Demutualization of mutual savings banks in the Dominican Republic
This past week, the Dominican Republic´s Monetary Board (“MB”) announced that it would soon publish its draft regulations on the demutualization of mutual savings banks (called “Asociaciones de Ahorros y Préstamos”). Demutualization consists of converting an investor owned, mutual organization into a corporation (joint stock company). The dominican Monetary and Financial Law recognizes three different categories (or banking licenses) for corporations: “bancos múltiples” (a sort of quasi universal bank), “bancos de ahorro y crédito” (savings and loan banks) and “corporaciones de crédito” (credit corporations). The differences between each category are mostly related to minimum capitalization requirements and permissible functions (more capital=better baking license=more authorized functions). Notwithstanding, the underpinning organizational form behind all labels is still the corporation.