The Venezuelan government has paid savings guarantees amounting to $343 million to 225,000 account-holders of the seized Banco Federal, representing 69 percent of the total amount to be paid, informed on Tuesday the State Minister for Public Banking, Humberto Ortega Díaz.

Ortega noted that those clients who exceed the established amount to be paid by Venezuela’s Fund of Guarantees and Banking Protection (Fogade), the institution responsible for paying account-holders, have to go the bank’s main office with the corresponding paperwork to request their savings.

The remaining amount will be paid with the liquidation of the bank’s assets, according to the order of precedence established in Article 344 of the General Law of Banks.

Banco Federal was seized by Venezuela’s National Superintendence of Banks and Other Financial Institutions (Sudeban) on June 14 due to financial insolvency caused by irregular management by the bank’s Board of Directors.

On June 25, the Bolivarian Government of Venezuela started the payment process for account-holders who had deposits in the bank. On August 11, Venezuelan authorities announced the bank’s liquidation to cover the total amount of the deposits with a sale of the assets.

At the time of the seizure, authorities determined a passive loss of over $1 billion.

Banco Federal had 560,000 account-holders whose guaranteed deposits were worth over $498 million.

AVN/Press Office – Venezuelan Embassy to the U.S./August 24, 2010