The Issuer’s board is risking it in 2025

The board of directors of the Bank of the Republic He was the person of the year in 2024, according to Portafolio, due to the caution with which he made decisions regarding monetary policy with the interest rate that is today at 9.5%, in an environment of decreasing inflation.

But in 2025 it will have important challenges since it is anticipated that reaching the goal of 3% inflation, despite the fact that in 2024 it ended at 5.2% and will not be an easy task due to several factors.

(You can read: CPI 2024: which was the division with the largest increase during the year?).

One of them is that the Colombian economy is beginning to experience price indexing on various products and services which generated an increase in the minimum wage of 9.54%, a figure that was not in the forecasts.

Thus, in the first months there will be increases that in many cases could even be ’rounded’ by 10%.

In that sense, in the coming months the variation of the inflation index in Colombia could register increases above the level with which it closed last year and even Some analysts have long said that new price increases could occur in the second half of the year due to environmental or international factors..

(More: How inflation in 2024 would affect the cost of living in the country this year).

In addition, there is a key element that must be resolved in the coming days, related to the appointment that the President Gustavo Petro of two new members, of the five full-time members, of the Issuer’s board of directors.

The president has not spared criticism of the decisions that have been made regarding the reduction of rates of the Colombian central bank, as he believes that a greater downward impulse will help the economy grow more, although the first responsibility of the Issuer is control of inflation.

Leonardo Villar, general manager of the Bank of the Republic

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Thus, with the possibility of seeking more affinity with their ideas, by appointing two members, he could, in theory, have four of the seven votes in his favor.

(Continue reading: Rasa Foundation, on the situation of the health system: ‘the Government does not listen to us’).

However, it must be taken into account that the independence of the Bank of the Republic is precisely one of its most important assets and nothing would ensure that those appointed by the president will copy everything.

Full-time members are appointed by the President of the Republic for fixed institutional terms of four years, extendable twice, so their tenure in office is up to twelve years.

Bank of the Republic

THE TIME

The current board of directors is made up of Bibiana Taboadasince February 2021, that is, his (first) period in the entity expires.

Robert Steinerhas been on the board since October 2019 and is characterized by being very technical and critical.
Mauricio Villamizar He has been a member since February 2021.

(Also: Analysis: how will technology influence the labor market in 2025 worldwide?).

For its part, Jaime Jaramillo-Vallejohas been a member of the board of directors since April 2021. Olga Lucía Acosta Navarro was appointed by President Gustavo Petro in December 2022.

And the general manager, Leonardo Villar Gómezwas appointed by the board of directors itself in January 2021 and at the end of 2024 he was re-elected for a period of four years, which began on January 4 and will end in January 2029.

Davivienda takes over the Scotiabank business

The announcement at the beginning of the year of the alliance between Davivienda and Scotiabank Colpatria so that the latter’s business in the country, as well as its operation in Panama and Costa Rica, is assumed by Casita Roja, it will be one of the big moves of 2025.

(Also: The list of works that will become part of the public domain in 2025).

It is estimated that once the corresponding authorizations are given and the technological processes are carried out, In the second half, Davivienda becomes the second largest bank and has the digital wallet with the largest number of users (21 million). At the same time, Scotiabank will remain the owner of 20% of Davivienda’s total operation in Colombia and Central America.

Other businesses, at least 16, as Portafolio has already reported, will take place in the coming months and will be linked to the emergence of banks and other digital-based financial entities such as financial corporations and insurance companies.

Davivienda

Abel Cárdenas / Portfolio

For this, it estimates that investments close to US$600 million will be madeboth from foreign capital and from local investors.

Additionally, it is also expected that with the regulation of open finance and big data systems, with which there is expected to be greater competition and more financial products at lower costs for clients, investments and greater financial inclusion is allowed in the country.

Bre-B, the bet to reduce the use of cash

Starting in September, the system is expected to begin operating. Bre-B immediate paymentsthrough which low-amount payments or transfers will be made in real time, regardless of which financial institution the resources are in or which bank they are sent to.

(You may be interested in: The five most popular digital wallets in Colombia, did you know them?).

The system whose assembly has been carried out by the Bank of the Republic With the collaboration of banks, payment systems, fintech and the digital ecosystem, it will have technical standards and formats that will allow full interoperability to be achieved and will make it possible to send and receive resources between accounts of financial entities, at any time and on any day.

To ensure full interoperability, a digital public infrastructure must be provided through two centralized components: the Centralized Directory (DICE) and the Operational Mechanism for Settlement (MOL).

Bre-B immediate payment system.

Courtesy

The American firm ACI Worldwide provides technological and operational support. There is already evidence of industry connection to the board and the readiness of the settlement mechanism.

The Issuer says that it is desirable for the market to converge to a rate of zero pesos in transfers between people and to continue strengthening its value proposition in payments to businesses, based on competitive acquisition models with elements of added value to commerce.

(You can read: Depreciation and climate, reasons why inflation in Brazil would be above the target).

He said that the Chamber of immediate low value payments that the Issuer will directly manage It is expected to be in operation in October 2025. This camera will be called Drixi and will interoperate with the centralized components and with the private networks, following the rules stipulated for the other cameras in the regulation of immediate payments, and its operation will be monitored by the Financial Superintendency.

The services that the Issuer provides in the immediate payment system (DICE and MOL) would have an operating fee of $6.46 per transaction for the fourth year of operation.

HOLMAN RODRÍGUEZ MARTÍNEZ
Portfolio Journalist