But where's our bank gone?

When we moved to Guatemala and needed to open local bank accounts to receive salary payments and pay bills and rent, we opted for one of the big four banks of the country, Bancafe. We were a little shocked, therefore, to read in last Friday’s paper that the operations of Bancafe had been suspended by Guatemala’s banking regulatory authority. Our response was, ‘But surely this sort of thing doesn’t happen any more?'

Afterwards everyone told us they knew the bank was in trouble. I wonder why they didn’t tell us? Though of course we weren’t the only ones caught on the hop – we’re in there with some very large international organizations and major projects as well as around a million ordinary account holders.

I’m not sure whether I believe in premonitions, but it so happens that we withdrew the last of this month’s cash from our main account at the very time the banking regulators were deliberating. But we do wonder what is going to happen with the as-yet-unredeemed rent cheque we sent to the landlord last week.

The media reports tell us that Bancafe will not re-open, but assure us that all local accounts (dollars and quetzals) will be moved to other Guatemalan banks and that our money will be safe. They might be able to tell us where to go to find our accounts by this coming Thursday. I’ve heard of bouncing cheques, but never hand-passing accounts from one bank to the next!

Apparently the whole problem has been caused by the international arm of the bank, based in Barbados, which has a massive debt problem - something in the nature of a black hole. The reasons given by the banking authority seem sound and cautious, intended to preserve depositors’ money, as they should do. But it all seems very sudden, and something does not seem to add up. Apparently the bank was given two months to get its affairs in order, but this decision was made before the time expired. And, going by the stunned and sickened look on the face of the bank’s founder Eduardo Gonzalez in press photos, he had no idea the axe was about to fall.

The interesting thing is that Gonzalez is a candidate in the primaries within the centre-right political party Gana, for next year’s Presidential campaign. Whatever his decision about whether he will continue, his candidature has effectively been killed in the water by this untimely event. I don’t pretend to understand the machinations of Guatemala’s subterranean politics, but the coincidental timing is remarkable. I would have to say, yo tengo mis sospechas (I have my suspicions ).

We’ve never brought into Guatemala more money than we needed for each month’s living expenses. Somehow it seemed the sensible approach, although I think the backs of our minds were more occupied with the vulnerability of the quetzal and the cost of international exchange and transfer than the unlikely event that one of the four largest banks in the country would be shut down. But now we’re looking for a way not to have local bank accounts at all.

The funny is that, most of the time, it is actually possible to withdraw quetzals from foreign accounts, but it is a bit of a circus trying to do it on a regular basis. I recently thought I’d found a bank whose machines I could use not only to get quetzals per se, but to get more than Q1,000 in one hit (=100 euros). It did work one day. The next week I tried again and the machine insisted that any and every amount I entered exceeded my daily withdrawal limit. Another time the same machine told me my card wasn’t recognised. Then the next time it coughed up, so I figured it was just a network glitch after all. But when I tried the same bank at a different branch on a different day, I again ran into the zero withdrawal limit, until it occurred to me to experiment a bit. In the end I did get the money by calling it a credit card account, even though it isn’t, and even though the other machine in the other branch of the same bank wouldn’t give me a cent unless I promised it was a savings account. It seems to be a new form of computerised gaming, which I’ve decided to call Ruleta Guatemalteca.

So if you hear any reports around Guatemala of bank cash dispensers with large frontal dents and cracked glass … it’ll probably be one of those 1.1 million Bancafe desperado clients (and I have the right to remain silent).

Mariposa Pesada