the bank. Lima was later released and the probe is ongoing.
The central bank on Wednesday said the move was motivated “by the compromised economic and financial situation of the bank.” The regulator also cited a deterioration of the bank’s liquidity position, and breaches of rules governing its activities and failure to comply with norms.
Banco Pleno accounts for 0.04% of total assets and 0.05% of total funding in Brazil’s financial system, according to the regulator.
Banco Pleno has about 160,000 creditors with deposits eligible for guarantee payments totaling 4.9 billion real ($938.19 million), the private guarantee fund FGC said in a separate statement.
($1 = 5.2228 reais)
(Reporting by Marcela Ayres; Editing by Bernadette Baum)
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