The monetary unit of Costa Rica is the colon (pl. colones). At the
time I am writing this, the colon is valued at about 510 colones to the
dollar. To see today's valuation, click here.
Travel Tip! When traveling in Costa Rica, shop at stores that
have price tags in colones. Yes, this IS a bit less convenient,
but my experience has been that restaurants, stores, anywhere, that mark
prices in dollars have much higher pricing as they are catering to tourists.
in Costa Rica fall into two categories: National (State) Banks and
The differences are very
important. National Banks have some security as deposits are
insured, somewhat like the Federal Deposit Insurance Corporation (FDIC)
in the USA. How well this would work if a national bank went under
remains to be seen.
banking in Costa Rica Private and public banks
Offshore banking in Costa Rica is not necessarily the kind associated
with tax havens and illicit financial schemes. In fact, the Costa Rican
authorities cooperate with international agencies in preventing money
laundering and reporting possible drug related transactions. That said,
Costa Rica's banks must also follow the local laws regarding banking
privacy. Offshore bank accounts in Costa Rica offer you privacy and
asset protection. Below is information about the state owned banks,
private banks and Costa Rica's banking system.
bank accounts: Overview of Costa Rica's Banks
Costa Rica’s financial sector includes the Central Bank, 3 state-owned
commercial banks, 19 private commercial banks (including one jointly
owned state bank), 1 workers' bank, 1 state-owned mortgage bank and 4
mutual house-building companies, 15 private finance companies and 27
savings and loans cooperatives. In addition, there are 30 investment and
retirement funds or trusts run by both state and private commercial
banks and the state insurance company.
Costa Rica: How safe is your money? Regulation
Central Bank of Costa Rica makes banking policy in Costa Rica. The
SUGEF (the General Supervisory Agency of Finance) enforces
compliance with Central Bank policies. The legal reserve requirement on
sight deposits is 15 percent. Total assets may not exceed 11 times a
bank's equity, and the legal lending limit is 20 percent of total
capital per customer.
There is no deposit
insurance on private banks, but the Costa Rican government backs the
state owned banks. Banco Anglo Costarricense was closed by the Central
Bank's examiners office in 1995 after incurring US$ 200 million in
losses due to bad loans and dubious investments in Venezuelan bonds that
subsequently disappeared. Criminal proceedings were successful against
members of the bank's board and management, many of whom are serving
prison sentences. Not one depositor lost money in this scandal.
How safe are the private banks?
banks are relatively new to Costa Rica, since only the state-owned banks
could offer checking and passbook savings accounts to the public until
the banking law was changed in 1995. This law also granted private banks
access to the Central Bank discount window and emergency loan
facilities. It also requires private banks to fulfill one of two
requirements: (1) opening four branches in rural areas and depositing
the equivalent of ten percent of demand and short-term time deposits (30
days or less) in a state-owned bank; or (2) depositing the equivalent of
17 percent of demand and short-term time deposits (30 days or less) in a
Offshore banking from Costa Rica
Many Costa Rican banks have subsidiary or affiliated banks registered
offshore. These offshore entities are not permitted to capture deposits
or lend money within Costa Rica, though they cater to Costa Rican
clients. Recent reforms stipulate that any SUGEF-regulated holding
company or financial group owning 25 percent or more of the equity of an
offshore entity must include the offshore assets on its balance sheet.
However, SUGEF does not have regulatory authority over the operations or
individual accounts of the offshore entities.
banking Costa Rica: The State Banks
There are 3
state owned banks: Banco Nacional de Costa Rica, Banco de Costa Rica,
BanCredito (formerly Banco Credito Agricola de Cartago). BICSA, is a
strange animal, as it is a private commercial bank jointly owned by the
three state commercial banks and is chartered in the Bahamas. It has
branches in Panama and Miami and a representative office in Costa Rica.
Banco de Costa Rica is the most profitable and possibly best-run state
commercial bank. Banco Nacional is the largest state commercial bank in
both assets and number of location, although Banco de Costa Rica has
nationwide coverage also. Banco Credito Agricola de Cartage (now known
as BanCredito) is the smallest state bank. Recently Banco Bacioanl and Banco de Costa Rica announced a plan whereby clients of either bank can use the resources of the other. I have not had a chance to test this yet.
These banks offer you the advantages of being safer for your money,
since the Costa Rican government backs them. They also have better
coverage; practically any town in Costa Rica has a Banco Nacional and/or
a Banco de Costa Rica too. They have a wide range of services. The
disadvantages are mostly the long lines that occur in busy locations and
on peak days (Monday morning, Friday afternoon, 1, 15, & 30 of each
month, etc.) Although they may have an English speaker on the staff in
the larger branches, smaller branches are not as likely to.
The private commercial banks are
relatively small. The largest in assets are HSBC, BAC San
José, and ScotiaBank, Citii.
BAC San José offers a good mix of
fast service, numerous locations (including several mini-branches in
supermarkets) but they have SERIOUS issues dealing with foreigners! Read this. They probably sport the best
looking and most efficient banks in Costa Rica. They are a part of
Grupo San José, which owns Credomatic, one of the largest issuers of
credit cards in Costa Rica. Nice web site or not, they clearly have issues with foreignors... so deal with them at your risk.
banks offer you several advantages over the state banks, shorter lines,
faster service, more English speaking staff and more agility in bringing
new products and services into the market. The greatest disadvantage is
the lack of deposit insurance. You will have to look closely at the
corporation and its behavior when you use a private bank. That said, the
government regulations do offer a measure of protection and your funds
are safe under normal circumstances with any of the larger private
Internet Banking in Costa Rica
Banks in Costa Rica have started offering Internet banking over the last
several years, now it is widely available. Most of the state banks offer
services online and many private banks do as well. The common services
are: account balances, up-to-the-minute account statements, transfers
between your accounts in the same bank, transfers to other people’s
accounts within the same bank, interbank transfers, requests for new checks and savings
passbooks, and payment of utilities and other services from your
Many companies have accounts that you can deposit into at one of the
state banks to pay for services that you use, this includes the utility
companies, cable operators, security services and even some private
schools. A good option is to open an account at a private bank that
offers transfers over the internet to an account in the state banks.
BAC San José offers this service, so you can do your normal banking
there and take advantage of the faster service and English speaking
tellers. When you want to pay bills you transfer the necessary amount
over your account online and then pay the bills at one of the state
banks. I mention BAC only because they offer a 0% fee for next day interbank transfer and
transfers between accounts within the bank are free.
Offshore banking Costa Rica: Monetary Policy
Costa Rican colon is freely convertible into foreign currency and
contracts may be negotiated in any currency. The Central Bank
establishes exchange rates through auctions and a well-publicized policy
of daily mini-devaluations. The Central Bank may authorize
SUGEF-regulated institutions to set their own exchange rates under
certain conditions. There is no divergence between Central Bank exchange
rates and those prevailing in the market. The Central Bank records
inflows from exports but places no requirements on where those proceeds
must be deposited. Dividends and transfers may be remitted freely.
The Central Bank is authorized in emergency situations, at its
discretion, to introduce and regulate the use of short-term measures to
alleviate economic imbalances or liquidity crises. Such measures include
imposing surcharges on imports, limiting credit growth of financial
entities, increasing the minimum legal reserve requirement (up to a
ceiling of 25 percent), fixing the maximum intermediation rate (spread
between lending and deposit rates), centralizing currency transactions
in the Central Bank, and obligating the sale of currency derived from
exports to authorized entities.
Bank must, however, comply with limits on these extraordinary measures,
which can only be imposed for one year or less, and which cannot be
applied in a discriminatory manner among financial institutions or among
sectors within the portfolio of each institution. The sum of the
surcharge duties and other revenue generated by the extraordinary
measures are to be used by the Central Bank to amortize the monetary
of Financial Markets (SUGEVAL) was created in 1998 to supervise and
regulate the Costa Rican stock and bond markets, relieving SUGEF of this
Bank policies are stringent
and just opening a new savings or checking account is a lot of fooling
around. (see below).
Banking in Costa Rica,
though theoretically private (secret), is not. Costa Rica
cooperates with most if not all Latin American banks and with the
Federal Reserve in the USA. Clearly this has to do more with money
laundering and fraud, but just the same, do not feel your bank records
are kept confidential to foreign governments.
Checking and savings accounts can
be opened, but there are restrictions. As these vary by bank, I
will not include them, but take my word, it is not a 10 minute process
as it is in other countries. Many banks restrict checking accounts
especially. In all cases you will need, at the minimum, a passport
or cedula (Costa Rican ID card), 2 or more local reference letters, a
letter from your US bank if you're moving here, a cedula juridica
(corporate ID) ID, a personaría (guarantee of
your authority signed by a Notary (NOT just an attorney) and maybe more.
Many corporate deposits most be for a minimum amount. As there are
a tom of banks here and each have different, and changing rules, I will
let you do the investigation.
Cards and ATMs
Credit Cards are widely accepted in
Costa Rica at most upscale stores, hotels, and for most travel services.
Credit cards always assure you will receive the best exchange rate.
Be very careful, however, as credit card number theft is not unusual.
When signing, cross out a block of 4-8 numbers on your receipt.
Mkae sure you are given you copy of the receipt, and check the
(preferably on-line) charges made while you are here.
Also, credit card transactions may NOT be confidential.
Use of credit cards issued in a jurisdiction that does not have banking
secrecy can easily be traced, as a record is kept of each transaction.
Recently the Internal Revenue Service in the USA was successful in
forcing MasterCard and American Express to turn over all transactions
for 1998 and 1999 for cards issued in Antigua, the Bahamas and the
Visa was forced to turn over transaction records
for a period of three years for cards issued in Anguilla, Antigua,
Aruba, Bahamas, Belize, Bermuda, British Virgin Islands, Cayman Islands,
Cook Islands, Cyprus, Dominica, Gibraltar, Guernsey, Sark, Alderney,
Hong Kong, Isle of Man, Jersey, Liechtenstein, Luxembourg, Malta, Nauru,
Netherlands Antilles, Panama, Samoa, St. Kitts, Nevis, St. Lucia, St.
Vincent, Singapore, Switzerland, Turks & Caicos and Vanuatu.
was possible as processing is done in the US. Visa and MasterCard keep
only card numbers, expiry date, credit limits and transaction records.
American Express, on the other hand, keeps all client information in the
US. A settlement agreement between American Express and the government
of the US allows the tax agency to collect information such as passport
and driver’s license numbers of clients, in addition to transaction
information from American Express.
are all over the place in San Jose. Use them to withdraw cash in colones
which can be very important if you're shopping in small shops. It
is better to negotiate with cash (efectivo). Why be careful?
Because you may pay healthy charge to use them. Most a charge a fair
rate for the exchange, but some do not tell you how much is the charge,
and you will not know exactly how much until you see your statement. I
have seen charges as high as $5 for a withdrawal of $100. They probably
got this idea from your local US banker!
Credomatic is an issuer of credit
cards in Costa Rica and is also the processor. They are also owned by BAC. While providing
good service for terminal transactions, the concept of on-line
processing for web sites has just recently arrived. Currently, BAC San Jose and Banco Nacional are the only ones doing this and early results from users are not overly enthusiastic.