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Chavez announces creation of new state bank


Caracas : Venezuelan President Hugo Chavez has announced the creation of a new state bank from the merger of four of the seven small private financial institutions closed this week for irregularities.

Chavez also said he was dismissing long-time ally Jesse Chacon from his post as science and technology minister because his brother is the president of one of the banks affected and had been under arrest since Saturday.

“We’re going to create another large bank,” the leftist president said during his Sunday radio and television programme. It would be called Bicentenario and would be the result of a merger of the four small banks, – Confederado, Bolivar, Central and Real, plus state-run Banfoandes, he added.

The other institutions which were taken over, the Canarias and Pro Vivienda banks, would be liquidated, Chavez said.

Chavez said last Friday that Venezuela’s “large-scale private banking…is solid” and that the situation that led to the closure of the seven banks, which hold around nine percent of deposits in the system, was an “isolated” case.

The Venezuelan Attorney General’s Office said it had asked Interpol to issue a red alert for the arrests of nine executives of several of the banks that were closed.

Prosecutors have issued a total of 27 arrest warrants for personnel of these banks.

Among those already taken into custody is the president of Banco Real, Arne Chacon, brother of Cabinet Minister Jesse Chacon, whose dismissal was announced Monday by the president.

“I think that, yes, he will have to step down from the government, it’s for the best,” Chavez said, though he had words of praise for the departing minister, for whom he expressed his “esteem and respect”, and said he was an official about whom “I have not a single complaint”.