Law of Financial Inclusion No. 1735

The Financial Inclusion Law creates a new financial license to allow new players, including non-banks, to enter the low-cost electronic deposits market. The purpose of the law is to establish the supervisory framework under which they will be regulated.  

The newly approved entities will be categorized as ‘Specialized Societies in Deposits and Electronic Payments’ (SSDEP), and will need authorization prior to establishing their operations. To obtain this authorization, they must comply with governance and risk mitigation requirements, such as anti-money laundering (AML) rules.

SSDEPs are only authorized to perform remote cash-in and cash-out operations, allocate customers’ funds in electronic deposit accounts, and the offer select transactional services, such as remittances, transfers, and payments.

SSDEPs are not allowed to offer credit. Because there is no credit risk, these entities are not subject to the full range of prudential requirements that apply to commercial banks. Some rules, however, remain in place to mitigate liquidity risks. All customer funds have to be deposited in commercial banks or the central bank. In addition, a specific ratio between equity and liabilities must be maintained. The law requires that companies have a capital stock of at least USD 3 million before the start of operations.

Document Details

Title (Non-English): 
Ley de Inclusion Financiera No. 1735
Document Type: 
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Doument Author (Entity): 
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Originating Country or Trade Block: 
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Year of Document: 
2014
Date of Document: 
Tuesday, October 21, 2014
Document Authors: 
Congress of Colombia

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