The Government of Mexico will create a service to facilitate the sending of remittances

The Mexican Secretary of Finance, Arturo Herrera, in his office during a telephone conversation. SECRETARIAT OF TREASURY / SECRETARIAT OF TREASURY / EFE

The Government of Mexico plans to announce a new banking product on Monday so that more migrants working abroad can send their remittances electronically through the Banco del Bienestar, the government's own development bank.

In an interview with EL PAÍS, the Secretary of the Treasury, Arturo Herrera, assures that the institution will be promoted to make it the bank with the largest territorial extension in the entire country.

The bet seeks to mitigate the consequences of the reform of the Bank of Mexico Law that will be voted on in Congress.

The approval in the Senate of the proposal led by legislator Ricardo Monreal was criticized by experts and members of the banking sector, including Banco de México itself.

At the center of the controversy is the issue of cash laundering.

Senators argue that migrants seeking to exchange their dollars for pesos in Mexico are forced to do so at a less favorable exchange rate because anti-laundering restrictions create a market that discourages the use of cash.

The solution, they say, is to force the central bank, whose autonomy is necessary for the soundness of the financial system, to capture the dollars in cash that citizens want to exchange for pesos and at a better exchange rate.

Although Secretary Herrera does not directly say that the product is an alternative to stop the controversial initiative in Congress, this would limit, at least on paper, the effects of the new law.

The Treasury's proposal is to give an accelerated boost to the Banco del Bienestar until it has branches throughout the country, especially in rural areas where many of the remittances arrive but not the commercial banks.

"The largest branch network, as of June, will be the Banco del Bienestar", says Herrera in a telephone interview.

"There is a relatively large number of branches that have already been built, they have already been set up, the systems part is being put into them."

"What we believe is that there is a legitimate concern to ensure that migrants, if they bring their remittances in dollars in cash, have an efficient way to exchange them and that it is not at 15 pesos per dollar, for example," says the secretary, referring to an exchange rate below that which can be obtained electronically.

“We believe that there are several alternatives, one is to provide them with banking services in a way that they do it electronically and the other thing we are doing is trying to understand why there are some that are still made in cash, it may be that there are very small communities in where there is no bank or branch ”.

“We believe that a large part of the resources will be able to arrive through the banking system and later, if there is a place where, for some reason, they want to bring them in cash, they will be accepted by the Banco del Bienestar, as they do. commercial banks ”.

The project, however, is in the hands of a bank that has seen its workforce and its activity reduce since the administration of President Andrés Manuel López Obrador began.

According to data from the banking regulator, the National Banking and Securities Commission (CNBV), the Banco del Bienestar has provided fewer and fewer resources since 2018, even though that is the main task of a development bank.

Its workforce, according to data published on the Government portal, has been reduced by about 10% from 2019 to 2020.

Former bank employees assure that, since Diana Álvarez was appointed director in mid-2020, the bank has suffered a "dismantling".

Many accuse that they were liquidated without their benefits guaranteed by law, so today the institution faces lawsuits.

This was confirmed by a source within the same bank, who said that many of the dismissals were made "for lack of loyalty" to the government.

Álvarez, a lawyer with a career in public service, has no experience or education in finance or the banking sector, according to a profile on the president's website lopezobrador.org.mx.

Despite the fact that the construction of the branches and the purchase of the systems and equipment necessary to operate were put in the hands of the Army, the Defense Secretariat will not be the operator of the bank, Herrera says.

"The Army will never operate, that will be done by the Banco del Bienestar", says the secretary.

It is the bank that is hiring the staff and training them in anti-money laundering, since this, like the rest of the banks in the country, already operates with the measures and restrictions.

In Mexico there is a commercial bank that has the upper hand if the deputies vote to reform the Bank of Mexico Law, since due to operations marked as suspicious, it ended its relationship with a correspondent bank in the United States to which it could send excess dollars. in cash from the public. "There is a banking institution to which one of its most important correspondents stopped operating the activities of correspondents, but has other correspondents," confirms Herrera. The Banco del Bienestar, however, would not take excess dollars from private banks to exchange them for pesos. The service will be available only to individuals, that is, not companies, who are clients of Banco del Bienestar.