The Koriun case reveals flaws in Honduran financial supervision

The recent revelation of the inaction of the National Banking and Insurance Commission (CNBS) in response to allegations of irregularities at the Koriun financial institution has sparked intense public debate in Honduras. The admission by CNBS President Marcio Sierra of the lack of institutional response to formal alerts has sparked outrage among those affected and called into question the effectiveness of financial oversight mechanisms in the country.

The Koriun case, which impacts over 35,000 individuals, underscores the necessity to enhance regulatory oversight and press the responsible authorities to answer for their actions. This occurrence has prompted mobilization among social sectors, civil associations, and banking system representatives, all aiming to investigate the events and avert future recurrences of similar incidents.

Lack of response from institutions and requests from impacted individuals

In a public statement, the chief of the CNBS admitted that the organization received no fewer than two official complaints regarding Koriun, but failed to promptly investigate or mitigate the dangers. This admission triggered a series of responses on social media and public forums, where those impacted criticized the government’s lack of concern and called for transparent explanations. The victims, many of whom lost their savings and properties, blame the CNBS for significant oversight and neglect of institutional responsibilities, highlighting that alerts were consciously disregarded.

The scandal has reignited the debate on the effectiveness of early warning and financial supervision systems in Honduras, as well as on the possibility of political complicity or fears that may have prevented timely intervention. Consumer organizations and analysts have questioned how a structure identified as a pyramid scheme could operate for so long without effective controls, despite the existence of formal complaints.

In reaction, opposition legislators declared their intention to submit a proposal to probe the involvement of the CNBS in the Koriun matter and to call its president for an official session. Constitutional attorneys have cautioned that acknowledging inactivity might amount to a neglect of duty in public office, considering the legal requirement to respond to indications of deceitful financial conduct.

Organizations from civil society have demanded swift involvement by the Public Prosecutor’s Office, the independent review of the CNBS’s operations, and the establishment of a dedicated fund to assist victims using assets seized from those accountable for the fraud. They have also sought help from international bodies to safeguard the rights of the impacted individuals and to stop acts of impunity.

Stance of the banking industry and appeal for precautionary measures

Due to increasing public worries, the Honduran Association of Banking Institutions (AHIBA) along with banks that are legally operating in the country have stated that they have no association with the Koriun financial institution. As per the banking industry, Koriun has not been overseen by the CNBS and does not belong to the official banking network, hence banks did not handle funds or maintain any business ties with this entity.

Koriun appeared on social media as a platform for investments promising high profits, lacking legal support or regulatory systems. It is now being called a pyramid scheme that has unlawfully collected millions of lempiras, impacting tens of thousands of people in Honduras.

The banking sector in Honduras has reaffirmed its dedication to openness, adherence to laws, and safeguarding citizens’ deposits. Additionally, it has urged people to consistently ensure that financial entities are correctly overseen by the CNBS prior to engaging in any financial ventures and to be cautious of alluring promises of fast wealth without substance.

In conclusion, both AHIBA and its member banks have called upon the relevant authorities to conduct a comprehensive investigation into the matter, hold accountable those involved, and initiate prevention campaigns to prevent future fraudulent activities, highlighting the solidity and trustworthiness of the formal banking system in Honduras.