A copy of the new banking reform draft was cited by Reuters as saying, "Granting more loans, under more favorable conditions in terms of interest rates, duration and amounts, is a crucial element to efficiently allocating financial resources to boost national economic growth."
The news agency said that the reform book consists 800 pages, and covers financial matters ranging from money laundering to competition.
It is believed that the banking reform proposal will amend approximately 40 laws and regulations, subsequently putting the wide spread impacts on the Mexican financial system including larger lenders to small credit unions.
The country’s finance ministry expects that the proposed measures, backed by revamp in the development bank, will decrease the risk and persuade lenders to loan more at affordable interest rates.
The new proposal also states that the banks can take possession of a loan guarantor’s assets in case of default and market regulators will be empowered to penalize the companies that do not meet the lending requirements laid by the government.
Targeting Mexican conventional banks, the new proposal is most likely to be announced next week.
Mexico, which is the second largest economy in Latin America, is working to ramp up the growth against the stagnant lending by the banks.
