Capital Requirements for a Banking License in Mexico

Capital Requirements for a Banking License in Mexico

01/06/2018 - 2:01 PM
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mexico banking license

When applying for a new banking license, you must have a certain amount of capital. This article is on the capital requirements to apply for a banking license in Mexico. Note that this is the amount of cash you need to have to apply for the license. To operate the bank, you must maintain an 8.5% reserve and a 2.5% reserve in Mexico.

The amount of capital required for a banking license varies greatly from country to country. The lowest capital amount for a respected jurisdiction is the US territory of Puerto Rico. An international banking license in Puerto Rico required $550,000 in capital. $250,000 in paid-in capital and $300.000 in a CD held in a local bank.

In the Caribbean, most jurisdictions require $1 million to $5 million in capital. This is one of the reasons Puerto Rico issued 24 licenses last year and Caribbean financial centers issued 1 or 2 depending on the country.

For more information, you can read my 300 page Offshore Bank License Guide on Amazon Kindle.

Without any more adieu, here are the capital requirements for a banking license in Mexico.

A. A required minimum capital of $27.5 million USD for banks that carry out the following activities:

  • Take deposits
  • Take loans
  • Issue debt
  • Issue subordinated debt
  • Make deposits in foreign financial institutions
  • Grant loans and debt purchase transactions
  • Act as guarantor
  • Issue third party letters of credit
  • Carry out transactions involving securities
  • Issue convertible debt
  • Carry out commercial transactions
  • Trade gold, silver and foreign currency
  • Offer security deposit boxes
  • Issue letters of credit
  • Act as trustee
  • Offer escrow accounts
  • Act as agent for bondholders
  • Act as payment agent for security issuers
  • Offer bookkeeping services
  • Act as estate trustee
  • Act as agent in a bankruptcy procedure
  • Offer appraisals
  • Purchase and sale of real estate for the bank´s use
  • Leasing transactions
  • Derivatives transactions
  • Factoring transactions
  • Offer payment mechanisms

B. A required minimum capital of $16.5 million USD for banks that carry out the following activities:

  • Take deposits
  • Take loans
  • Issue debt
  • Issue subordinated debt
  • Make deposits in foreign financial institutions
  • Grant loans and debt purchase transactions
  • Act as guarantor
  • Issue third party letters of credit
  • Carry out commercial transactions
  • Purchase and sale of real estate for the bank´s use
  • Leasing transactions
  • Derivatives transactions

C. A required minimum capital of $11 million USD for banks in the following categories:

I. Banks that carry out transactions only with Institutional Investors (as defined below), Qualified Investors (as defined below) or legal entities:

  • Take deposits
  • Take loans
  • Issue subordinated debt
  • Offer escrow accounts

II. Banks that carry out the following activities:

  • Make deposits in foreign financial institutions
  • Carry out transactions involving securities
  • Issue convertible debt
  • Carry out commercial transactions
  • Trade gold, silver and foreign currency
  • Act as trustee
  • Act as agent for bondholders
  • Act as payment agent for security issuers
  • Offer bookkeeping services
  • Act as estate trustee
  • Act as agent in a bankruptcy procedure
  • Offer appraisals
  • Purchase and sale of real estate for the bank´s use
  • Offer payment mechanisms for the bank´s use

III. Banks that carry out any of the following transactions with authorized payment mechanisms:

1. Transactions involving:

  • Deposits
  • Loans
  • Deposits in foreign financial institutions
  • Grant loans and debt purchase transactions with other financial institutions
  • Transactions involving government or bank bonds
  • Transactions with foreign currency:
  • Commercial transactions
  • Trade gold, silver and foreign currency.

D. A required minimum capital of $27.5 million USD for banks that carry out a mix of the transactions listed above that does not fit in any of the aforementioned categories.

Definitions

Institutional Investor: Insurance companies, investment funds or pension funds.

Qualified Investor: Any person with annual investments in securities of $458,000 USD or with an annual income of $152,000 USD.

Conclusion

I hope you’ve found this article helpful. For more information on setting up an international bank, please contact me at info@premieroffshore.com or call us at (619) 550-2743.

You can also read my 300-page book on the topic on Amazon Kindle. Click here to go to Amazon’s site.

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