Home Core Business Topics Financial System Structure of Financial System
Structure of Financial System PDF Print E-mail
Tuesday, 17 April 2012 09:52


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1. Central Reserve Bank of El Salvador

Its objective is to promote macroeconomic stability, particularly monetary stability. Low inflation promotes savings, increases productivity and promotes low interest rates. All of this encourages investment creating a healthy cycle, i.e. macroeconomic stability –better opportunities–macroeconomic stability.

It also safeguards financial system stability, establishing prudent measures and regulations to assure its financial solvency and enabling it to offer efficient financial services. This reduces operating costs, fostering savings and making credit easier to obtain, thus promoting financial development and economic growth.

2. Financial System Superintendence (SSF)

Its main function is to enforce all provisions applicable to the Central Bank, other banks, financial institutions, insurance companies, non-banking financial intermediaries, mutual guarantee companies, exchange bureaus, and Official Credit Institutions. It is also in charge of their control.

3. Securities Superintendence

Its main function is to enforce compliance with the provisions applicable to the stock exchange, exchange broker companies, bonded warehouses, specialized companies for the safe custody of securities and valuables, risk classification companies, etc. It is in charge of controlling the above institutions. It also inspects and supervises the issuers who are inscribed in the Public Stock Exchange Registry.

4. Pension Superintendence

It is mainly in charge of enforcing compliance with the provisions applicable to the Retirement Savings System and the Public Pension Fund System, and mainly those applicable to Pension Fund Administration institutions, the INPEP (National Institute for Public Employees Pension), and the Disability, Old-Age and Death Program of the Social Security Institution, being also in charge of their control.

5. Deposit Guarantee Institute

In the event that a member bank is forced to be dissolved and liquidated, it guarantees the public deposits for up to US$6,700 dollars. Likewise, it contributes to the restructuring of member banks, which may have solvency problems, in order to defend the rights of the depositors and those of the institution.

* Pursuant to Article 181 of the Banking Law, the Financial System Superintendence is in charge of controlling this institution.


1. Banks

They are organized as incorporated companies, having a minimum capital of US$11.43 million. They require prior authorization from the Financial System Superintendence in order to begin operations.

2. Stock Exchange Companies

a) Stock Exchange

Corporations aiming to provide its members with the necessary means to efficiently carry out securities transactions and enable them to carry out securities intermediary activities. The country has a Stock Exchange.

b) Exchange broker companies

Corporations whose objective is to act as securities brokers. They can also carry out portfolio administration operations, prior authorization from the Securities Superintendence.

c) Specialized companies for the safe custody of securities and valuables.

These Corporations receive securities in custody from financial brokers and from the public; they also provide amortization-collecting services. Currently there is only one firm providing such services.

3. Welfare Institutions

a) National Institute for Public Employees Pension (INPEP).

An autonomous institution whose aim is to manage and invest its economical resources destined to the payment of benefits to cover Disability, Old Age and Death of public employees.

b) Salvadoran Institute of Social Security (ISSS): Disability, Old Age and Death Program.

c) Armed Forces Institute for Social Prevision, Disability, Old Age and Death (IPSFA).

An autonomous credit institution whose objective is to achieve welfare and social security goals on behalf of the members of the Armed Forces

d) Pension Fund Administration Institutions (AFP’s)).

These are welfare institutions organized as corporations whose sole aim is to administer a pension fund while they administer and award the benefits and entitlements provided by the Pension Fund System Law.

4. Auxiliary Organizations and Bonded Warehouses

Their main function the oversight and preservation of merchandise submitted to their custody, issuing certificates of deposit and warrants over said merchandise.

5. Non Banking Financial Intermediaries

a) Cooperatives:

These entities are organized to render credit-financial services to their partners and to the public. They may be organized as partnerships, or as cooperative associations. Some of them are supervised by the SSF (the ones authorized to collect funds from the general public) and others shall be supervised by the Federation they belong (receiving funds only from their members).

b) Federations.

These are organizations that group into financial cooperatives. Their aim is to render financial, consultancy and technical assistance services to the member cooperatives.

c) Sociedades de Ahorro y Crédito (Credit and Savings Societies, SAC).

These corporations are authorized to collect deposits from the public and to grant credits, these are incorporated with a minimum capital of US $2.9 million. They cannot collect deposits in current accounts; they must comply with the corresponding requirements set forth for such purpose in the Banking Law and in the Non Banking Financial Intermediaries Law.

6. Official Institutions

a) Banco Multisectorial de Inversiones (Multisector Investment Bank, BMI).

A public credit institution created to promote the development of investment projects from the private sector by granting loans under the current market conditions, through the financial institutions of the system.

b) Banco de Fomento Agropecuario (Agriculture Promotion Bank, BFA).

Official credit institution whose aim is to create, foster and maintain financial conveniences and other associated services necessary to contribute to foster agriculture.

c) Fondo de Financiamiento y Garantía para la Pequeña Empresa (Finance and Guarantee Fund for Small Businesses, FIGAPE).

Autonomous institution whose objective is to grant small loans to small business and Industry holders.

d) Fondo Nacional de Vivienda Popular (National Low-Cost Housing Fund FONAVIPO)

Its objective is to allow low-income Salvadoran families to have access to credit to enable them to procure housing under the most favorable conditions. It also fosters activities of social interest.

e) Fondo Social para la Vivienda (Social Housing Fund, FSV).

Its purpose is to render financial services to solve housing problems of the working population.

7. Mutual Guaranty Companies

Corporations whose exclusive purpose is to grant its associated members endorsements, bonds and other guarantees. They are controlled by the Financial System Superintendence.

8. Insurance Companies

These are Corporations who operate insurance, reassurance, bonds and reinsurance services. In the insurance contract (pursuant to the Code of Commerce) the insurance company is bound, by the payment of a premium, to compensate for damages or to pay an amount of money upon verification of the occurrence of an event provided in the contract. In the bond contract, on the other hand, one or more persons are responsible for someone else’s obligation, being committed on behalf of the creditor to comply in full or in part if the main debtor does not comply.

9. Foreign Currency Exchange Bureau

Companies whose usual activity is the purchase and sale of foreign currency in bills, bank drafts, traveler’s checks and other payment instruments issued in foreign currencies, at prices set by offer and supply.

Last Updated on Monday, 04 January 2016 16:03
Banco Central de Reserva de El Salvador
República de El Salvador, C. A
Alameda Juan Pablo II, entre 15 y 17 Av. Norte. Apartado Postal (106), San Salvador, El Salvador.
Tels. (503) 2281-8000; Fax. (503) 2281-8011.    E-mail: